Despite U.S. Slowdown, Some Growth
--> The 2002 elections will send more Hispanics to Congress than ever before. A total of 22 Hispanic legislators will serve in the 108th Congress, thanks in part to a large turnout of Hispanic voters. Newcomers to the Capitol include Linda Sanchez of California, sister of Congresswoman Loretta Sanchez; Mario Diaz-Balart of Florida, brother to Congressman Lincoln Diaz-Balart; and Raul Grijalva of Arizona. All incumbent Hispanic members won their districts. In addition, Bill Richardson of New Mexico now claims the distinction of being the only Hispanic governor in the 50 states.
But the election that brought gains to the Hispanic electorate may not pan out for the business constituency. On the day following the election, the Federal Reserve dropped interest rates a significant half-point; the official rate now stands at 1.25 percent, a 40-year low. The move marks the first Fed intervention of 2002, a sign that state bankers believe the languid economic recovery needs help. On the same day, capital markets reacted with a slight uptick, spurred by defense and pharmaceutical stocks – two sectors likely to benefit from an all-Republican government.
Business planners looking to chart a course for 2003 should not count on strong macro-economic growth – unless they sell to the Hispanic market. According to new estimates in this issue, Hispanic purchasing power grew 8.1 percent last year to reach $540 billion (see "Media Markets Report"). Conventional wisdom holds that consumer spending has provided the main economic good news during the last 20 months, and that goes double for the Hispanic segment of the U.S. consumer market.
To reach that Hispanic consumer, corporations spent $2.4 billion last year, with television accounting for 62.1 percent of the total. Our Media Markets Report shows that the top 25 advertising agencies in the Hispanic market reported combined 2002 billings of $2 billion. Also, Internet advertising on the five largest sites grew a solid 8.3 percent last year. Together, these statistics paint a picture of an affluent, dynamic consumer segment that is rapidly adopting technology and is reachable via mass media. The media serving this community, however, exhibit a high degree of concentration both from buyers (agencies) and sellers (television networks).
And next year, it will only grow more concentrated and controlled, given that the proposed merger between TV leader Univision and radio giant Hispanic Broadcasting Corp. now seems inevitable (see "Still Percolating" in this issue). With high-profile gains in political clout and purchasing power, Hispanics are in a position to expect more media options and consumer products tailored to their tastes in 2003 – despite any glum national forecasts.
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