Increased Spending on Hispanic Ads Boosts Marketers’ RevenueNovember 11, 2011
Association of Hispanic Advertising Agencies says
But 57% of Top 500 Advertisers Allocate Less Than 1% to Target Latinos
Marketers who spend heavily on Hispanic media are seeing their revenue grow faster than those that don’t, according to a new analysis by the Association of Hispanic Advertising Agencies. For advertisers who allocated 14.2%–the percentage of adults who are Hispanic in the U.S.—or more of their ad budgets to Hispanic marketing, that Hispanic allocation explains about half of the variance in their revenue growth over the last five years, the study found (www.ahaa.org).
But those are rare marketers. The AHAA study found that 57% of the top 500 advertisers spent less than 1% of their ad budgets on Hispanic advertising in 2010. AHAA refers to that group, which includes Fedex, Southwest Airlines, Hasbro and Mattel, as “in denial.”
The study, conducted by Santiago Solutions Group, split the top 500 advertisers into five tiers. Just above the “in denial” group, the “laggards” — 16% of all advertisers — spent up to 3.5% of their budgets on Hispanic advertising and the “followers” — 11% of advertisers — spent up to 6.3. At the top of the pyramid, just 5% of the top 500 marketers spent more than 14.2% of their 2010 ad budgets on Hispanic media, and 11%, dubbed “leaders,” spent between 6.4% and 14.2%.
Carlos Santiago, president and chief strategist, said that on average about 5% of the total print, radio, and TV budgets of the top 500 advertisers are dedicated to the Hispanic market.
“Brands with a Hispanic market focus with determination and discipline are going to see more rapid growth,” he said. “Companies cannot just pop in and out of the Hispanic market and see benefits.”
Robb High, an agency new business consultant who spoke at AHAA’s annual conference this week in Miami, urged Hispanic agencies to compete for general market assignments, just as general market agencies are trying to move into the Hispanic space. “It requires a perception change,” he said.
Some Hispanic agencies are already getting there. General Mills, ranked in the “leaders” category in AHAA’s study, uses its Hispanic agencies for some general market work for certain brands. Casanova Pendrill, for instance, is both the general market and Hispanic agency for FUN da-middles, a new cupcake mix with a creamy filling. Three videos debuted last week featuring elaborately decorated cupcakes in awe of a plain cupcake with delicious filling.
And Bromley does general market work for Yoplait Delights and Totino’s. Bromley is re-positioning itself through a new tool based on values and culture, said Jessica Pantinini, Bromley’s chief operating officer. “We found we could segment the total market against values,” she said. The four segments range from “Stagnatives” who aren’t open to outside cultural influences to “Eye to Infinities” who want to share and experiment, she said.
McDonald’s Corp, which ranks in AHAA’s top tier of Hispanic advertisers, even uses its Hispanic TV ads in the general market rotation. This year 15% of McDonald’s general market rotation is devoted to Hispanic spots, done by Alma DDB, up from 10% last year.