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After years of prodding marketers to address the growing Hispanic segment, several key elements have come together to produce an explosion of life in the market.

Instead of just dabbling and testing, many advertisers are engaged in full-scale marketing wars. For instance, the combined ad spending of three major long-distance phone companies last year was almost triple the amount spent in 1993. AT&T Corp. jumped to the No.2 ad spender in the Hispanic market, from No.7 the previous year..

"The industry in the last two years has turned a corner," says Dolores Kunda, VP-account director in charge of Leo Burnett Co.'s Hispanic unit. "Clients are coming to us. ... [They] are starting to understand that Hispanics are not poor Mexicans from the barrio with hangdog mustaches and no money."

The market has seen big advertising gains since 1993, after years of slower growth (see chart at right). Advertisers spent an estimated $953 million in the market in 1994, up 15% from the previous year, Hispanic Business estimates.

The market still has lots of room to grow for 1995 and the coming years, Hispanic agencies and media outlets insist. Some observers predict market growth of up to 15% this year.

"There are 9,700 companies advertising over 100,000 brands in the general market," says Filiberto Fernandez, senior VP-marketing for TV network Telemundo Group. "The Hispanic market has about 1,000 brands advertising 2,000 companies. Many categories have only one or two brands advertising. There is room to grow."

Many elements, from a growth in Hispanic population and media outlets to improved research to Univision's coverage of the 1994 World Cup soccer tournament have combined to fuel ad spending growth.

Even without a World Cup in 1995, expenditures are expected to rise.

Hispanics now number 26 million or 10% of the population, according to U.S. Census Bureau. But, they make up an even bigger force in markets like Los Angeles (40%), Miami (63%), San Antonio (57%) and New York (24%).

By 2010, Hispanics will surpass African-Americans as the second-largest race/ethnic group in the U.S.

The Hispanic median household income is lower than the market overall-$22,859 vs. $30,784, according to the U.S. Census Bureau. But this segment is attractive demographically because it's younger and includes more families with children.

"America is rapidly becoming a diverse multicultural country. We are committed to providing the right merchandise, in the right store environment, with the right marketing plan," says John Costello, senior exec VP at Sears, Roebuck & Co.

Sears, through agency Mendoza, Dillon & Asociados, Newport Beach, Calif., was the top-spending retailer in the Hispanic market last year. Ad spending jumped to $10 million last year from about $6 million in 1993. Among other retailers increasing Hispanic ad spending were Kmart Corp.'s Builders Square division, Dayton Hudson Corp.'s Target unit and Toys `R' Us-all newcomers to this market, according to Hispanic figures.

As advertisers take note of this market's growth, current product category battles should continue and intensify.

An ad battle royale broke out in long-distance telecommunications. Combined expenditures of AT&T, MCI Communications Corp. and Sprint jumped from $11.9 million in 1993 to $31 million last year, Hispanic Business estimates.

"The Hispanic consumer on average spends twice as much as general-market consumers on long-distance calls," says Carlos Ramirez, PR manager for Hispanic consumer markets at AT&T. Bravo Group, New York, handles the AT&T business.

The spending boosts are coming in many product areas. Sosa, Bromley, Aguilar & Associates, San Antonio, Texas, saw billings increase 15% to $76 million as all but one of its clients increased budgets. That excludes an additional $30 million in Procter & Gamble Co. media business picked up from the shop being consolidated this year with Noble & Asociados, Irvine, Calif,. a fellow DMB&B Americas shop.

"Hispanic [marketing] is becoming a way of life" among Sosa clients, says agency president Al Aguilar.

Improved market research is also bringing more dollars to this segment.

Nielsen Media Research's national Hispanic ratings service, launched in November 1992, is credited for giving Spanish-language network TV a boost.

For example, ad revenues for Univision Television Network and Univision Television Group were up 25%, to $193.9 million, for the first nine months of the year, according to financial statements filed with the Securities & Exchange Commission.

That surge came even though Nielsen numbers are significantly lower than previous estimates, believed to have overcounted the market.

"Nielsen is adding credibility to the market," says Monica Fragale Gadsby, VP-associate media director at Chicago-based Burnett's Hispanic unit.

Nielsen this month plans to release its first monthly books for its local Hispanic TV ratings service, which is being expanded from two to 11 markets.

Also, Nielsen will team with Hispanic Market Connections, a market research firm, this year to start tracking grocery store purchases in more than 13,000 Hispanic homes.

Simmons Market Research Bureau in February releases its first Hispanic Study tracking TV, radio and print media usage with purchasing tendencies.

Arbitron Co. is working on improving its Hispanic radio listener reports.

"The market is really coming of age," says Joe Zubizarreta, VP-account services at Zubi Advertising Services, Miami, a $17.5 million shop that grew by 18% in the last year. "It is becoming much more professional in its delivery systems."

Hispanic agencies also are seeing some growth come from increased foreign trade with Mexico and Latin America in the post-Nafta era. Miami agencies also stand ready to take advantage of any change in the U.S.' relationship with Cuba.

Sosa Bromley Aguilar & Associates has picked up billings from Burger King and La Quinta Motor Inns in their expansions into Mexico. Del Rivero Messianu, Coral Gables, Fla., sells timeshares in Florida for Marriott Resorts to Latin Americans. Sanchez & Levitan, Miami, helped launch the Charles Schwab & Co. Latin America Center and telebroker services aimed at Hispanics in the U.S. and Latin America.

Several agencies say they are doing consulting work for clients on Mexico and Latin American expansions.

"We get a lot of inquiries following the North America Free Trade Agreement," says Victor Ornelas, president of Ornelas & Associates, Dallas, which grew by 32% to $25 million in 1994.

"But I'd say it's in the dating stage, not in the serious relationship stage."

Despite a possible anti-immigrant movement brought on by the passage of Proposition 187 in California and the discussion of similar proposals elsewhere, Hispanic agencies and media reps say they don't expect market growth to be inhibited. An estimated 750,000 legal immigrants are allowed into the U.S. each year, many of those from Latin America. The U.S. Hispanic population birthrate continues to grow faster than the population as a whole.

"American marketers are interested in selling their product to the existing market of 26 million," notes Mr. Fernandez.

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