Scoring in Spanish language media…or not
A careful look at how companies are spending to target Hispanics through Spanish language media (SLM) reveals some pretty interesting things.
First, many of the biggest advertisers are completely ignoring the Spanish dominant Hispanic markets altogether. (For more detail on the characteristics of the Hispanic market, and discussion on English versus Spanish language media [“SLM”] strategies, see the Cheskin-published blogs of Steven Palacios or Felipe Korzenny, for example, or Nielsen Media, HispanicBusiness.com, Advertising Age, or gee, just Google it.) You’d think that with the sheer volume of information out there, savvy marketers would be able to convince decision-making-execs of the importance of this buy.
Capital One and Sony score a big zero. That’s right, in 2004, they reported spending virtually nothing on SLM! Wouldn’t you think that Capital One Financial, who appears to be aggressively going after just about everybody, would focus on one of the fastest rising economic segments in the U.S.? Ditto with Sony Corp.! Any major supplier of entertainment electronics should know better. Perhaps they use nontraditional techniques, such as viral marketing (Sony does sport an RSS feed on its website), but I still find it curious.
In the tech world, HP is spending almost more than Microsoft and IBM combined.
Three out of four of the top advertisers in total spending are telcos. The top spender overall is SBC Communications ($523,503,000). What’s noteworthy is that SBC is also the top spender in Spanish language media (at $9,466,000), which even outranks it own expenditures in business-to-business publications ($9,305,000). Other telcos also include Verizon Communications (#2) and Sprint Corp. (#3) – certainly connoting the competitive nature of the category. Both are way behind SBC when it comes to traditional Spanish language media spending, at $5,333,000 and $382,000, respectively
I am most surprised that there are so few companies that spend more than $2 million a year in SLM, and all of these companies spend a minimum of $40 million a year in total advertising. While Hispanic dominants represent somewhere between 6 – 12% of total population, ad spend is still about less than 4% of total. The level of commitment just seems out of whack with the size of the market opportunity. The short list of players includes Bank of America, Time Warner, Office Depot, AT&T, Deutsche Telekom, SouthWest Airlines, MasterCard International, Aflac, Wal-Mart, AMR Corp., First Data Corp. But…no more.
Some nuance does exist on an industry basis, however. Telcos spend a lot because Hispanics really overindex in the use of phone services. That explains the numbers above. on the other hand, Microsoft doesn’t (with the recent exception of Xbox) because there is on average lower PC penetration. So, ultimately, this all demonstrates the lack of attention by some marketers in addition to a rationalization for lack of SLM budgets due to lower category involvement.
My main data source is the year-end Special Issue by B2B Magazine. While first published by B2B in September 2005 (meaning it was compiled from 2004 data) and cited as their “estimates,” it is still revealing.
If you are interested in exploring this a bit more, the Association of Hispanic Ad Agencies (AHAA) commissioned a study, making it a bit biased, that analyzed ad spend by category. It is available at their website – www.ahaa.org.