At a time when corporations are looking for new marketing opportunities and only hoping to grow sales in mature industries, many companies are missing a major opportunity when it comes to reaching Hispanic consumers, reports a new study released today by the Association of Hispanic Advertising Agencies (AHAA). The study reveals that the majority of America's top advertisers are significantly underinvesting in their efforts to reach Hispanic consumers. 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.
O. Burtch Drake, president/CEO of the American Association of Advertising Agencies, kicked off the 84th annual AAAA Management Conference in Laguna Niguel, CA yesterday, with a speech dedicated to the conference theme, "Looking Forward." After Sept. 11 and the recession, which made 2001 a tumultuous year for the industry, looking forward is "a most fitting motif for the mood of our industry, and indeed of our nation," Drake said. "Our business will continue to grow and prosper, and it's time to look forward." In his speech, Drake looked forward to the initiatives the AAAA has laid out for this year. The Management Services Division will continue its personal visit program, which was doubled last year when the division made visits to 180 agencies to assist them with management and finance issues. The Division has developed one-day seminars on finance and human resources to assist members coping with the recession. Meetings are scheduled for Los Angeles in May and New York in June. In Washington, the AAAA is working on legal issues that affect advertising. The AAAA has hired a new lobbying firm with strong ties to the Republican Party, which controls the White House and the House of Representatives. "They will provide us with considerable assistance as we gear up to handle several particularly significant hot button issues, including the advertising of prescription drugs, the deductibility of advertising as a business expense, tax threats in several states and pressure on the right to advertise certain legal but controversial products," Drake said. In New York, the AAAA is developing AAAA University, a professional Internet based training program that will roll out later this fall. The AAAA is also developing the Industry Standard Commercial Identifier, a coding system that will be used to track TV commercials. ISCI will enable ad units to be trafficked digitally and linked to databases, which will simplify the buying, selling and billing process. The AAAA is also moving ahead with electronic data interchange. The AAAA is also at work on a Value of Advertising initiative, which conducts studies to demonstrate the financial value of advertising, including one on the value of advertising in a recession, which is especially relevant now.