2012 Hispanic Allocation Impact on Revenue Growth Study Series: Part III
1Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue Growth
2Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthSection 1INTRODUCTIONSection 12
3Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthAbout the Author & Sources• The study was commissioned by AHAA’s Research Committee and developed and executed by Santiago Solutions Group (SSG), a growth strategy consultancy.• Independent methodological review performed by Dr. Cristina Garcia, professor of mathematics & statistics at USC. Data Contributors• Financial revenue growth data extracted from companies 10Ks.• Parent company advertising spend data for 2006‐2010 Hispanic/Non‐Hispanic media (TV, Radio, Print) collected from The Nielsen Company. • Nielsen Video Census 2012; Mobile Insight Survey: Netview 2012, Mobile Bill Panel, Nielsen TV Panel• 2011 GfK Roper & 2011 Doublebase GfK MRI ‐ Base: All Adults 18+; n=6.6K Hispanics & 46.5K Non‐Hispanics. (Sampling details in Appendix E).• 2010 Geoscape ‐ Consumer Spending Dynamix™• Scarborough USA+ 2011 Release 2 Total; Base: Adults 18+; Respondents: 151,099 White Non‐Hispanics & 27,301 Hispanics
4Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthBackgroundSince 1998, AHAA has been helping its members serve its clients through breakthrough independent studies that • increase understanding of what it takes to win the market, • share new concepts,• and identify best practices of marketing to Latinos.Revenue Growth Study SeriesAHAA has led the industry’s first empirical studies to quantify the relationship and impact of Hispanic investment allocation on annual revenue rate of growth.• In October 2011, Part 1 uncovered a strong positive relationship between allocation of Hispanic ad resources and topline growth among Best‐In‐Class companies, those allocating over 14% of their budgets to Hispanic media.• In March 2012, Part 2 demonstrated that Hispanic Allocation positively affects revenue growth rates for Consumer Packaged Goods companies, explaining about 35% of changes in revenue growth.• This third part of AHHA’s Revenue Growth study focuses on Technology, Telecom and Entertainment companies including:– manufacturers of consumer hardware (computers, TVs, cell phones)– content (media, movies, games)– connectivity providers (cable, satellite, wireless)Study 1Hispanic Ad AllocationTop 500 Overall U.S. AdvertisersStudy 2Hispanic Ad AllocationConsumer Packed GoodsCurrent Study (Study 3)Hispanic Ad AllocationTechnologyOther SectorsFuture studies
5Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthTech Sector ChallengesTech Growth Rates Has Stalled• Domestic revenue growth rates for the tech‐telecom‐entertainment sector plunged from about 11% a year in 2006‐2007 to just about 3% 2009‐2010, about a third of what pre‐recession levels.• Technology and new media will further redefine lifestyles and business models.• “Reset” beyond economic adjustment– Consumers changed over long run• More brand fickle• More frugal value‐orientedMarketers Face More Competing Needs1. Identifying new growth opportunities2. Capturing fair share of fewer growth markets3. Holding on to diminishing importance of aging ‘General Market’
6Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanic Market HighlightsMARKET SIZE• 2010 Population 50.7M1• 2011 Hispanic Share of US Population 17%2• 2011 Hispanic Share of US adults 15%2GROWTH• Hispanic Population 2000‐2010 CAGR8 v Non‐Hispanic 3.6% v. 0.5%3• Hispanic Share of Total US Population Growth 2000‐2010 56%4• Hispanic Share of Labor Force Growth 2010‐2020 74%7ECONOMIC• 2012 Estimated Buying Power $1.2 Trillion5• Hispanic Buying Power 2000‐2010 CAGR v. Non‐Hisp 7.8% v. 3.4%61, 3, 4 2010 Census ACS2 SSG Analysis of Census5,6 Selig Center at the University of Georgia7 Bureau of Labor Statistics8 CAGR = Compound Annual Growth Rate ‐ the year‐over‐year growth rate of an investment over a specified period of time; the rate at which an investment would have grown if it grew at a steady rate.
7Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanics have generated about a third of the Tech consumer base growth; expanding 3x faster than NHWhile Hispanics accounted for 17% of the population in the US, they also contributed to 34.8% of the growth in the Tech‐Telecom‐Entertainment consumer base. During 2006‐2010, the Hispanic consumer base in the Tech‐Telecom‐Entertainment category grew 3 times faster than the Non‐Hispanic consumer base.Source: SSG Analysis of 2006-2010 GfK MRI
8Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthStudy ObjectivesTo understand if there a significant difference in the revenue growth rate attained by Tech‐Telecom‐Entertainment advertisers which designate higher allocation of ad resources to the Hispanic market and those that focus less.
9Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthStudy VariablesAggregate Hispanic Allocation 2006‐2010The percentage of ad budgets dedicated to Hispanic media (Hispanic Allocation) possibly impacting Revenue growth rates*. • The % of total advertisement dollars spent in TV, Radio, and Print (per Nielsen tracking) assigned to Hispanic‐centric media channels throughout 2006 to 2010. – Accepted, standardized marketing spend measurement of below the line expenditures is not available, thus, not utilized. – Online expenditures will be included in future studies.Revenue CAGR 2006‐2010 Revenue CAGR is the dependent variable which was tested against different levels of Hispanic Allocation.• Revenue reflected from US‐only, organic, per 10Ks and SEC reports. − May have been adjusted to exclude extraordinary financial transactions.− Revenues have been adjusted where possible to include streams from acquisitions, if enough clear data has been stated in corporate financials. *CAGR = Compound Annual Growth Rate ‐ the year‐over‐year growth rate of an investment over a specified period of time; the rate at which an investment would have grown if it grew at a steady rate.
10Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthMethodologyHispanic Allocation and organic revenue growth rates of 40 Tech‐Telecom‐Entertainment companies, a subset of the Top 500 US advertisers which are publicly‐held, were tested for 2006 to 2010.• First, we tested the linear association of the two variables through correlation analysis.• Next, the causal nature of Hispanic allocation upon revenue growth rate was tested through linear regression analysis. • Details of statistical analysis n Section 5.
11Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthTech Sample Set• Out of about 35,000 US advertisers tracked by Nielsen, identified the Top 500 overall Advertisers (TV, Radio, Print) by year and in aggregate between 2006 and 2012.• Matched each parent company to available US organic revenue data from 10Ks or published disclosure. Adjusted for extraordinary transactions and calculated 2006‐2010 compounded annual growth rates.• Companies with financials that were not adjustable such as some with undisclosed details around M&As, were eliminated from the final regression set.• Ended with 40 companies in the Technology, Telecom, Media & Entertainment sector.Top 500 U.S. Overall Advertisers2006-2010(500)Public(418)Consistent Advertisers(246)Publicly Tradedw/ clear Organic US Revenue(235)Tech-Telecom-Entertainment(40)Unadjustable M&AsInconsistent Data(-9)Inconsistent Advertisers(-172Private(-82)
12Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue Growth40 Tech‐Telecom‐EntertainmentCompanies In Sample SetFor GE, only its Media & Entertainment revenues while owners of NBCU were included in the analysis; excluded all other LOBs revenue streams.
14Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthFinding 1: Tech‐Telecom‐Entertainment Growth Rates Are Directly and Positively Impacted by Hispanic Allocation• The study shows a direct & positive relationship between Tech‐Telecom‐Entertainment’s Hispanic ad allocation and overall topline revenue growth.• The study shows that in general the higher the Hispanic allocation displayed on the horizontal axis, the higher propensity of organic revenue CAGR, indicated on the vertical axis, attained by companies in the sector, and vice versa.Please see Appendix D (Graph 1) for Detailed Graph and Graphical Analysis.
15Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue Growth• The top 30 percentile of Allocation and top 30 CAGR percentile includes DirecTV, Echostar/Dish Network, Metro PCS, Leap Wireless, Time Warner Cable and Verizon.• The mid 40 percentile in Allocation & Growth include: T‐Mobile, Cablevision, AT&T, Lions Gate Entertainment, Comcast, Vonage, Best Buy and News Corp.Finding 1: Tech‐Telecom‐Entertainment Growth Rates Are Directly and Positively Impacted by Hispanic AllocationPlease see Appendix D (Graph 1) for Detailed Graph and Graphical Analysis.Top 30 PercentileAnomalies(See p 17 & Appendix F)Mid 40PercentileBottom 30Percentile
16Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthFinding 2: Apple & Samsung are in a class apartDeviations from the normal or anomaliesAs the top global innovation leaders, Apple & Samsung have reinvented how the world communicates, gathers information and is entertained. • In 2007 Apple’s iPhone reinvented the phone and ushered in the modern era of intelligent, connected devices. • Samsung’s Galaxy, the first set on Google’s Android platform, was released in 2008 and has since overtaken the lead smartphone position. In just five years, they forced a flurry of changes like tablets, apps, and mobile marketing as well as upheaval among tech manufacturers, retailers and data services revenues for connectivity providers.See more details on Apple & Samsung in Appendix F
17Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthFinding 3: As Hispanic Allocation increases, the revenue rate of growth of Tech competitors soars sharplyFrequencies*• Companies in the Top Tier allocate twice as much as the Mid Tier – but the Top Tier growth is 3 times larger than the Mid Tier• The companies in the Bottom Tier see a decrease in growth – From these frequencies it seems that minimal allocation means no growth or even a reduction in growth. This trend is what the regression model will test...13.3%6.2%0.4%12.9%3.4%‐1.4%‐4.0%‐2.0%0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%Top Tier 71‐100 PercentileMid Tier 31‐70 PercentileBottom Tier 0‐30Average Allocation & Growth By Tier*06‐10 Hisp Allocation06‐10 Revenue CAGRAll Avg Allocn 6.3%All Avg Rev CAGR 3.4%*Excludes Anomalies: Apple & Samsung
18Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthFinding 4: Every 1 point increase in Hispanic Allocation yields a boost of about two‐thirds of a point in annual growth rate• The regression demonstrates that for every additional percentage point increase in Hispanic Allocation, we would expect an average annual organic revenue growth boost of 0.68%.– That is, on average, for allocating an additional 10% of the company’s ad resources to Hispanic media over 5 years, an average increase of 6.8% in organic revenue annual growth rate would be expected.• Organic revenue growth rates decline sharply as Hispanic share of budgets decrease and vice versa.+1 point ↑Hispanic Allocation+0.68 point ↑Annual Revenue Growth Rate
19Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthFinding 5: Hispanic Allocation explains 30% of increase in Tech Sector Revenue Growth Rates*• Hispanic Allocation explains a substantial portion (30%) of Tech‐Telecom‐Entertainment increase in topline revenue growth– The other 70% may include other critical factors such as product innovation, user experience, brand equity/reputation, brand experience, strategic focus, price, operational alignment, distribution, sales force, past performance, talent, incentives, overall segmentation expertise, etc. – Further analysis is needed to determine what other drivers could be measured in standard ways and what statistical contribution these may have in revenue growth.Hispanic MarketingAllocation30%Other Drivers ofGrowth70%Tech‐Telecom‐Entertainment & Revenue Growth Drivers* Excluding Anomalies: Apple & Samsung
20Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthFinding 6: Including leading global innovators, Hispanic Allocation explains 17% of Revenue CAGR• Including Apple & Samsung, Hispanic Allocation alone explains about 17% of Tech‐Telecom‐Entertainment increase in topline revenue growth.– The other 83% may include other critical factors such as product innovation, user experience, brand reputation, brand experience, strategic focus, price, measurement tools, distribution, sales force, segmentation expertise, etc. – Further analysis is needed .• The study shows that an averagerevenue growth rate of 0.56% over the 5 years is expected for every additional percentage point increase in Hispanic allocation.Hispanic MarketingAllocation17%Other Drivers ofGrowth83%Tech‐Telecom‐Entertainment & Revenue Growth Drivers
21Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthSummary Findings1. There is positive relationship between Hispanic allocation and Revenue CAGR, meaning, the more a company allocates Hispanic budget, the higher the corporate growth.– As Hispanic Allocation increases, the revenue rate of growth of Tech competitors soars sharply2. Tech‐Telecom‐Entertainment companies show that Hispanic Allocation accounts for 30% of increase in revenue growth.• Including Apple & Samsung, Hispanic Allocation explains about 17% of the fluctuations in revenue growth rates, accentuating the need for Hispanic allocation among tech convergence companies that don’t have revolutionary innovations and brand experiences.
23Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthPsychographic & Behavioral Drivers By Purchase Cycle Stage
24Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanics Needs of Technology Go Beyond Functionality!• ToTop Box: Agree Completelyor Agree Mostly,or VeryImportantHispanicIndex v NHI want others to say "wow" when they see my electronics. 169My cell phone is an extension of my personality.163I am among the first of my friends and colleagues to try new technology products.133Source: 2011 Doublebase GfK MRI - Base: All (n= 6.6K Hispanics & 46.5K Non-Hispanics)
25Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanics Tend To Be Tech Early Adopters and InfluentialTop Box: Agree Completelyor Agree Mostly,or Very ImportantHispanicIndex vNHI give others advice when they are looking to buy technology or electronics products.153I enjoy learning about technology or electronic products from others.131I enjoy reading about new technology products.131Source: 2011 Doublebase GfK MRI - Base: All (n= 6.6K Hispanics & 46.5K Non-Hispanics)
26Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanics Are Ideal Tech Consumers!Top Box: Agree Completely orAgree Mostly, orVery ImportantHispanicIndex vNHI’m fascinated by new technology.130I prefer products that offer the latest technology.129I’m willing to pay more for top quality electronics.125• Technology friendly and willing to pay more Source: 2011 Doublebase GfK MRI - Base: All (n= 6.6K Hispanics & 46.5K Non-Hispanics)
27Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanics Use Tech As Extension of their Highly Social CultureHigh tech adopters; leaped frog to mobile• Nearly as likely to have Internet at home 90• More likely to have smartphone 128• Monthly spend on cell phones 115• Only cell 129Particularly social across all platforms• Calls per day 144• Monthly time in social networks 113Heavy video content users across all screens• Time spent streaming 118• Online Video monthly usage 163• Mobile Video monthly usage 120Source: Nielsen Video Census 2012; Mobile Insight Survey: Netview 2012, Mobile Bill Panel, Nielsen TV PanelHispanic Index to NH
28Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanics Growth Opportunity Will Continue To Be RobustSource: Scarborough USA+ 2011 Release 2 Total; Base: Adults 18+; Respondents: 151,099 White Non‐Hispanics & 27,301 HispanicsTech Gadget2011 HouseholdPenetrationHisp Index (vs WNH)Purchase IntentNext 12 MonthsHisp Index (vs WNH)iPad 141 159Video Game system 103 209MP3 player 98 174Blu‐ray disc player 93 137HDTV 91 170• Hispanics intent to purchase hottest Tech products exceeds that of White Non‐Hispanics
29Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanics offer high Lifetime ValueAverage Aggregate Household Lifetime SpendingNH White $435,690Black $319,359Asian $1,043,365Hispanic $601,991• Cumulative total Tech‐Telecom‐Entertainment spending is 38% greater for Hispanic households than that of White Non‐Hispanic households– Driven by 16 years longer Hispanic household lifespan and higher expenditures than non‐Hispanic Whites.Source: 2010 Geoscape Consumer Spending Dynamix.™
30Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanics See Technology as Entertainment! Top Box: AgreeCompletely orAgree Mostly, orVery ImportantHispanicIndexI think of my mobile phone as a source of entertainment.137Computers can be a good source of entertainment.117Source: 2011 Doublebase GfK MRI - Base: All (n= 6.6K Hispanics & 46.5K Non-Hispanics)
31Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthSection 4IMPLICATIONSSection 131
32Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthHispanic Allocation Impact on Growth Key Takeaways• This study shows that Tech‐Telecom‐Entertainment companies which allocate higher share of their ad resources at Hispanics, return higher growth rates than those that apportion less.− Devoting adequate resources to Hispanic has a critical role in optimizing Hispanic growth• Hispanic allocation is a significant driver to healthy organic growth in this discretionary category– Hispanic Allocation is substantial enough in the ‘winning equation’ to transform company results ‐‐propelling players, obstructing competitors, building sustainable advantages – This is especially so for companies that don’t have revolutionary product innovations in their pipeline like the first iPhones, iPads or Google/Android smartphones.– Compromising Hispanic Allocation can have negative short and long‐term growth effects. • Huge growth opportunity lies ahead as Hispanics continue to lead adoption and usage– Brand loyalties will be increasingly at stake as Hispanics dominate segment growth.
33Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthImplications for Tech Convergence Sector• Real bottom‐line benefits come from consistent allocation investments. • Allocations to communications is only the beginning; decisively as important is corporate‐wide strategic and operational integration– Developing holistic strategies from communications and product innovation to brand‐customer experience.– Broad use of all elements of marketing: above and below the line.– Responding to the most appropriate cultural insights.– As in the CPG sector, successful sustainable growth advantages in Hispanic market might enhance valuation differentials. • Many companies may be falling short of their optimal revenue generation or handing off growth points to competitors with higher allocation and cohesive Hispanic‐centric strategies.
34Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthSection 5STATISTICAL DETAIL & MODEL VALIDATIONPresented by Dr. Cristina Garcia, Math & Statistics Professor at USCAHAA Methodology AdvisorSection 134
36Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthTest ValidationsAll validation tests corroborated the same findings. Hispanic Allocation has a direct & significant impact on companies overall revenue growth.Main Regression
37Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthOther Key FindingsThree additional validation test regressions corroborated the same findings with 95% statistical significance including:• larger sample size among Top 500 advertisers which are publicly held, 235 companies, looking at allocations relationship with aggregate revenue CAGR• same sample but looking at relationship between allocation and individual years growth changes (between 2006 & 2010),• Similar statistical significant findings across 5 other categories.• See Detailed Findings after Psychographics section.
38Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthMain Regression Model (w/o Anomalies)• Hispanic Allocation alone explains about 30% of changes in revenue growth over a 5 year period for Tech‐Telecom‐Entertainment (R2=0.30)– An R squared of .30, tells us that roughly 30% of a company’s revenue growth is driven by changes in Hispanic Allocation.Revenue Growth over 5year period (CAGR 06-10)AggregateHispanicAllocation2006-2010Tech‐Telecom‐Entertainment (N=38)
39Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthTech‐Telecom‐Entertainment Model Findings (w/o Anomalies)• We would expect an average revenue growth of 0.678% over the 5 years for every additional percentage point increase in Hispanic allocation.• In other words, the expected range for allocating 10% of the company’s ad resources to Hispanic media over 5 years is an increase of 3.26% to 10.29% in overall corporate revenue growth rate.HispanicAllocation30%All Other Drivers ofGrowth70%Revenue Growth Drivers for Tech‐Telecom‐EntertainmentN=38
40Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthMain Regression Model• Hispanic Allocation alone explains about 17% of changes in revenue growth over a 5 year period for Tech‐Telecom‐Entertainment (R2=0.17)– An R squared of .17, tells us that roughly 17% of a company’s revenue growth is driven by changes in Hispanic Allocation.Revenue Growth over 5year period (CAGR 06-10)AggregateHispanicAllocation2006-2010Tech‐Telecom‐Entertainment (N=40)
41Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthTech‐Telecom‐Entertainment Model Findings– We would expect an averagerevenue growth of 0.559% over the 5 years for every additional percentage point increase in Hispanic allocation.– In other words, the expected range for allocating 10% of the company’s ad resources to Hispanic media over 5 years is an increase of 1.48% to 9.7% in overall corporate revenue growth rate. HispanicAllocation17%All Other Drivers ofGrowth83%Revenue Growth Drivers for Tech‐Telecom‐EntertainmentN=40
42Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthTest 1: Is Aggregate Hispanic Allocation Important?YES! Hispanic Allocation directly impacts topline revenue growth for Top 500 Advertisers• On average, for every additional percentage point increase in Hispanic allocation, we would expect revenue growth of .47% over the 5 years. • In other words, allocating 10% of the company’s ad spend to Hispanic media over 5 years would generate revenue growth of 4.7% over the 5 year periodAggregate GrowthCAGR 06‐10Aggregate Hispanic Allocation06‐10 TOP ADVERTISERS (N=235)
43Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthTEST 2: Individual Years Growth and Aggregate Hispanic AllocationRevalidated! Both directly impact topline revenue growthRevenue Growth over 5year periodAggregateHispanicAllocation06-10CAGR06-07, 07-08,08-09, 09-10• Of course, each year’s CAGR most significantly affects the company’s revenue growth over 5 years• R‐square 0.305 In other words, 30.5% of the variation in growth over the 5 years (CAGR 06‐10) is explained by the ad spend in Hispanic media over the 5 years and each year’s annual growth. • On average, for every additional percentage point increase in Hispanic allocation, we would expect revenue growth of .468% over the 5 years. • In other words, allocating 10% of the company’s ad spend to Hispanic media over 5 years would generate revenue growth of 4.68% over the 5 year period.TOP ADVERTISERS (N=235)
44Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthTest 3: Hispanic Allocation, Super Categories and Revenue CAGR Revalidated Again! Hispanic Allocation Is Relevant to Revenue Growth!Revenue Growth over 5 yearperiodCategories:Auto, Tech &Entertainment, Retail,CPG,Finance/InsuranceCAGR:06-07, 07-08, 08-09, 09-10HispanicAllocation:06-10• R‐square .376, in other words, 37.6% of the variation in growth over the 5 years (CAGR 06‐10) is explained by the ad spend in Hispanic media over the 5 years andeach annual year’s growth. • On average, for every additional percentage point increase in Hispanic allocation, we would expect revenue growth of 0.464% over the 5 years. • In other words, allocating 10% of the company’s ad spend to Hispanic media over 5 years would generate revenue growth of 4.64% over the 5 year period.TOP ADVERTISERS (N=235)
45Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthSection 6APPENDIXSection 145
46Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthAppendix A Ranking By Hispanic AllocationCompany2006-2010 HispanicAllocation PercentageRank Percentile2006-2010 RevenueGrowth RateECHOSTAR /DISH NETWORK 26.0% 1 100.0% 12.3%DIRECTV GROUP INC 24.8% 2 97.4% 10.4%TIME WARNER CABLE 16.9% 3 94.8% 12.5%LEAP WIRELESS INTL INC 16.8% 4 92.3% 21.6%METROPCS INC 13.8% 5 89.7% 27.4%DEUTSCHE TELEKOM/T‐MOBILE 13.6% 6 87.1% 4.2%CABLEVISION SYSTEMS CORP 12.6% 7 84.6% 9.5%RADIOSHACK CORP 11.0% 8 82.0% 0.1%AT&T INC 7.9% 9 79.4% 6.5%VERIZON COMMUNICATIONS INC 7.6% 10 76.9% 13.6%SPRINT NEXTEL CORP 5.9% 11 74.3% ‐5.6%WALT DISNEY CO 5.2% 12 71.7% 2.1%LIONS GATE ENTERTAINMENT 4.1% 13 69.2% 10.4%MOTOROLA INC 3.9% 14 66.6% ‐11.4%BEST BUY CO INC 3.9% 15 64.1% 8.0%COMCAST CORP 3.7% 16 61.5% 10.8%GENERAL ELECTRIC CO 3.3% 17 58.9% ‐4.0%TELEPHONE & DATA SYSTEMS INC 3.2% 18 56.4% 3.4%NEWS CORP 2.9% 19 53.8% 6.0%VONAGE HOLDINGS CORP 2.8% 20 51.2% 10.7%TOP TIER 71‐100 PERCENTILE IN ALLOCATIONMID TIER 31‐70 PERCENTILE
54Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthAppendix EGfK MRI Hispanic Data Notes• GfK MRI has measured Hispanics within its National Study (Survey of the American Consumer). • Since 2003, GfK MRI began translating all survey materials into Spanish and hiring bilingual interviewers to capture the Spanish dominant Hispanic. • Other enhancements to data sampling since then include:– Hispanic language capability sample balanced against Nielsen Language estimates– Additional Hispanic specific demographics (language capability outside the home, language capability inside the home, country of origin, foreign born, length of time in the U.S., additional Hispanic adults in the home, how well do you speak English)– Hispanic specific media (3 Magazines, 135+ Television Programs, 2 Cable stations, 3 Radio formats, 3 websites)– Hispanic specific segmentations (Geoscape Hispanicity, Hispanic Cohorts, Hispanic PersonicX)– Hispanic Networks/Programs available in NPM Fusion database
55Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthAppendix F: Leading Global Innovators• Apple’s a leading global innovator has become America’s most valuable company and most influential stock on the psychology of the investor market. • Apple’s iPhone noted as the “phone that changed phones forever”, was designated as the Top Invention in 2007 by Time magazine.• Apple’s Macbook Pro has consistently been one of the best selling laptops since its inception in 2006.• The iPad was named as the Top Gadget in 2010.
56Tech‐Telecom‐Entertainment Hispanic Allocation Impact on Revenue GrowthAppendix F: Leading Global Innovators• Samsung is a global leading tech innovator breaking repeated records of slimmer products such as LCD TVs & Blu Ray Disc Players, highest resolution cameras, and smartest cell phones such as the Galaxy, the first Droid in 2008.• Recognized in industry for best gadgets only behind Apple.– A global market leader Samsung took No. 1 spot in U.S. cellphone market in 2008.– Enjoys #1 market share position for TVs worldwide.