AHAA Reports on Ad Spending Patterns
- by May 7, 2002
The study, entitled “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% of their overall advertising budgets. Corporations in the study that received the top scores are approaching or exceeding the recommended target of 8% of overall advertising budget. Key highlights of the report include: rankings of corporate spending; spending trends by industry; and corporate spending trends over time.
"This study reveals that corporations who are serious about reaching Hispanic consumers must do more," said Horacio Gomes, president Association of Hispanic Advertising Agencies. "As the true experts in Hispanic marketing, AHAA agencies are committed to helping corporations reap vast rewards by reaching the Hispanic market. We have learned through countless examples that both spending and the right communications strategy have to be in place in order to have a successful Hispanic campaign."
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.
Using SRC 2002 data tracking Hispanic adults' language-preference, and media consumption, Santiago & Valdés 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 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 & Valdés 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."
This report, which can be viewed at the organization's website (www.ahaa.org), also marked the start of AHAA's Branding Campaign -- a strategic effort to promote the overall strength of the Hispanic advertising industry to help corporations seize a share of the Hispanic market's collective buying power of more than $630 billion.
The conference, also included several interactive and informative sessions. Seth Godin, best-selling author, spoke to the audience about change and how the laws of Darwinism apply to the fast paced business of advertising. Godin explained to the audience that agencies either need to evolve or become extinct.
During Friday's Luncheon, the Honorable Al Gonzales, counsel to the President and the highest ranking Hispanic in the Bush administration, spoke to over 300 attendees about how the country is changing.
On Saturday, Horacio Gomes' tenure as president of AHAA ended and Ingrid Otero-Smart became AHAA's new president for 2002-2003. In her inaugural speech as president of AHAA, Otero-Smart said, "We need to help corporate America understand the vast rewards that come when reaching the Hispanic market. Our members must help corporations understand the market so they can build their profits and grow their future to epidemic proportions."
