Two-thirds of Major Advertisers Missing Opportunities
The study, “Missed Opportunities: Vast Corporate Underinvesting in the US Hispanic Market,” indicates that in the past three years nearly two-thirds (64%) of top companies targeting Hispanic consumers have invested less than 3.2 percent of their overall advertising budgets. Corporations in the study that received the top scores are approaching or exceeding the recommended target of eight percent of overall advertising budget.
"This study reveals that corporations who are serious about reaching Hispanic consumers must do more," said Horacio Gomes, president Association of Hispanic Advertising Agencies. "
According to AHAA, while Hispanics represent about 13.6% of the U.S. population, in aggregate America's leading advertisers are allocating an average of 2.4% of their measured media advertising resources targeting Hispanics in the past three years.
The study also found that relative to their overall advertising resources, on average, food and beverage products, food services, personal care, general merchandise, insurance and telecommunications companies have invested the most in marketing to Hispanics while computers makers, software, travel/entertainment, pharmaceuticals, the U.S. government, auto makers, securities and specialty retailers have invested the least.
The good news is that with heightened awareness on the value of the U.S. Hispanic market, since 1999 leading advertisers have almost doubled their allocation of advertising resources to Hispanics from 1.8%t of total advertising dollars in 1999 to 3.2% in 2001.
And, by 2001, the number of leading advertisers still grossly underinvesting relative to the threshold needed to be effective in reaching the Hispanic market had dropped to 42%.
Still, "the low scores in this study demonstrate that companies are not placing proper value on the opportunities the Hispanic market offers," said Carlos Santiago, co-chair, Santiago & Valdes Solutions, strategic market consultants who conducted the research. "Shareholders should be concerned with corporate America's inertia in seeking out Hispanic consumers. The companies with the best understanding of the Hispanic market's contribution to profitable revenue growth will be in the best position to thrive over the long-term."
Using SRC 2002 data tracking Hispanic adults' language-preference, and media consumption, Santiago & Valdes Solutions determined that for optimum effectiveness in reaching the Hispanic market, advertisers should devote at least 8% of their advertising dollars to Hispanic advertising and marketing. Results in this report were obtained by comparing the percentage of measured media spending on Hispanic Spanish and bi-lingual advertising and comparing this to the 8% optimum spending ratio.
The study was revealed during AHAA's 12th semi-annual conference, where AHAA unveiled a provocative advertising campaign targeting senior corporate executives that will soon be running in major business publications. The creative is designed to underscore the main theme that if corporations don't have a strategy for reaching Hispanic consumers, they don't have a future.