The document discusses the U.S. Hispanic market, which represented $800 billion in spending power in 2006 and is estimated to grow to $1.2 trillion by 2011. Hispanics strongly influence popular culture and require specialized marketing strategies due to differences in media consumption habits, acculturation levels, and attachment to their country of origin. Hispanics vary widely in language preference, cultural practices, and how connected they feel to their native country.

1. U.S. Hispanic Market Insights

2. As of 2006, the market represented a total spending power of almost $800 billion Spending power is estimated to grow to $1.2 trillion by 2011 Less media saturated More likely to ACT on marketing messages Must be addressed and engaged differently - require specialized strategies Hispanics strongly influence popular culture They are more brand-loyal Media-mix will be different due to different media consumption habits In 2004, 37% of non-Hispanic whites thought Latinos influenced everyone's lifestyle; now, it's 44% “ Reverse Acculturation” phenomenon The challenges are great, but the opportunities are vast. U.S. Hispanic Market - Relevance Sources: U.S. Census Bureau; Synovate U.S. Diversity Markets Report 2006; Selig Center's Multicultural Marketing Report 2006; Magazine Publishers Association, Hispanic Market Weekly : " A Hispanic Vote For Advertising, September 24, 2007

3. Overview - Macro Perspective Sources: U.S. Census Bureau; Synovate U.S. Diversity Markets Report 2006; Selig Center's Multicultural Marketing Report 2006; Magazine Publishers Association, Latin Force Group, LLC, American Marketscape DataStream, 2008 Series. U.S. Hispanic Market Overview - Macro Change in Population 2000 - 2006 In 1967 the U.S. population was 200 million, in 2007 it is over 300 million About 53% of the extra 100 million people are recent immigrants or their descendants U.S. population growth is around .894%/year, the world's highest among developed countries The U.S. Hispanic population grew over 3% between 2003 and 2004 Hispanics comprise the country's largest immigrant community In 5 years, the US Hispanic population has grown 24% Hispanics about 10 years younger than general market There are about 45 million Hispanics in the USA. Hispanics comprise about 15.5% of the US population They are estimated to grow to over 25% by 2050 Population trending away from rural areas Mean population center has moved West and South Growth due to immigration plus higher birthrate

4. Age The U.S. Hispanic population is substantially younger than the general population Income U.S. Hispanic income tends to be lower than general market income Education High-school education gap is close to general population, college isn't Country of Origin Attachment Native country influences food, music and other preferences, Affects where immigrants settle in the U.S. Consumer Spending Purchasing habits Acculturation & Language Hispanics vary widely with respect to language preference and other acculturation indicators Media Consumption Habits Attitudes Family, religion, politics and more U.S. Hispanic Market Overview - Population Growth & Characteristics Overview - Hispanic Market Overall Characteristics

5. Age U.S. Hispanic Market Population - Age Source: US Census Bureau, American Community Survey2005

6. Income U.S. Hispanic Market Population - Age Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series

7. U.S. Hispanic Market Population - Age Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series Income

8. U.S. Hispanic Market Population - Age Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series Income

9. U.S. Hispanic Market Population - Age Education As of 2006 86% of all U.S. adults 25 and older have at least a high school diploma 59.0% of Hispanics over 25 have a high school diploma or higher 33.4% of the general U.S. pop over 25 has an associate's degree or higher 16.0% of Hispanics have an associate's degree or higher 25.3% of the general population over 25 has a college degree or higher 10.7% of Hispanics over 25 have a college degree or higher Source: Annual Social and Economic Supplement to the Current Population Survey (CPS), U.S. Census, 2006

10. Most Hispanic immigrants maintain some kind of connection to their native country through "transnational activities," which are: sending remittances, traveling back, or telephoning relatives, but the extent of their attachment varies considerably. Of foreign-born Hispanics: 9% do all 3 of these 28% do none of these activities 63% engage in 1 or 2 of these activities There are significant differences by country of origin: Colombians and Dominicans maintain more active connections than Mexicans Cubans have the least contact Source: Pew Hispanic Center Attachment to Country of Origin U.S. Hispanic Market - Attachment to Country of Origin

11. U.S. Hispanic Market Population - Age Hispanic spending is substantial in all major categories Difference from General Market due in large part to their youth and large family size Top three categories for expenditures are: Shelter & Insurance Food & Beverage Transportation & Insurance Within the Food category, Hispanics over-index (spend more per household than the average multicultural household) in these categories: Fresh Vegetables Fish & Seafood Fresh Fruits Eggs Beef Natural foods Emphasize quality "Homemade" Consumer Spending Habits Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series

12. Attitudes U.S. Hispanic Market Population - Age Family Health/weight Gender Religion Success/achievement/future Pride in culture/heritage Country of origin Politics Education Collectivism "Destino" Discrimination Duality Money/waste Time Source: Pew Hispanic Center: National Survey of Latinos: Education, 2004 Source: Hispanic Marketing Insights Inspired by Latin American and U.S. Popular Literature," Holly McGavock, M.A., Felipe Korzenny, PH.D. at the Center for Hispanic Marketing Communication, Florida State University, 2007.

13. U.S. Hispanic Market Population - Age Americanizado English dominant (nearly no Spanish) Born in the USA Few Hispanic cultural practices Nuevo Latino English preferred (some Spanish) Born in the USA Some Hispanic cultural practices Often "retro-acculturated" Bicultural Bilingual (or nearly) Immigrated as child or young adult Many Hispanic cultural practices Hispano Spanish preferred (some English) Immigrated as an adult, in USA 10+ years Predominant Hispanic cultural practices Latinoamericano Spanish dominant (nearly no English) Recently immigrated as an adult Primarily Hispanic cultural practices Identify with home country more than USA Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series Acculturation - Language & Beyond

14. U.S. Hispanic Market Population - Age Americanizado English dominant (nearly no Spanish) Born in the USA Few Hispanic cultural practices Nuevo Latino English preferred (some Spanish) Born in the USA Some Hispanic cultural practices Often "retro-acculturated" Bicultural Bilingual (or nearly) Immigrated as child or young adult Many Hispanic cultural practices Hispano Spanish preferred (some English) Immigrated as an adult, in USA 10+ years Predominant Hispanic cultural practices Latinoamericano Spanish dominant (nearly no English) Recently immigrated as an adult Primarily Hispanic cultural practices Identify with home country more than USA Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series 69% Acculturation - Language & Beyond

15. U.S. Hispanic Market Population - Age Americanizado English dominant (nearly no Spanish) Born in the USA Few Hispanic cultural practices Nuevo Latino English preferred (some Spanish) Born in the USA Some Hispanic cultural practices Often "retro-acculturated" Bicultural Bilingual (or nearly) Immigrated as child or young adult Many Hispanic cultural practices Hispano Spanish preferred (some English) Immigrated as an adult, in USA 10+ years Predominant Hispanic cultural practices Latinoamericano Spanish dominant (nearly no English) Recently immigrated as an adult Primarily Hispanic cultural practices Identify with home country more than USA Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series 59% Acculturation - Language & Beyond

16. U.S. Hispanic Market Population - Age Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series Acculturation & Socioeconomic Status

17. U.S. Hispanic Market Population - Age Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series Acculturation & Socioeconomic Status

18. U.S. Hispanic Market Population - Age Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series Acculturation & Country of Origin

19. U.S. Hispanic Media Consumption & Attitudes U.S. Hispanic Market - Media Consumption Habits Roughly six in ten (59%) of Hispanics say they "enjoy looking at or listening to advertising," Compare that with 30 percent of non-Latino whites who feel this way But only 25% of those surveyed feel that today's marketing is personally and culturally relevant to their lives "Authenticity is required. The messages have to be real and relevant to the Hispanic consumer." Hispanics' need for preserving cultural elements has heightened in the past 4 years: In 2003, 48% of Hispanics surveyed said it is important to preserve music and songs In the 2007 study, it was 62% With food and beverage: 36% of Latinos in 2003 said was important to preserve traditions This year it was 61% Language is important - but relevance and content are as or more important. Key is CHOICE. Source: Hispanic Market Weekly, "A Hispanic Vote For Advertising," September 24, 2007

20. U.S. Hispanic Media Consumption - TV U.S. Hispanic Market - Media Consumption Habits 26 million Hispanics watch television in an average week Broadcast television dominates Hispanic viewership (note lower cable service penetration) Roughly 71% of Hispanics' television time is spent watching broadcast networks (vs. 58% of non-Hispanic males and 62% of non-Hispanic females' Hispanics are equally likely to have satellite service – 25% vs. 24% of non-Hispanics Spending on Cable TV to target Hispanics is growing faster than spending on network TV Telenovelas don’t completely dominate Hispanics viewing preferences! 68% of those surveyed indicate they watch news programs and political talk shows 43% percent say they watch telenovelas Game shows are the least popular format, only 11% 55% of U.S. Hispanics watch television in both English and Spanish 12% watch only in English 31% exclusively in Spanish 57% of the U.S. Hispanics born in other countries watch television in English While almost 75% of those born in the U.S. watch Spanish-language television Sources: Hispanic Market Weekly: "What They're Watching," July 03, 2006; Hispanic Market Weekly, "Kagan Forecasts Great Growth For Hispanic Radio, TV" February 26, 2007; Hispanic Market Weekly: "Latinos Have Different Viewing Habits," June 26, 2006

21. U.S. Hispanic Media Consumption - Magazines U.S. Hispanic Market - Media Consumption Habits Hispanics read magazines on par with (sometimes more than) the general population: 85% of Hispanics read magazines 47% trust the information in magazines 43% trust magazine advertising 73% say magazine ads give them idea about what to buy Hispanic consumers view magazines as credible sources of information They are more likely to act on advertising that appears in magazines than the overall population They perceive magazines as inspirational and "aspirational" View advertising in magazines as "part of the reading experience" They read about 8.5 issues per month, similar to the U.S. average The most avid Hispanic magazine readers are Spanish dominant Hispanics are more likely to consider ads as a seamless part of the magazine Less chance of saturation Engagement Sources: Magazine: Magazine Publishers Association "Hispanic/Latino Profile" 2006; Hispanic Market Weekly "Magazines Score With Hispanics," September 18, 2006; Northwestern Reader Research Study, 2004.

22. U.S. Hispanic Media Consumption - Newspapers U.S. Hispanic Market - Media Consumption Habits Hispanics read newspapers more faithfully than the general population Most read in Spanish (only 20% are "heavy" or "somewhat heavy" general market paper readers) Spanish-language newspapers have an average of 2.9 readers per copy (vs. 1.9 to 2.1) Nearly every major Hispanic newspaper posts circulation growth Less chance of saturation The nearly 20 million Hispanic newspaper readers in the U.S. aren't going anywhere: Hispanic readers don't abandon their Spanish papers for English versions as they become acculturated Content involving family/lifestyle information, local community news and store ads are especially important to the Hispanic market Sources: Associated Press, August 26, 2006; NAHP; Newspapers Association of America, Hispanic Press, NAHP, Dirks, Van Essen & Murray; TNS Market Development/ Hoy , NAHP; 2007 Newspaper Association of America " The Unique Audience of Hispanic Newspapers," NAA 2007 Markieting Conference, Las Vegas, prepared by Alloy Media + Marketing.

23. U.S. Hispanic Media Consumption - Radio U.S. Hispanic Market - Media Consumption Habits Some research shows that radio content and ads are more trusted by and have a greater emotional connection with Hispanics than with general market listeners A 2006 RAEL (Radio Ad Effectiveness Lab) study found that: 32% Spanish-language radio listeners believe radio ads are fun (32%) 15% of non-Hispanics believe they are fun 33% believe ads are honest 13% of non-Hispanics believe they are honest Why? There is less "fatigue" from marketing messages among the Hispanic market Radio tends to be a good source of relevant information Source: Hispanic Market Weekly: "A Stronger Connection, Receptivity To Radio Ads," October 09, 2006.

24. U.S. Hispanic Market - Media Consumption - Internet 55% to 56% of US Hispanics have access to or use the internet (71% of general Market) Between April 2005 and April 2006, over 1.6 million Hispanics came online for the first time Just 1 in 3 Spanish-dominant Hispanics go online BUT they also represent the most growth Online Hispanics are an “upscale mass market” 56% are college educated 21% are Spanish dominant 27% bilingual 52% English dominant English or Spanish? Strategies - portals Content Engagement Relevance Predictors of usage Sources: Synovate 2006 US Diversity Markets Report, Pew Hispanic Center, Internet Study March, 2007; comScore Media Metrix Study, April 2006; Hispanic Market Weekly "Online Activity Lags For U.S. Latinos" March 19, 2007 Source: ComScore Media Metrix U.S. Hispanic Media Consumption - Internet Hispanic Online Growth by Language April 05-April 06

25. U.S. Hispanic Market - Media Consumption - Internet Source: Jupiter Research "Marketing to U.S. Hispanics Online - Tapping Into A Young, High-Speed Audience." 2005 U.S. Hispanic Media Consumption - Internet

26. U.S. Hispanic Market - Media Consumption - Internet Source: Jupiter Research "Marketing to U.S. Hispanics Online - Tapping Into A Young, High-Speed Audience." 2005 U.S. Hispanic Media Consumption - Internet

27. U.S. Hispanic Market - Media Consumption - Internet Source: AOL 2006 Hispanic Cyberstudy U.S. Hispanic Media Consumption - Internet Hispanics who use the internet are increasingly relying on it to make purchasing decisions

28. U.S. Hispanic Market - Media Consumption - Internet U.S. Hispanic Media Consumption - Internet Source: AOL 2006 Hispanic Cyberstudy Overall, Hispanics tend to use the Internet in English. But this may be less a function of preference and more one of content availability. Many sites simply are not available in Spanish.

29. U.S. Hispanic Market - Media Consumption - Internet U.S. Hispanic Media Consumption - Internet Highest internet penetration levels: Miami San Antonio New York Lowest internet penetration levels: Pheonix Dallas Los Angeles and San Francisco However, note absolute numbers: Los Angeles - 50% of 4.6 million is a lot of Hispanics online! Why relevant? Identify the market Identify media usage/preferences Adapt the message to the media Source: AOL 2006 Hispanic Cyberstudy

30. Regional & State Perspective Sources: U.S. Census Bureau; Synovate U.S. Diversity Markets Report 2006; Selig Center's Multicultural Marketing Report 2006; Magazine Publishers Association, Latin Force Group, LLC, American Marketscape DataStream, 2008 Series. U.S. Hispanic Market Overview - Regional & State Hispanics are concentrated in certain areas of the country - but growth is almost everywhere California and Texas are the most populous states in the country 49% of US Hispanics live in California (13.1 million) or Texas (8.4 million) New Mexico has the highest proportion of Hispanics (43% of its population) The Hispanic population of Los Angeles County is over 4.6 million Most U.S. Hispanics are of Mexican descent - about 70% Most U.S. Hispanics of Mexican heritage are concentrated in West and Southwest Non-Hispanic whites are a minority in 315 counties, including some of the largest (LA, Chicago) Non-Hispanic whites are a minority in California, Texas, New Mexico, Hawaii and DC While the majority of Hispanics are concentrated in California, Texas, New York, Florida and Illinois, the fastest growing areas for Hispanic population are: Charlotte, Atlanta, Raleigh-Durham, Indianapolis, Orlando, Portland (OR), and Minneapolis.

31. Regional & State Perspective U.S. Hispanic Market Overview - Regional & State States with Greatest Population Growth

32. Top 25 States - Sorted by Number of Hispanics U.S. Hispanic Market Population - Top 25 States California Texas Florida New York Arizona Illinois New Jersey Colorado Source: Latin Force American Marketscape DataStream, 2008 Series

33. Top 25 DMAs - Sorted by Overall Size U.S. Hispanic Market Population - Age Source: Latin Force American Marketscape DataStream, 2008 Series

34. U.S. Hispanic Market Population - Age Source: Latin Force Group, LLC, American Marketscape DataStream, 2008 Series Acculturation in Top 5 DMAs

35. Are you seeking employing Hispanic talent in key decision making roles? Are you buying from Hispanic businesses? Do you give back to the Hispanic community and support Hispanic-friendly public policy? Does your company mirror the demographics of the consumer base with the employee population? Do you ensure wage and benefits equity with the overall employee population? Do you track and monitor promotion and attrition rates of Hispanics? Do you invest in programs that address issues of concern to the Hispanic community? Do you set standards and monitor Hispanic employment practices of vendors? Does the company track vendor expenditures to Hispanic demographic groups? Can you award more contracts to Hispanic vendors? Does the company develop Hispanic vendor capacity by providing access to capital, assistance, and opportunities? Will you target and develop at least one Hispanic vendor into their top ten-vendor list? Source: Hispanic Association of Corporate Responsibility U.S. Hispanic Market Population - Corporate Commitment Committing to the Hispanic Market - From the Inside Out

36. U.S. Hispanic Market - Food Preferences Case Studies - Pizza Patr ón Mission/message : " Committed to serving Hispanic core customers" Product : Inexpensive Pizza Placement : Predominantly Hispanic communities Promotions : From "A Good Deal" to "Más Pizza, Menos Dinero" "Buy pizzas with pesos" and "Bienvenido Paisano" El Patrón (the Boss) - a fedora-topped, mustached man Franchise look and feel: shed references to Italy, Spanish/bilingual staff, advertising and marketing Price : Inexpensive ($4.99) Result : growth in sales, but also backlash Source: brandchannel.com, Alycia de Mesa, August 6, 2007

37. U.S. Hispanic Market - Food Preferences Source: Advertising Age, January 8th, 2007; Google Video Case Studies Mission/message : "For your Future" Product : Hybrid vehicle Promotions/methodology : TV Ads Superbowl placement (25% of Hispanics over 18 watch) Address relevant issues: Family, education, future, language Notice no mention of specific numbers - mileage, horsepower Emotional appeal Result: Camry registrations grew 32% among Hispanics

38. U.S. Hispanic Market - Food Preferences Case Studies - Republican National Campaign, 2004 Purpose: Raise support for Republican party among "Latinos" Messages/touchstones/tactics : History Pride in culture/heritage Family - "Comes first, helps one another" Values - "Strong, conservative values" Religion Economic success Work ethic Education Interviews Result: According to the National Elections Pool (NEP) exit poll, President Bush garnered 44 percent of the Hispanic vote (Kenski and Kenski 2005). In 2000, Bush won 31 percent (Connelly 2004). Source: brandchannel.com, Alycia de Mesa, August 6, 2007

39. U.S. Hispanic Market - Food Preferences Case Studies NFL: Sought to increase interest among Hispanics Placement : Telemundo game coverage, 2006 game in Mexico City Promotions : Spanish sportscasting by Alvaro Martin 24 Hispanic players on roster in 2006 Fantasy Football in Spanish (can choose) Madden NFL video game being released in a bilingual edition NFLatino.com launched in 2006 - includes areas geared toward beginners, Hispanic player diaries and interactive polls Result : 2006 Mexico City game, first ever outside USA, drew league's LARGEST CROWD for any game.

40. U.S. Hispanic Market - Food Preferences Product : Subcompact, appeal to stylish creative spirit Promotions : MundoYaris.com - mix music, create ring tones online Yaris Design Lab - make films, music and art Language - CHOOSE Made relevant - mobile content, music, language Alternative career fair Win an Ozomatli performance at home TV, Print, Radio in English-language outlets (SíTV, Urban Latino Magazine) Links to Mun2, Yahoo Film Festival, chat rooms, blogs, showroom Result : From unknown to 30% share of entry-level subcompact segment in Hispanic market. Case Studies Toyota Yaris - Target Nuevo Latino, "young Latino trendsetters leading the way in a new, multicultural world"

41. U.S. Hispanic Market - Food Preferences Summary There really is no "Hispanic Market" Hispanic Market is not a monolithic bloc Like the general market, it is a collection of several sub-segments Big differentiators are age, income, education, attitudes… Most can be captured by "Acculturation" level Then layer with additional knowledge: country of origin, tastes, consumer habits Strategy is: Don't try to speak to the entire market with one message, in one language When marketing, find the right media vehicles then develop the right message Don't rely on rational appeals in marketing, an emotional appeal is likely to be more successful Examine how your company internally reflects its commitment to the Hispanic market Stick to it. There's no where to go but up.