NBCUniversal, with its recently launched Hispanics at NBCU initiative, is among the media companies embracing this concept. The Comcast-controlled media giant has a dedicated sales and marketing group pitching clients on the opportunity to reach up to 93% of U.S. Hispanics across 42 brands and their online extensions, be it broadcast, cable, Spanish, English or even Spanglish. “The key here is cultural relevance,” according to Telemundo chief operating officer Jacqueline Hernandez, the executive charged with leading the Hispanics at NBCU initiative.

AD INVESTMENT: NUMBERS GAME
Selling ads like “bread out of the oven” might be on everybody’s mind, but Hispanic ad agencies want it to make it top of mind. A recent survey by the Association of Hispanic Advertising Agencies claims marketers who spend heavily on Hispanic media are seeing their revenue grow faster than those who don’t. According to the study, those advertisers who spend 14.2% (the percentage of Hispanic adults) or more of their advertising budgets to target Hispanics have seen their top line revenue grow in the past five years.

“The biggest surprise [of this study] was the correlation we found between high investment in Hispanic media and top line revenue growth,” said Carlos Santiago, president of Santiago Solutions Group, which conducted the study for AHAA.

The study, which did not break down figures by media channel, found that 57% of the top 500 advertisers spent less than 1% of their budgets on Hispanic advertising in 2010, a group AHAA refers to as “in denial.”

The results aren’t free of controversy because, for some, allocating budget is not about picking the “right percentage” or a number that is consistent with the population number. “When you look at Coca-Cola versus, say, BMW you have to apply your brand development index, your consumption patterns, who is your consumer, etc.,” Maney said. “To pick a percentage and go with it is an easy answer to a complicated question.”

Still, the AHAA study claims a select group of companies that spends more than 14.2% of budgets on Hispanic media — which it calls “best-in-class” — have all reported revenue growth after investing consistently against the segment.

“But this has to be consistent; you have to invest more than 14% for at least five years for these results to show,” Santiago, whose group continues to pore over the results and plans to monitor the companies’ performances in the near future, said.

The media measured by the AHAA study comes from Nielsen, which means it takes into account budgets spend on what Nielsen defines as “Hispanic media” (be it cable, broadcast and print). It does not take into account spend on English-language networks that have large Hispanic audiences, like Fox or NBC.

The AHAA analysis found that there is indeed a strong, positive relationship between the percentage of overall ad spend allocation to Hispanic media and a company’s revenue growth. For Best-In-Class companies, which are defined as U.S. companies with a Hispanic allocation of marketing dollars of more than 14.2 percent, the percent of ad spend allocated to Hispanic markets is a very important determinant of a company’s overall revenue growth rate. Consistent ad allocations greater than 14.2 percent explain about half of the best-in-class companies’ revenue growth rate. The AHAA study found with a confidence level of 99 percent that a Best-In-Class company allocating one quarter of its ad spend to Hispanic media over five years, would generate annual revenue growth of 6.7 percent.

Among the best-in-class group, companies with a strong correlation between allocation and revenue growth include: AFC Enterprises (Popeyes® Chicken, Church’s Chicken, Cinnabon®), Allstate, AutoZone, Colgate-Palmolive, Collective Brands (Payless Shoesource), DirecTV, Domino’s Pizza, Echostar Communications, Heineken, JC Penney, Rent-A-Center, SAB Miller, State Farm and Vivendi.

Coming on the heels of the recession, Hispanic media spend by the Top 500 advertisers stood only $163 million below its peak in 2007 showing a strong recovery. However, unlike the general market which saw budgets slashed during the 2008 recession, the Hispanic advertising industry has remained constant at five to six percent of total advertising budgets, from 2006 to 2010. Showing a steep turnaround in 2010, the Top 500 reversed the previous two year trend returning over $500 million to Hispanic media, intensifying their ad spend by 14 percent over 2009 levels.

Further underscoring steps toward recovery, the data by category in the AHAA study found:

• At $707 million, Packaged Goods advertisers, including Colgate, General Mills and Mars, are targeting Hispanic consumers, increasing $140 million in ad spend over 2009 and increasing their share of allocation to Hispanics by 1.6 points to 6 percent.

• The converging Telecom & Subscription TV categories, including Metro PCS, Verizon and AT&T, follow closely with $502 million or 9 percent and $349 million or 13 percent Hispanic ad spend and allocation respectively, investing $850 million combined in 2010 and adding $415 million to Hispanic media over 2009.

• Hispanic ad spend in the Auto Insurance category increased by $97 million over 2009 to 12.5 percent allocation while Non-Hispanic spend decreased by $73 million over the same period.

• With a remarkable jump in Hispanic allocation from 0.5 percent to 9.8 percent, Fitness-Sports companies, including Bally’s (Harbinger Capital), became a reemerging category in the Latino community. • From 2006 to 2010, the expenditures by Financial Services- Tax Preparation & Other category has grown by 9.6 percent to a 24 percent allocation of overall spend to Hispanic in 2010. • During the same period, Beer advertisers, including Grupo Modelo, SAB Miller, and Anheuser InBev, have remained loyal to the Hispanic community as they allocated 15 percent or about $150 million to the Hispanic segment. • The Financial Services categories have tripled their focus on Hispanic media since 2009 reaching $215 million in 2010. • Similarly, all Insurance categories have experienced increases.

“Companies now understand that the Hispanic market is not going to simply assimilate and go away, which means that a targeted approach will deliver long-term benefits,” said Roberto Orci, AHAA president and CEO of Acento Advertising. “This research underscores that company’s can’t just pop in- and-out of the Hispanic market as a fad and see benefits – real bottom-line benefits come from consistent integrated approaches. Companies must get on the train or risk being left behind and becoming irrelevant.”

AHAA has divided Hispanic advertisers into five categories: • Best in Class, defined by their allocation of more than 14.2 percent of overall ad budgets to Hispanic media; • Leaders, companies which allocate between 6.4 and 14.2 percent; • Followers, which allocate between 3.6 and 6.4 percent; • Laggards, defined by their Hispanic allocations of 1.0 to 3.6 percent; and • Denial, defined by their allocation of less than one percent.

Best in Class:

• Three out of five Hispanic Best-In-Class categories, Subscription TV, Auto Insurance & Financial Services –Tax Preparation, catapulted a total spend of $400 million. • The Beer category maintained its Best-In-Class standing and edged 1.2 share points in allocation to 15 percent. • Direct Consumer Marketing was the only Best-In-Class category that decreased its spending, reducing spend by 33 percent over its pre-recession level of $118 million in 2006.

Leaders:

• The Automotive categories in total, manufacturers and retailers combined, have shown an aggregate decrease of approximately $259 million since 2006. In contrast, all other 50 categories in aggregate have shown an upturn of $280 million or 8 percent in the same period.

• Among Hispanic allocation Leaders, the Telecom category grew the most, nearly $170 million or 51 percent since 2006.

• The Restaurants-QSR category also showed a significant increase of 30 percent or $70 million in incremental investment to arrive at $301 million in 2010.

• The Home Improvement & Builders category rebounded from the recession dip increasing 6 percent over its 2006 base of $91 million.

• Among 2010 Leader categories, only Government & Lottery and Retail Mass Merchandisers-Department Stores experienced decreases in overall spending.

Followers:

• Four categories among Followers increased their dollar spend since 2006, led by Packaged Goods especially Food manufacturers within it, which boosted their investments in Hispanic consumers by 44 percent compared to only 16 percent up among Non-Hispanic traditional media.

• Both the Automotive Manufacturer and Media & Entertainment categories experienced decreases in excess of $150 million each.

• Among the Followers, only four categories experienced decreases in Hispanic allocation from 2006 to 2010, with the sharpest decline coming from the Automotive Industry, auto manufacturers and auto retailers combined, with a $259 million decrease in Hispanic ad spend.

Laggards:

• Amongst the Laggards, the Pharmaceutical and Automotive Dealers-Assn categories experienced decreases in excess of $50 million each.

• The Financial Services category has increased its focus on the Hispanic segment with both the subcategories of Investment Firms and Banks-Mortgages showing healthy recovery.

Denial:

• Among the 13 Denial categories, all but three categories, Diet-Supplement-Vitamins, Insurance-Life, and Luxury Brand, experienced decreases in Hispanic allocation.

• The Private Investment category took the biggest loss among Denial with an approximate decline of $86 million.

Methodology:

Ad spending data was collected from The Nielsen Company. The study was developed and executed by the Santiago Solutions Group, a growth strategy consultancy with methodological review by Dr. Cristina Garcia, professor of statistics at USC from 2008 to 2011. Santiago Solutions Group analyzed all 35,000 U.S. advertisers and their allocation trends to Hispanic media for five years between 2006 and 2010. The Top 500 Advertisers were grouped into five levels of Hispanic allocation and each company was paired to the available published revenue data for the five year period. Various regression analyses were applied to identify any correlation between the percentage of advertising allocation dedicated to Hispanic and the company’s compounded annual revenue growth rates.

About AHAA

Founded in 1996 and headquartered in McLean, VA, the Association of Hispanic Advertising Agencies (AHAA) is the national organization of Hispanic-owned and-managed firms united to promote the growth and strength of the Hispanic marketing and advertising industry to the private and public sectors. AHAA is raising awareness of the value of the Hispanic market’s many opportunities while enhancing the professionalism of the industry. AHAA agencies lead the industry with collective capitalized billings exceeding $5 billion – more than 90 percent of the entire U.S. Hispanic advertising industry. Only AHAA agencies have the blend of cultural understanding, market knowledge, proven experience and professional resources that make them uniquely qualified to communicate with Hispanic consumers. These capabilities and skills offer the potential for Hispanic market success that’s available nowhere else.

Reported on AHAA Press Releases
Reported on  TD Waterhouse.ca

By Fred Dreier, Staff Writer, Sport Business Daily.com

“We want this study to educate America on what we know to be true through our own experiences and to move key stakeholders in this country away from the anecdotal stories about the impact of immigration policy on the Latino community to poll results that clearly illustrate how Latinos view the key, pivotal issues in the immigration debate,” stated Lillian Rodriguez-Lopez, President of the Hispanic Federation.

The research conducted by LatinoMetrics(sm) details how SB 1070 and anti-immigrant rhetoric has provoked change in the opinions and behaviors of the Latino community. Among other findings, the study found that four months before critical Congressional midterm elections, immigration reform has joined the economy as the issue on the top of Latinos’ minds and that large majorities of Latinos of all parties will support politicians who favor immigration reform.

“This new poll demonstrates a tremendous shift in the importance that immigration has become for a wide cross section of the Latino population of the United States,” said League of United Latin American Citizens (LULAC) National Executive Director Brent Wilkes. “The fact that immigration reform is now a higher priority for Latinos than the economy and education demonstrates that Latinos have taken offense to the way immigrants have been demonized by politicians and political interest groups and are prepared to vote accordingly.”

“It is rare to find a group as diverse and nuanced as the US Latino community to be as united and galvanized by an issue as the immigration policy debate has achieved,” said Carlos Garcia and Carlos Santiago, co-presidents of LatinoMetrics. “This national and projectable poll shows Hispanics across the US, regardless of country of origin, party affiliation, language used at home or income, to be united with common cause and very concerned about a rising tide of racism. The community is overwhelmingly opposed to Arizona’s SB1070, and they are supportive of candidates who will work hard for the passage of an Immigration Reform bill with a path to citizenship in 2010.”

SB 1070 has also had social and economic impacts in the Latino community. Survey results measure a mixture of fear and anger among Latinos, with individuals opting to change their lifestyles, shopping behaviors, transportation, and community participation as they adapt to an environment that is increasingly hostile to them. According to the survey, one in five Latinos would be less likely to report major crimes, such as a brutal assault, to police if a law similar to SB 1070 were enacted in their state.

Reported on LATimes.com
Reported by New Mexico Business Weekly
Reported in Spanish on LaOpinion.com
Reported on New York Community Media Alliance
Reported on HispanicCMO.com