According to Hispanic Business estimates, ad spending in the Hispanic market jumped 14% last year to $722 million. That percentage increase is almost four times the 3.6% hike in 1992.
"I think the momentum just started in 1993," says Ray Rodriguez, president of Univision Television Network. Ad revenues at Univision and its stations jumped 10% to $154.8 million for the nine months ending Sept. 30. "We'll see a big jump in '94 and further. The market is just beginning to wake up."
Several factors are driving spending and giving the market increased vigor, Hispanic advertising and media executives say. These include an improved economy, strong population growth, a growing variety of U.S. Hispanic media outlets and vastly improved media and market research. The North American Free Trade Agreement and the boom in the Latin American economy also are having a positive impact.
The nation's 25.5 million Hispanics make up 9.8% of the population-almost one in every 10 Americans, according to U.S. Census Bureau. The bureau projects that by 2010 Hispanics will surpass African-Americans as the largest U.S. minority group.
These factors helped Hispanic media record banner years. Radio stations, such as KLAX-FM, the top-ranked station in all of Los Angeles, have flourished (see story on Page S-8). And in TV, not only did No.|1 network Univision post a sales boost, No.|2 network Telemundo Group saw its U.S. network, national spot and local ad revenues increased 25% to $70.8 million for the nine months ending Sept. 30.
Marketers that started or increased advertising on Hispanic network TV include blue-chip companies like Nike, Reebok International, MasterCard International, Montgomery Ward & Co. and long-distance phone giants AT&T Co., MCI Communications Corp. and Sprint.
Observers say these advertisers boosted their Hispanic spending not just because of the market's growth, but also because of an improved economy and a new, reliable Nielsen Media Research ratings service (see story on Page S-8).
Many of the new network TV advertisers in 1993-MasterCard, Nike, Reebok, Montgomery Ward, Exxon Corp. and Shell Oil Co.-were brought in by their general-market agencies and media buying services.
"There are a lot more general-market shops doing work in the Hispanic market," says Filiberto Fernandez, senior VP-marketing at Telemundo.
Hispanic media and agencies expect further support later this year when Simmons Market Research Bureau introduces its Study of Hispanic Media & Markets. The effort will measure the purchasing patterns of almost 400 products and services, and media habits, demographics and language preference of U.S. Hispanics.
These data will be directly comparable with Simmons' general-market study. Local data also will be available for the seven largest Hispanic markets.
"Advertisers really want to know product usage dynamics," says Jon Marks, VP-corporate research for Telemundo. The Simmons study "could be every bit as important to the Hispanic market community as Nielsen has been."
While last year's ad growth came from big-name marketers, Hispanic agencies see much of their 1994 growth com ing from second-tier advertisers entering the market-non-package goods and regional cli ents, especially in retail and financial services.
Advertisers also are expanding their bud gets to include full- service programs, including direct mail, direct response and PR.
"We're doing a lot more direct response, database mailing, direct broadcast," says Carlos Rossi, chairman-ceo of Conill Advertising, New York.
Some observers expect regionalized efforts to increase as marketers address the separate nationalities of Hispanics. "It isn't just the Hispanic market anymore. Many are following the lead of the beer brands and subsegmenting and looking at Hispanics of Mexican descent different from those of Cuban descent," says Carl Kravetz, president of Cruz/Kravetz:Ideas, Los Angeles.
Hispanic agencies also expect to handle business crossing the Rio Grande, as Mexican and American marketers look across the border after passage of Nafta.
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Ad revenue boom
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for example, has been assigned projects for Ace Hardware Corp., Rayovac Corp., Swift-Eckrich Corp. and World Book International.
"A lot of companies in the U.S. that do not have international capabilities see us as a bridge between the U.S. and Mexico. Also, Mexican companies are interested in coming to the U.S.," says Hector Orci, president of La Agencia de Orci, Los Angeles.
Many U.S. advertisers also are asking their U.S. Hispanic agencies to place pan-American buys covering the booming Latin American market. One-stop shopping has been made easier with new media vehicles in Latin America and the U.S., including cable networks MTV Latino and Canal de Noticias NBC.
"This is new money coming out of international budgets," Mr. Rossi says.
Because advertisers are asking for more pan-American buys, D'Arcy Masius Benton & Bowles earlier this month established its DMB&B Americas network, which crosses nine nations.
Creative will most likely come out of the U.S.-given U.S. Hispanic shops cross-cultural expertise, these agencies say.
"When we produce advertising in the U.S. Hispanic market, we consider every subgroup-Cuban, Central Americans, South Americans, Mexicans, Puerto Ricans. Creative has to be pan-cultural," says Lionel Sosa, chairman of DMB&B's Americas network.
Despite the upbeat forecast, the Hispanic market still has some clouds on the horizon. Telemundo has been trying since June to lessen its $300 million debt-load and emerge from Chapter 11 bankruptcy reorganization, expected to happen early this year.
In addition, Hispanic print and outdoor media are vulnerable to further cuts in ad spending by the tobacco industry, a big revenue category.
Also, the growing anti-immigration backlash could scare off some marketers.
"When an advertiser does outdoor ads in Spanish, it's not uncommon to get complaints" from Anglos, Mr. Kravetz says.
Still, these considerations haven't stopped a media boom, especially in cable and newspapers.
MTV and NBC have brought their Latin American cable services to the U.S., while other networks, including Prime Ticket, are planning Spanish-language channel launches for later this year. In the newspaper arena, mainstream papers such as the Chicago Tribune and Fort Worth Star-Telegram recently added or will soon add products for Hispanic readers (see story on Page S-10).
These fears also haven't dampened advertiser interest in this year's World Cup soccer tournament, the Hispanic sports fan's Super Bowl, to be played in the U.S. for the first time. Univision has sold out its entire $20 million, 52-game inventory to sponsors including American Honda Motor Co., Anheuser-Busch's Budweiser beer, AT&T, Coca-Cola Co., General Motors Corp.'s Chevrolet division, MasterCard, McDonald's Corp. and Pennzoil Co.
"World Cup is going to be a huge event," Mr. Kravetz says of this summer's international sports-and now, marketing-extravaganza. "Everyone will come in to some extent."M