AHAA Offers Spending Guidelines

DALLAS The Association of Hispanic Advertising Agencies released a study at its semiannual convention here today that found advertisers in many categories should devote more than 8 percent of their national ad budgets to the Latino market.

In a similar report last spring, the AHAA recommended 8 percent only as a “ballpark average” allocation.

The current report said rather than using that figure as a standard, marketers should instead consider three factors: the proportion of the Hispanic households in a market, the portion that is Spanish-dominant and bilingual, and the consumption level of individual product categories.

The report offers spending guidelines for 12 major categories based on information The Santiago Solutions Group of San Francisco gathered from U.S. markets with high Hispanic populations, including New York and Houston. President Carlos Santiago said the numbers can be adjusted when targeting smaller markets by reducing the percentages 1 percent or 2 percent.

The report is divided into two parts: developed categories—those which enjoy high consumption by Latinos—and underdeveloped, which do not.

The health and beauty care category is among the developed. Since Latino households use more of those products than non-Hispanic households, advertisers in those categories should devote 50-100 percent more resources than the actual number of Hispanic households in the top markets. That amounts to devoting $1 out of every $3 or $4 dollars toward Latino marketing efforts.

The suggested allocation is even higher for children’s products. Since Hispanics’ consumption of these products is higher than non-Latinos, given the generally higher number of children in Hispanic homes, marketers should spend 100 to 350 percent more dollars than the actual number of Hispanic households in the top markets, amounting to $1 in $2 of available resources.

On the opposite end, “right-spend” levels for banking products are 25 percent below the share of total households in the top Hispanic markets. As a result, banks should devote between 8 and 13 percent of their retail budgets toward advertising savings accounts, mortgages and checking accounts to the segment, the report said.

Because there are still “underaddressed cultural misperceptions and unfamiliarity in the American system” with financial investment services, the study said marketers of those products should spend 50 percent below the household share. That means bonds, stocks and mutual funds require a 6 percent budget allocation.

“The underdeveloped data says that households could be a potential, so don’t neglect them,” Santiago said.

Current spending targeting Hispanics across all categories is approximately 3.2 percent of national ad budgets, Santiago said.

Some of the data used in the report was derived from Nielsen Media Research, which is owned by Adweek‘s parent company, VNU Inc.