Hispanic Share of Overall Ad Spend among Top 500 Advertisers in TV, Radio & Print. 2006-2010 Comparisons based on The Nielsen Company. Study Designed and Analyzed for AHAA by Santiago Solutions Group.

1. AHAA 2010
HISPANIC AD SPEND TRENDS REPORT
Hispanic Share of Overall Ad Spend among Top 500 Advertisers in TV, Radio & Print.
2006-2010 Comparisons based on The Nielsen Company.
Study Designed and Analyzed for AHAA by Santiago Solutions Group.
association of hispanic advertising agencies
Rev 11-01-2011

2. Introduction
This
study
marks
the
first
time
that
a
direct
correlation
between
overall
Hispanic
ad
spending
and
a
company’s
overall
revenue
has
been
found.
For
Best-­‐In-­‐Class
companies,
which
are
defined
as
U.S.
companies
with
a
consistent
Hispanic
allocation
of
marketing
dollars
of
more
than
14.2
percent,
this
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.
As
the
evolution
of
the
U.S.
Hispanic
population
unfolds
over
the
coming
years,
many
advertisers
continue
to
take
a
hard
look
at
their
investments
and
propensity
for
growth
relative
to
the
Hispanic
consumer.
The
2010
Census
underscores
the
diversity
of
the
Hispanic
market
that
requires
and
demands
that
brands
and
industry
categories
reevaluate
their
stake
in
the
Hispanic
consumer
marketplace.
As
the
leading
voice
for
Hispanic
advertising,
AHAA
offers
this
Hispanic
Marketing
Investment
Trends
Report
to:
• Provide
marketers
with
a
snapshot
of
industry
performance;
• Engage
and
educate
various
industries
about
the
Hispanic
market
prospect;
• Benchmark
overall
and
industry
specific
allocation
shifts;
• Introduce
useful,
realistic
and
adaptable
approaches
for
setting
appropriate
resource
levels
by
major
product
categories.
Hispanic
Spend
Trends
among
Top
500
Advertisers
In
2010,
coming
on
the
heels
of
the
recession,
Hispanic
media
spend
by
the
Top
500
advertisers
stood
at
$4.3
billion,
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.
• Hispanic
media
spend
by
the
Top
500
stood
only
$163M
below
its
peak
in
2007
showing
a
strong
recovery.
• The
Top
500
Advertisers’
Hispanic
media
spend
as
a
share
of
their
overall
ad
spend
stood
at
5.0%,
a
slight
share
loss
of
4
tenth
of
a
share
point
from
2009.
Page
1
Page 1

3.
Methodology
The
overall
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.
Total
and
Hispanic
advertising
spending
for
the
top
500
advertisers
was
tabulated
using
The
Nielsen
Company
data
for
each
of
the
years
2006-­‐2010.
The
Nielsen
Company
figures
include
Hispanic-­‐centric
media
(Spanish,
Bilingual
and
English)
across
network,
cable
and
spot
television
markets;
local
radio
markets;
national
magazines;
and
local
newspapers.
Using
this
data,
the
total
Hispanic
spend
out
of
all
advertising
was
calculated.
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.
Classification
of
Hispanic
Advertisers
Page 2
For
purposes
of
this
study,
Hispanic
Advertisers
were
classified
according
to
their
Advertising
Spend
Levels
2

4. 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
cadvertisement
nnual
revenue
o
the
Hispanic
market
at
a
proportion
that
is
equal
to
or
• Best-­‐In-­‐Class:
Allocating
ompounded
a expenditures
t growth
rates.
greater
than
the
percentage
of
adults
in
the
United
S
tates
that
are
Hispanic
(according
to
the
2010
Census).
• While
2010
showed
a
major
spend
increase
in
Hispanic
media,
the
number
of
advertisers
ranking
in
the
top
Classification
of
Hispanic
Advertisers
• Best-­‐In-­‐Class:
Allocating
a>14.2%)
and
Lexpenditures
to
the
Hdecreased
from
95
to
80.
two
tiers,
Best-­‐In-­‐Class
(dvertisement
eaders
(6.4%-­‐14.2%),
ispanic
market
at
a proportion
that
is
equal
to
or
For
greater
than
this
ptudy,
Hispanic
dults
in
the
United
lassified
according
to
their
Advertising
he
2010
evels
purposes
of
the
s ercentage
of
a Advertisers
were
c States
that
are
Hispanic
(according
to
t Spend
L Census).
2• In
2010,
only
5%
of
the
Top
500
Advertisers
ranked
as
Best-­‐In-­‐Class,
Leaders
are
11%,
Followers
are
11%,
• While
2010
showed
a
mmajority
(57%)
was
iin
tHispanic
media,
the
number
of
advertisers
ranking
in
the
top
Laggards
16%,
while
a
ajor
spend
increase
n
he
Denial
classification.
• Best-­‐In-­‐Class:
Allocating
advertisement
expenditures
to
the
Hispanic
market
at
a
proportion
that
is
equal
to
or
two
tiers,
Best-­‐In-­‐Class
(>14.2%)
and
Leaders
(6.4%-­‐14.2%),
decreased
from
95
to
80.
greater
than
the
percentage
of
adults
in
the
United
States
that
are
Hispanic
(according
to
the
2010
Census).
•
In
2010,
only
5%
of
the
Top
500
Advertisers
ranked
as
Best-­‐In-­‐Class,
Leaders
are
11%,
Followers
are
11%,
• While
2010
showed
a
major
spend
increase
in
Hispanic
media,
the
number
of
advertisers
ranking
in
the
top
Laggards
16%,
while
a
majority
(57%)
was
in
the
Denial
classification.
two
tiers,
Best-­‐In-­‐Class
(>14.2%)
and
Leaders
(6.4%-­‐14.2%),
decreased
from
95
to
80.
• In
2010,
only
5%
of
the
Top
500
Advertisers
ranked
as
Best-­‐In-­‐Class,
Leaders
are
11%,
Followers
are
11%,
Laggards
16%,
while
a
majority
(57%)
was
in
the
Denial
classification.
Page
3
Page 3

5. Correlation
between
Hispanic
Allocation
and
Revenue
Growth
Rate
• Forty
companies
showed
an
aggregate
Hispanic
allocation
of
over
14.2%
which
equals
the
percentage
of
adults
that
are
Hispanic
per
the
2010
Census.
In
order
to
create
a
Best
in
Class
set
for
the
regression
analysis,
companies
which
did
not
have
consistent
published
financials
such
as
venture
capital
firms,
companies
which
had
restated
their
earnings,
non-­‐profit
organizations
and
companies
which
grew
on
acquisition
sprees
rather
than
consumer
driven
growth
were
eliminated.
As
a
result,
the
final
set
of
Best-­‐In-­‐Class
in
the
analysis
included
the
following
14
companies:
AFC
(Church’s,
Popeye’s),
Allstate,
AutoZone,
Colgate-­‐Palmolive,
Collective
Brands
(Payless),
DirecTV,
Domino’s
Pizza,
EchoStar
Communications
(Dish
Network,
Dish
Latino),
Heineken
(Tecate),
JC
Penney,
Rent-­‐A-­‐Center,
SAB
Miller
(Miller-­‐Coors),
State
Farm,
and
Vivendi
(Universal
Music
Group).
• The
AHAA
analysis
found
that
there
is
indeed
a
strong,
positive
correlation
between
the
percentages
of
overall
ad
spend
allocation
to
Hispanic
media
and
a
company’s
revenue
growth.
The
percent
of
ad
spend
allocated
to
Hispanic
markets
is
a
very
important
determinant
of
the
company’s
overall
revenue
growth
rate
–consistent
ad
allocations
greater
than
14.2%
explain
about
half
of
best-­‐in-­‐class
companies
revenue
growth
rate.
As
of
October
2010,
a
statistically
significant
correlation
has
only
been
found
among
Best-­‐In-­‐Class
companies.
AHAA
will
continue
studying
data
to
unearth
more
learnings.
o Our
analysis
between
the
2006-­‐2010
aggregate
Hispanic
Allocation
Percentage
and
2006
to
2010
Compounded
Revenue
Growth
Rate
resulted
in
a
positive
correlation
of
approximately
.68.
By
taking
the
square
of
the
correlation
coefficient,
we
obtain
coefficient
of
determination
of
.47
for
consistent
Best-­‐In-­‐Class
companies.
That
is
to
say,
47%
of
the
variation
among
2006-­‐2010
revenue
growth
rates
of
consistent
Best-­‐In-­‐Class
companies
is
determined
by
2006-­‐2010
Hispanic
Allocation
Percentage.
o This
result
indicates
that
higher
2006-­‐2010
Aggregate
Hispanic
Allocation
Percentages
are
associated
with
higher
2006-­‐to-­‐2010
Revenue
Growth
Rates.
In
Fact,
Hispanic
allocation
alone
explains
about
half
of
the
variance
in
revenue
growth
over
a
5
year
period.
While
the
sample
size
is
small,
we
are
still
confident
about
our
results
since
additional
testing
continuously
supported
our
findings.
Further
the
results
are
consistent
with
what
many
Hispanic
marketing
leaders
already
experiencing.
• In
other
words,
the
AHAA
study
found
that,
in
general,
for
consistent
Best-­‐In-­‐Class
marketers…
‒ a
5
percentage
point
shift
in
ad
spend
allocation
from
non-­‐Hispanic
towards
Hispanic
would
yield
between
1.1
and
6.6
percentage
point
increase
in
overall
corporate
revenue.
‒ a
10
percentage
point
increase
in
Hispanic
allocation
will
yield
between
2.2%
and
11.2%
acceleration
in
annual
topline
revenue
growth
rate.
• That
is,
a
Best-­‐In-­‐Class
company
allocating
one
quarter
of
its
ad
spend
to
Hispanic
media
over
five
years,
would
generate
annual
revenue
growth
of
about
6.7%.
• Findings
were
found
with
a
confidence
level
of
99%.
• Ten
out
of
the
fourteen
aggregate
Best-­‐In-­‐Class
companies
in
the
analysis
work
with
a
Hispanic
specialized
Agency
so
it
is
not
surprising
that
these
companies
have
consistently
invested
and
have
positively
gained
from
rapid
growth
rates.
While
proper
investment
is
basic,
understanding
the
most
appropriate
cultural
insights
to
develop
integrated
strategies
from
communications
to
customer
experience
is
crucial
to
turning
ad
spend
into
sustainable
revenue
growth.
Page 4

6. Conclusions
Specialized
marketing
to
Hispanic
consumers
is
more
valuable
today
than
ever.
The
diversity
within
the
Hispanic
market—
age,
acculturation
level,
country
of
origin,
income,
education,
and
geographic
location—
underscores
the
importance
of
meaningful
creative
and
content
that
is
not
“one-­‐size-­‐fits-­‐all.”
Based
on
population
and
buying
power
alone,
Hispanic
consumers
are
among
the
most
desirable
target
markets.
The
U.S.
Hispanic
population
continues
to
grow
more
rapidly
than
the
non-­‐Hispanic
population
and
according
to
Census
figures
by
2014
one
person
out
of
every
six
living
in
the
U.S.
will
be
of
Hispanic
origin.
Even
through
a
deep
recession
and
softer
consumer
demand,
the
AHAA
study
revealed
a
direct
connection
between
consistent
and
appropriate
Hispanic
ad
spending
and
overall
topline
revenue
growth.
As
companies
recover
and
reinvest,
ad
spend
should
be
seen
more
broadly
as
a
corporate
investment
that
will
maximize
companies
growth
in
the
Hispanic
market.
Now
is
the
time
to
ensure
that
Hispanic
budgets
are
increased
and
optimum
allocation
to
target
Hispanics
is
secured.
According
to
the
AHAA
study,
a
company
allocating
one
quarter
of
its
ad
spend
to
Hispanic
media
over
five
years
would
generate
annual
revenue
growth
of
6.7
percent.
This
research
underscores
that
companies
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.
While
the
AHAA
data
only
measured
above
line
advertising
expenditures,
as
leading
Hispanic
marketers
we
know
that
a
successful
Hispanic
program
must
be
multidimensional,
multi-­‐platform
efforts.
This
study
emphasizes
the
importance
of
right-­‐sizing
a
company’s
Hispanic
market
opportunity.
Right-­‐sizing
the
investment
levels
will
establish
attainable
Hispanic
revenue
and
ROI
goals.
In
addition,
Ad
spend
should
be
more
broadly
seen
as
marketing
investment
to
propel
companies
from
some
Hispanic
growth
to
full
potential
growth
with
campaigns
reflecting
the
most
appropriate
cultural
insights
and
developing
integrated
marketing
strategies
from
communications
to
customer
experience
.
Setting
the
proper
investment
for
the
potential
Hispanic
market
opportunity
can
play
a
significant
role
in
leading
companies
out
of
the
recession.
As
companies
recover
and
reinvest
after
the
deepest
part
of
the
recession,
now
is
the
time
to
ensure
that
Hispanic
budgets
are
increased
during
the
second
half
of
the
year
and
optimum
allocation
to
target
Hispanics
is
secured.
Page 5

7.
Hispanic
Allocation
Trends
by
Category
Increases
• At
$707M,
Packaged
Goods
advertisers
are
the
leading
investor
against
Hispanic
consumers,
increasing
$140M
in
ad
spend
over
2009
and
increasing
their
share
of
allocation
to
Hispanics
by
1.6
points
to
6%.
‒ In
fact,
Consumer
Packaged
Goods
(including
Foods
and
Personal
Care)
continued
a
five-­‐year
trend
of
increasing
their
spending
toward
Hispanic
media
while
cutting
allocations
to
non-­‐Hispanic
media.
Since
2006,
CPGs
have
shifted
two
allocation
points
to
Hispanic
away
from
non-­‐Hispanic,
increasing
their
spend
to
51
percent
in
Hispanic
media
vs.
a
12
percent
increase
in
non-­‐Hispanic
media.
• The
converging
Telecom
and
Media
&
Entertainment-­‐Subscription
TV
categories
follow
closely
with
$502M
or
9%
and
$349M
or
13%
Hispanic
ad
spend
and
allocation
respectively,
investing
$850M
combined
in
2010
and
adding
$415M
to
Hispanic
media
over
2009.
As
an
aggregate,
they
surpass
Packaged
Goods
as
the
largest
category
in
dollars
spend
and
Hispanic
allocation.
• Hispanic
ad
spend
in
the
Auto
Insurance
category
increased
by
$97M
over
2009
to
12.5%
allocation
while
Non-­‐Hispanic
spend
decreased
by
$73M
over
the
same
period.
• With
a
remarkable
jump
in
Hispanic
allocation
from
0.5%
to
9.8%,
Fitness-­‐Sports
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%
to
a
24%
allocation
of
overall
spend
to
Hispanic
in
2010.
• During
the
same
period,
Beer
advertisers
have
remained
loyal
to
the
Hispanic
community
as
they
allocated
15%
or
about
$150M
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
also
experienced
increases.
• 6
out
of
the
8
categories
gaining
at
least
2
points
in
Hispanic
allocation
did
so
by
not
only
increasing
the
spent
ad
spend
toward
the
Hispanic
market,
but
also
by
decreasing
the
dollar
invested
in
the
Non-­‐Hispanic
market;
Financial
Services-­‐Other,
Fitness-­‐Sports,
Insurance-­‐Auto,
Media
&
Entertainment
-­‐Subscription
TV/Radio,
Restaurants-­‐QSR,
Retail-­‐Specialty
Apparel
.
Decreases
• The
Automotive
categories
in
total,
manufacturers
and
retailers
combined,
have
shown
an
aggregate
decrease
of
approximately
$259M
since
2006.
In
contrast,
all
other
50
categories
in
aggregate
have
shown
an
upturn
of
$280M
or
+8%
in
the
same
period.
• Private
Investment
Firms’
ad
expenditures
on
the
Hispanic
segment
have
taken
a
sharp
fall
from
9.0%
in
2006
to
a
pedestrian
0.7%
in
2010.
• Similarly,
Non-­‐Profit
advertisers
took
a
nose
dive
of
10.6%
from
15%
allocation
in
2006
to
5%
in
2010.
• 16
categories
had
decreases
in
Hispanic
allocation
of
over
2%:
Travel
-­‐Air,
Lodging,
Car,
Cruise,
Retail-­‐Mass
Merch/Dept
Stores,
Retail-­‐Electronics,
Private
Investment
Firm,
Non-­‐Profit,
Financial
Services-­‐Credit
Cards,
Energy,
Direct
Consumer
Marketing,
Beverages
-­‐Non-­‐Spirits,
Automotive
Parts,
Automotive
-­‐Dealers
Assn,
Media
&
Entertainment,
Insurance-­‐Health,
Government
-­‐
Gambling
–
Lottery,
and
Apparel.
Page
7
Page 6

8.
Page
8
Page 7

9. Best-­‐In-­‐Class
Categories
• Three
out
of
fifty-­‐one
categories
ranked
as
Best-­‐In-­‐Class
in
2010:
Beer,
Direct
Consumer
Marketing,
and
Financial
Services-­‐Tax
Prep
&
Other.
• The
Beer
category
earned
a
Best-­‐In-­‐Class
standing
and
edged
1.2
share
points
in
allocation
to
15%.
• Direct
Consumer
Marketing
was
the
only
Best-­‐In-­‐Class
category
that
decreased
its
spending,
cutting
its
Hispanic
media
ad
spend
by
33%
over
its
pre-­‐recession
level
of
$118M
in
2006.
Leaders
Categories
• Among
Hispanic
allocation
Leaders,
the
Media
&
Entertainment
–Subscription
TV/Radio
category
hurled
the
most,
nearly
$246M
or
238%
since
2006.
o The
data
shows
that
the
Media-­‐Entertainment-­‐Subscription
TV/radio
category
has
become
a
consistent
Leader
advertiser
to
the
Hispanic
market
since
2006.
Page 8
Page
9

10. • Both
Auto
Insurance
and
Media
&
Entertainment
-­‐Subscription
TV/Radio
went
from
being
Followers
in
2006
to
being
Leaders
in
2010
(almost
BIC),
with
a
combined
increase
in
Hispanic
allocation
of
17.5%.
• The
Restaurants-­‐QSR
category
showed
also
a
significant
increase
of
30%
or
$70M
in
incremental
investment
to
end
at
$301M
in
2010.
• The
Home
Improvement
&
Builders
category
rebounded
from
the
recession
dip
increasing
6%
over
its
2006
base
of
$91M.
• Among
2010
Leader
categories,
only
Government&
Lottery
and
Retail
Mass
Merchandisers/Department
Stores
experienced
decreases
in
overall
spending.
Follower
Categories
• 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%
compared
to
only
16%
up
among
Non-­‐Hispanic
traditional
media.
• Both
the
Automotive
Manufacturer
and
Media
&Entertainment
categories
experienced
decreases
in
excess
of
$150M
each
over
2009.
• Among
Followers,
only
four
categories
experienced
decreases
in
Hispanic
allocation
from
2006
to
2010,
with
the
sharpest
decline
coming
from
the
Automotive
Industry,
manufacturers
and
retailers
combined;
with
an
approximate
decline
of
x%
in
Hispanic
ad
spend.
Page
10
Page 9

11.
Laggard
Categories
• 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.
• Amongst
Laggards,
the
Pharmaceutical
and
Automotive
Dealers-­‐Assn
categories
experienced
decreases
in
excess
of
$50M
each.
In
Denial
Categories
• Among
the
13
Denial
categories,
all
but
three
categories
of
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
$86M.
Page
11
Page 10

12.
Page 11
Page
12