The Dark Side of Cutting Hispanic Media Allocation [INSIGHT/REPORT]
February 3, 2016
Since we have already written at length about the “Bright Side” of the connection between increased Hispanic dedicated media allocation, defined as advertising buys in any Hispanic-dedicated media channel regardless of language whether Spanish, Bilingual or English, and its impact on overall sales growth, we wanted to shed some light around the “Darker Side of the force”…the less talked about impact of slashing Hispanic allocations. Indeed, AHAA studies based on Nielsen Monitor Plus adSpend data coupled with company financials from their 10-K reports, have documented that brand owners who increase their Hispanic dedicated media allocation generate a lift in overall (Total Market) revenue growth rates. Or in more direct words, marketers that shift a share of their total AdSpend allocation from English media (Non-Hispanic-centric) to Hispanic dedicated media create a competitive advantage, a Total Market boost that is measurable as accelerated growth rate.
But, the inverse is also true and equally proven by the analysis SSG has performed for AHAA. As Obi-Wan Kenobi said, “It takes strength to resist the dark side. Only the weak embrace it.” Here is why…
Companies cutting Hispanic dedicated media allocation, while increasing allocation to English media, tend to suffer a reduction in their sales growth. In fact, the magnitude of the resulting slow-down can wipe out the average growth of the category as is the case in the Consumer Packaged Goods & Retail category (Read CPG Case Study below).
The Cost of the Dark Side.
Across three major categories: CPG-Retail, Auto and Financial-Insurance Services, AHAA’s study demonstrated that a five point cutback in Hispanic media allocation yields a reduction in Total Market revenue growth rate of minus 1.8% per year. It is clear that there are numerous drivers to revenue growth, such as category macro trends, product innovation, pricing, channel, experience, distribution, positioning, and reputation among many others. Despite all these drivers, direct targeting through Hispanic Media Allocation accounted for 18% of companies’ variation in revenue growth. This figure jumps to 28% amongst CPG-Retailers –clearly a major driver of corporate financial performance
To download report CLICK HERE.
