U.S. Hispanic ad spending is forecast to grow 5.0% in 2011 and 10.8% in 2012 according to a new report available to subscribers of Jack Myers Media Business Report. Myers data is the only independent source for marketing and advertising spending data in the U.S. market. (See Myers detailed 2010-2012 Hispanic media data below and here.) Excluding newspaper advertising, which is forecast to decline 6.0%, total Hispanic market advertising is set to increase 6.7% this year and 11.5% in 2012. More than 150 marketers are investing for the first time in Hispanic media and one major packaged goods marketer has increased its Hispanic ad budget from zero to a majority since 2008. Details are later in this report.

2010 marked a real changing of the guards for the Hispanic media sector of the Entertainment and Media industry. The overall ad market did indeed bounce back, but the U.S. Census made an even bigger splash, even if the real waves are still a few years into the future. According to the 2010 U.S. Census, there are just over 51 million Hispanics in the U.S. — that's 1 in every 6 Americans, and a 43% growth since the last census in 2000. This makes them the second largest consumer group in the country after white non-Hispanics. According to an analysis by Ad Age, the real insight is realizing how closely this group's demographic and cultural profile resembles the idealized notion of 1950s America. Hispanic Americans could be the key market for consumer goods and services that the young baby boomers once were. According to new data released by Jack Myers Media Business Report, spending by marketers are finally beginning to shift advertising budgets to Hispanic media. David Lawenda, President of Ad Sales and Marketing for Hispanic media powerhouse Univision, reports "more than 150 new marketers have been activated [as Univision advertisers] in the past six quarters, with 40 new advertisers active in this year's network TV Upfront."

Brands are finally responding with ad spend to the growing Hispanic market, although Hispanic ad spending growth is not significantly outpacing general market increases. Here's a rundown on the current state of Hispanic ad investments, and where we see the market heading.

Network television, which includes both broadcast and cable networks will significantly outpace their alphabet network brethren, pacing at 9.6% increases in 2011 and 12.4% projected increases in 2012, including political spending but excluding World Cup revenues. The total Hispanic ad market is estimated by Myers to top $5 billion in 2012. While that's a significant investment, it pales by comparison to the Hispanic market's share of population and spending power. But there are some marketers who are betting their own growth on the Hispanic community.

In 2010, food giant Kraft (KFT) allocated only 3.8% of its entire U.S. advertising budget for Hispanic media. This year it plans on tripling that amount, particularly with its Kool-Aid brand. In a fast turnaround, the majority of Kool-Aid's budget is actually going toward the Hispanic market. Fast indeed since as recently as 2008 Kraft spent 0% of the Kool-Aid budget on Hispanic audiences.

Kool-Aid isn't the only drink being increasingly marketed to Hispanics. The biggest brewing companies are also looking to pull in more Spanish-speaking customers with bilingual packaging, and by sponsoring Hispanic-American artists and a Mexican soccer league. Breweries with brands such as Tecate and Corona are also shifting their strategies to appeal to all sections of the Hispanic market, especially if they've only targeted the affluent or middle-class so far.

This strategy is taking place mostly in the television market. In May when TV execs were pitching their new season lineups to advertisers, Spanish-language programming had a presence like never before. According to a report from the New York Times (NYT),networks that mainly market in English were giving "significant sections" of their presentations to Spanish-language programming, and prime-time schedules showed clear signs of appealing to Hispanic audiences.

But there's no way that Randy Falco, the CEO of Univision (UVN), plans on letting the English networks take all the action. According to a TV NewsCheck interview, Falco has increased the budgets of internal units that work to bridge the gap between brands and audiences. By offering consumer insights, creative marketing assistance, and audience measurement data, these groups seek to invigorate new brands and increase advertising revenue for existing ones. Falco claims that these groups are the main reason why the company had "sizable" ad growth last year.

In 2011, Spanish-language TV represents more than 70% of total Hispanic ad investments, generating an estimated $3.2 billion, according to Myers' analysis.

The Hispanic audience is also digitally connected and mobile. Cell phones among Hispanics grew 26% from 2006 to 2010, compared to 18% in the general population during the same period. Hispanics are almost twice as likely to be active on Twitter than other Americans, primarily because the Hispanic marketplace is a significantly younger one. According to the International Advertising Bureau's (IAB) Hispanic Research Working Group, Hispanics have a much higher buying power index (BPI) than the average Internet user, are 55% more likely than whites and 12% more likely than African-Americans to be connected via social media, and represent nearly 15% of total online users. Just like with the rest of the population, mobile marketing and social media will become more important as the pressure on TV and print grow with the increasing availability of digital options.

However, these new opportunities are not without challenges. Advertising is about finesse and really appealing to your audience, so don't even bother with wonky translations or just boiling everything down to loving soccer.

Juan Tornoe, a partner with Cultural Strategies who specializes in multicultural marketing, believes that the main challenge will be creating ads that actually feel authentic. As quoted by the Wall Street Journal, Tornoe adds one (seemingly obvious, yet infuriatingly overlooked) piece of advice, "The most important thing to do is not stereotype."

Jack Myers Media BusinessReport                
Hispanic Advertising Spending Data and Forecast              
2010-2011-2012                  
Issued July 2011    (000,000)                  
ADVERTISING 2010 2011 2012
  % Growth $ % Share % Growth $ % Share % Growth $ % Share
                   
Network Television 4.2%  $        1,723 39.1 9.6%  $        1,889 40.8 12.4%  $        2,123 41.4
Local & National Spot Broadcast TV 6.8%  $        1,393 31.6 0.4%  $        1,398 30.2 11.1%  $        1,553 30.3
Newspapers -10.0%  $           243 5.5 -6.0%  $           229 4.9 -2.0%  $           224 4.4
Consumer Magazines -4.5%  $             91 2.1 3.5%  $             94 2.0 5.6%  $             99 1.9
Radio -4.0%  $           584 13.3 2.4%  $           598 12.9 7.2%  $           641 12.5
Online (Includes Display, Search, Video, and Other) 12.0%  $           283 6.4 15.8%  $           328 7.1 18.9%  $           390 7.6
Out-of-Home/Place-Based  2.0%  $             89 2.0 3.2%  $             92 2.0 7.0%  $             98 1.9
Total Advertising 3.2%  $    4,406 100.0 5.0%  $    4,627 100.0 10.8%  $    5,129 100.0
Source: Jack Myers Media Business Report   © copyright 2011                  
Excludes World Cup Revenues; Includes political revenues                  
Media Advisory Group Inc, Jack Myers, and employees accept no                  
responsibility for any action(s) taken as a result of this forecast.                  
DATA MAY BE USED WITH ATTRIBUTION TO JACK MYERS MEDIA BUSINESS REPORT               
BY SUBSCRIBERS ONLY FOR THEIR INTERNAL USE AND FOR CLIENT PRESENTATIONS.              
                   

You are receiving this e-mail as a corporate subscriber to Jack Myers Media Business Report. Re-distribution in any form, except among approved individuals within your company, is prohibited. As a subscriber you have full access to all archives and reports at www.jackmyers.com. If you require your ID and password, contact maryann@jackmyers.com