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THE WALL STREET JOURNAL
Hispanic Marketers Try To Push Ad Spending Aimed At Latinos
By EDUARDO PORTER
April 24, 2001
In the next couple of weeks, a nine-minute promotional videotape from Univision Communications will arrive in the office of August A. Busch III, president of beer maker Anheuser-Busch . But the tape isn't a sample of the programs showing on the Spanish-language TV network. Rather, it contains a clip from ABC's "Nightline" about the booming growth of the Hispanic community detailed in the 2000 census.
"It's almost as if our industry hired the Census Bureau to do our public relations," says Tom McGarrity, Univision's president of network sales. "Companies can't overlook the Hispanic market now. They can either consciously ignore it and justify their decision to do so, or they must design a plan to address it." Univision is sending the "Nightline" tape to the CEOs of the 500 biggest advertisers in the U.S., from Ace Hardware to Zale.
Meanwhile, Spanish-language magazine People en Español is packaging the census numbers to show how Latinos in the U.S. constitute the fifth-largest Hispanic population group in the world, just behind Argentina. And they should be the second-biggest group -- behind only Mexico -- by 2025.
After the Census Bureau in early March revealed there were three million more Hispanics in the U.S. than the 32 million it had previously estimated, "we sent an e-mail to every client we had," says Warren Harmel, managing partner of Dieste & Partners Publicidad, a Dallas agency. Mr. Harmel's presentations to prospective clients now include the nugget that the Hispanic population grows by 2.5 people every minute.
"This is a wake-up call for corporate America," adds Daisy Exposito, the president of the Bravo Group, a New York-based Latino advertising agency owned by Britain's WPP Group . For those who don't get it, the Association of Hispanic Advertising Agencies is preparing to provide a little nudge. The 150-member trade group plans to publish a "report card" of the biggest U.S. advertisers, comparing their Hispanic marketing budgets with what they spend in the general market.
Even before the new figures came out, ad spending aimed at Latinos was growing briskly. Univision and smaller rival Telemundo Networks saw their combined ad revenue soar 22% last year to $1.7 billion, according to CMR, a New York research company owned by Taylor Nelson Sofres. That far outpaced the 12.2% growth, to $41 billion, in total advertising on broadcast TV last year, as estimated by the Television Bureau of Advertising.
Some companies, including Anheuser-Busch and Procter & Gamble , have long advertised to Hispanics. Others began just ahead of the release of the census results. In December, for instance, Hershey Foods hired Dieste to prepare a Latino campaign. Early this year, CEC Entertainment 's Chuck E. Cheese restaurant chain started running a bilingual ad, in English and Spanish, on the children's cable network Nickelodeon.
Nonetheless, many Hispanics believe corporations advertise to Latinos much less than their market clout warrants. Hispanics account for 13% of the population and 8% of total consumer spending, with about $560 billion in annual buying power, according to Santiago & Valdes Solutions, a consulting firm based in Newport Beach, Calif. But corporations spend only about 2% of their ad budgets on Spanish-language marketing.
One reason for the disparity is that many companies aren't convinced they need advertising directed specifically at Hispanics. Advertising in Spanish is unnecessary, they say, because many Latinos are bilingual and frequently prefer to communicate in English. In fact, almost 70% of the television programming that U.S. Hispanics watch is in English, says Nielsen Media Research. Once the language barrier is removed, the thinking goes, Latinos should respond to advertisements just as non-Hispanics do.
Frost Bank is among the skeptics. Latinos, mainly of Mexican origin, account for 59% of the population of the bank's home base of San Antonio. Yet Frost's ads, punctuated by the slogan "We're From Here," are about being Texan, regardless of ethnicity. One of its TV spots thus features a little boy in a cornfield. He promises that when he grows up he will eat his chicken-fried steak and "remember the Alamo," the San Antonio garrison attacked by the Mexican army in 1836.
Frost Bank "kind of misses the market a little bit," says Adolfo Aguilar, president of Creative Civilization, a San Antonio advertising agency that for the past three years has unsuccessfully tried to sell the company on a Hispanic campaign. But Frost's chief executive, Dick Evans, says his ads, produced by an Austin, Texas, ad firm called McGarrah/Jessee, do well throughout southern Texas. "We have a tremendous following from Hispanics," he says.