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Hispanic Ad Spend Delivers Results
January 01, 2006
MARKETERS committed to advertising to Hispanics tend to deliver higher returns to their shareholders, according to the new comprehensive study "Impact to Shareholder Value Creation of Seriously Investing in Latino Marketing." The Santiago Solutions Group conducted the research of 150 U.S.-based publicly traded companies that have not undergone mergers or acquisitions in the past five years.
"The purpose of the study was to determine the value creation of companies that have shown sustainable leadership in commitment to marketing to Hispanics," says Carlos Santiago, president and CEO, who refers to the study name as a working title.
The study shows there are numerous industries that point to a direct correlation between the allocation of ad dollars in the Hispanic market and the return on shareholder equity. Last summer, Santiago's team examined companies from 11 industries, including pharma, packaged foods, automotive, brewers, restaurants, retail/department stores, retail/discount stores and personal care.
In the 2003 "The Right Spend" study with the Association of Hispanic Advertising Agencies, Santiago Solutions Group had determined the "right spend," or the spending benchmark in the Hispanic market for effectiveness. On average, the study concluded, brands should spend at least 9 percent of their ad dollars in the Hispanic market. Each industry, though, has its own right spend, in line with the Hispanic representation in sales in the category. The companies investing the most in the Hispanic market still fall short of the right spend, according to the study. However, they tend to deliver higher results on Wall Street than their category average. — Mariana Lemann
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