October 12, 2011. Hispanic Market Weekly
Hispanic Ad Dollars = Increased Revenue.- Dollars invested in targeting Hispanic consumers through Latino media directly impact company’s bottom line, according to the findings of the Association of Hispanic Advertising’s (AHAA) latest Hispanic Allocation Study.
Consistent ad allocations greater than 14.2 percent explain about half of the best-in- class companies’ revenue growth rate. The AHAA study found that a Best-In-Class company allocating one quarter of its ad spend to Hispanic media over five years, would generate annual revenue growth of 6.7 percent.
Among the best-in-class group, companies with a strong correlation between allocation and revenue growth are: AFC Enterprises (Popeyes Chicken, Church’s Chicken, Cinnabon), Allstate, AutoZone, Colgate-Palmolive, Collective Brands (Payless Shoesource), DirecTV, Domino’s Pizza, Echostar Communications, Heineken, JC Penney, Rent-A-Center, SAB Miller, State Farm and Vivendi.
The report also shows strong recovery in Hispanic ad spending across the top 500 advertisers, reversing a two-year slowdown, increasing the aggregate Hispanic ad spend by 14 percent over 2009 levels to $4.3 billion in Latino media.
“Companies now understand that the Hispanic market is not going to simply assimilate and go away, which means that a targeted approach will deliver long-term benefits,” says Roberto Orci, AHAA president and CEO of Acento Advertising. “This research underscores that company’s can’t just pop in- and-out of the Hispanic market as a fad. Companies must get on the train or risk being left behind and becoming irrelevant.”
Coming on the heels of the recession, Hispanic media spend by the Top 500 advertisers stood $163 million below its peak in 2007, indicating a strong recovery. However, unlike the non-Latino market which saw budgets slashed during the 2008 recession, the Hispanic advertising industry has remained constant at five to six percent of total advertising budgets, from 2006 to 2010.
In 2010, the Top 500 invested $500 million in Hispanic media, increasing their investment by 14 percent versus 2009.