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Latino Surge, Marketers Continue To Under-Spend In Hispanic Media
Thursday,
Apr 22, 2004
by Larry Dobrow
Marketers are parceling out more of their ad
dollars to Hispanic publications and television stations, with
percentage growth since 2000 quadrupling the pace of the general
market. Despite this growth, a new study suggests that most companies
are under-allocating resources to this market, with many ignoring
Hispanic media entirely.
“Ad Budget Alignment: Maximizing Impact
in the Hispanic Market,” conducted by the Association of
Hispanic Advertising Agencies in conjunction with multicultural
specialist Santiago Solutions Group and TNS Market Development/CNR,
found that 5.1 percent of national corporate ad budgets are now
devoted to Hispanic print and television media. The AHAA, however,
believes this figure should be closer to 9 percent, given the
size (38 million consumers) and spending power ($630 billion annually)
of the market.
“The investment has not been commensurate
with the opportunity,” said AHAA President Aida Levitan
during a Wednesday conference call. “Progress has been made
and we’re very encouraged by that… [but] there’s
still not as much [spending] as we’d like to see.”
The study compared expenditures in Hispanic
media with general market media in five areas: network TV, national
cable TV, spot TV (19 markets), consumer magazines, and newspapers
(nine markets); radio was not evaluated. The Hispanic media allocations
of 671 U.S. advertisers were examined.
According to the report, around 20 percent
of product categories are devoting what the AHAA deems to be the
“correct” amount (ascertained by Hispanic consumption
behavior) in Hispanic TV outlets and publications. Leading the
way were consumer electronics retailers and manufacturers, food
and drug retailers, and telecoms. Lagging behind were pharma companies,
apparel manufacturers, and financial services firms.
Levitan singled out the track record of pharma
companies as particularly disturbing, noting that these companies
allocated a mere 0.8 percent of their spending to Hispanic media.
She attributed this to a “lack of information about the
Hispanic market and its potential” as well as “myths”
about Hispanic consumers, such as that many of them receive money
for these products from the government.
Santiago Solutions Group President and Chief
Executive Officer Carlos Santiago, on the other hand, commended
retail-level and direct marketing advertisers, who have shifted
7.3 percent of their national ad spending to Hispanic media. He
said it wasn’t difficult to understand why retailers have
eagerly targeted Hispanic consumers with their ads: “Retailers
are a lot closer to the cash registers. They’re seeing customers
coming into the store and hearing the phone ringing.” At
the same time, he criticized financial services companies for
“not recognizing the wealth of Hispanics.”
The AHAA also released its list of the top
250 U.S. advertisers, a project designed to identify the companies
that are dedicating the highest percentage of their ad budgets
to Hispanic media. Of the companies on the list, 61 out of 250
aren’t spending a cent in Hispanic publications or TV stations
(“that’s a pretty shocking reality,” Levitan
said), and 49 are allocating less than 1 percent of their dollars
to those venues. Companies singled out for spending a comparatively
high percentage of their budgets in Hispanic media include PepsiCo,
Sears, Roebuck and Co., Wal-Mart, and McDonald’s; the U.S.
Government and organizations like the AARP and American Legacy
Foundation also earned high marks.
Levitan said her highest hope for the study
is that it will “get the attention” of corporate America’s
chief executive and chief marketing officers. “If they want
to grow their brands--in fact, if they want to preserve their
brands--they should take a much closer look at the Hispanic market,”
she said. “Advertising dollars are being reduced because
of the economy being what it is, but if they don’t start
paying attention… many of their brands will deteriorate.”
As for why companies have been slow to
increase their ad spending in Hispanic media, she added: “Sometimes
people take a long time to discover what’s facing them every
day.”
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