News Column

Spending Spree

December 2001

While overall growth in the Hispanic ad market has slowed, expenditures by large companies continue apace.

VIEW Top 60 Advertisers in the Hispanic Market, 2001

Following years of double-digit growth, ad spending in the Hispanic market softened somewhat this year. Hispanic advertising expenditures are expected to grow an anemic 4 percent after increasing 13 percent last year, 11 percent in 1999, and an impressive 21 percent in 1998.

Nevertheless, the market’s biggest spenders continue to invest substantial sums in Hispanic advertising. Procter & Gamble is again the market’s top spender, shelling out a projected $55 million to reach Hispanic consumers this year, up from $46.2 million in 2000. Ford increased its Hispanic ad spending more than threefold, to a projected $51 million compared with $14.03 million last year.

“The nation’s largest and most influential companies are clearly very interested in attracting Hispanic consumers, and it shows in the data,” says Frank Chow, chief economist of HispanTelligence, the research division of Hispanic Business Inc.

All told, Hispanic advertising expenditures are expected to reach $2.22 billion this year, up from $2.13 billion last year. Spending is up in every medium, though particularly in television. Network/national TV expenditures are projected to hit $845 million, up almost 6 percent from last year’s total of $800.8 million, while those in local TV will hit $461.25 million, up from $450.6 million in 2000.

Elsewhere, Hispanic advertising expenditures are projected to reach $159 million in national radio (compared with $156.7 million last year), $410.75 million in local radio (versus $401 million last year), $86.14 million in national newspapers (compared with $79.48 million last year), $129.21 million in local newspapers (up from $119.2 million last year), $60 million in magazines (compared to $55 million last year), and $69.11 million in the out-of-home category (compared to $67.1 million last year).

This year’s list of the top Hispanic DMAs remains unchanged from last year’s, with Los Angeles once again leading the way, followed in descending order by Miami/Ft. Lauderdale, New York, Houston, and Chicago.

Comparing this year’s index of the top advertisers to last year’s is somewhat problematic in that the list has been expanded from 50 to 60. Nevertheless, some trends are clearly discernible, particularly among the top 10. Eight of the 10 are spending more this year than last, while Philip Morris and McDonald’s are holding expenditures steady. General Motors is expected to nearly double its Hispanic ad expenditures, from $16.2 million in 2000 to $29.5 million this year.

Looking ahead, most agencies expect to see more of the same next year, pessimistic economic forecasts or no.

“There is not one person in marketing who is not concerned about where the economy is headed in the wake of the terrorist attacks. That said, I expect to see a very good year next year. Corporate America is still behind the curve in terms of spending in the Hispanic community,” says Alex López Negrete, president and CEO of Houston-based Lopez Negrete.

In the current economy, the effectiveness of Hispanic media – owing in part to the lower rates that media outlets have complained about for years – garners serious attention from marketing executives, according to Ana Maria Fernandez-Haar, CEO of IAC Group. “When you do a deliberate analysis, you find the Hispanic market continues to be under-funded. So in times like these, our market gets a better hearing,” says Ms. Fernandez-Haar.

“We’re looking at solid gains from all our clients next year,” echoes Hector J. Orcí, co-chairman of Los Angeles–based La Agencia de Orcí & Asociados, whose accounts include Verizon, Shell Oil, and Washington Mutual Bank. He predicts continued growth in all media, though he’s especially keen on the prospects for TV and radio outlets.

In a strong show of confidence in the potential of ethnic media and marketing generally, the media operations of San Antonio–based Bromley Communications and Chicago-based Starcom Hispanic have merged to form Tapestry. The venture, which also includes non-equity partners Admerasia and Unity Media, is being billed as the nation’s first multicultural media communications company and the largest media agency serving the Hispanic, African-American, and Asian-American markets.

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