Hispanic Market Advertising Grows 4.7% In 2004 … 2005 ?

The Association of Hispanic Advertising Agencies (AHAA) announced that Hispanic television and print advertising spending in 2004 grew 4.7 percent from 2003. The findings were the result of the 2004 Hispanic Media Spend study commissioned by AHAA’s Hispanic Advertising Agencies Foundation, Inc. (HAAF) with data from TNS Media Intelligence and Market Development.

The 4.7 percent increase in Hispanic spending contrasts to the overall growth in total television and print media spending which increased 10.5 percent from 2003. Despite this growth in Hispanic media spend, one-third of the top 250 national advertisers still do not appear among the top 250 Hispanic advertisers. While some marketers, such as Sears, McDonalds, Procter & Gamble, and Johnson & Johnson recognize the brand loyalty associated with reaching out to U.S. Hispanic consumers; others may be ignoring the trends.

“Our new study confirms what AHAA agencies have known for years,” says HAAF Chair Carl Kravetz. “Hispanic marketing is flourishing. Yet still more than 100 of the top 250 television and print advertisers are allocating less than one percent of their total budgets in these media to reaching the influential U.S. Hispanic consumer. Some of America’s most iconic brands — like Apple, Maytag and Nike — are missing in action. Others are doing the barest minimum: Mattel, for example, showed 0.1% spending in the Hispanic market in 2004 according to study findings. Considering that nearly a quarter of all children in America are Latino,(1) it just doesn’t make good business sense.”

The 2004 Hispanic Media Spend study reviewed total measured television and print ad spending among the top 500 national advertisers ranked by spending in those categories. A key metric for the analysis, Hispanic Media Share, divides the dollars spent with Hispanic media by the total television and print spend (Hispanic and general market).

Results are designed to guide marketers in aligning media spending, in particular their Hispanic Media Share, within the context of a dynamic and growing environment. U.S. Hispanic population growth is outpacing overall growth in every age demographic,(2) and yet many industry sectors, including technology, pharmaceuticals and travel and entertainment according to study results, aren’t keeping pace. Rather than increasing Hispanic market spending accordingly, whole categories as well as recognized brands such as Hallmark, Bose, Philips, among others lag far behind.

In 2004, Hispanic buying power reached $686 billion and is estimated to rise to $992 billion by 2009 representing 9% of the total U.S. buying power.(3) Over the 17-year period (1990-2007) U.S. Hispanic buying power will escalate at a compound annual rate of 8.7 percent compared to non-Hispanic growth rate of 4.8 percent.

“The continued growth in Hispanic media spend is encouraging,” says Loretta H. Adams, founder and president of TNS Market Development, the multicultural arm of TNS. “However, the stronger growth in general market media spend suggests that U.S. marketers have not yet aligned their Hispanic Media Share with the fact that over one American adult in ten speaks Spanish
at home.(4) This provides marketers with a significant opportunity to further support their brands,” Adams concluded.

AHAA first commissioned analyses of targeted advertising spending levels in 2002, and since its foundation in 1996 the association has developed strategies to foster the relationship between U.S. Hispanic consumers and corporate America. “We want corporate marketers to trust the data, invest in the whole Hispanic consumer — regardless of language spoken — and consult AHAA agency advertising experts to deliver profitable returns on their investments,” Kravetz says.

The 2005 Hispanic Market advertising growth rate is also in single digit range and could be lower than the 2004 growth rate, according to industry experts. Final tabulations are pending, but current TNS projections released for the first six months of 2005 reflect single digit performance versus the double digit forecast at the beginning of the year. The Hispanic Market has been subject to the same economic and political shortcoming that have plagued the general market in recent times rather consistently over the last two years.

(1) 22 percent of all children in America are Hispanic and Hispanics are leading the way in the number of births in the U.S. — one in five babies born. (Source: Hispanic Market Weekly)
(2) U.S. Census Bureau
(3) Selig Center for Economic Growth, 2004
(4) U.S. Census 2003 American Community Survey. Base is 5 years and older.