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CPG, Retail Unlock Growth Via Hispanic Marketing

FAIRFAX, Va. — Consumer packaged goods (CPG) and retail marketers are seeing a direct correlation between topline revenue growth and Hispanic media investment, according to a recent report from the Association of Hispanic Advertising Agencies (AHAA): The Voice of Hispanic Marketing. CPG and retail companies among the top 500 U.S. advertisers increased their Hispanic media spend by 67% during 2010 to 2014 – compared to a 20% increase of aggregate Hispanic ad spending in the previous 2006 to 2010 time period.

The study revealed that shifts from English to Hispanic media explain 28% of CPG/retail companies’ acceleration in topline revenue growth from 2010 to 2014.

“Historically, CPG/retail companies have led other top marketers in their allocation of resources to capture Hispanic purchases and loyalty. More recently, we have seen how players that have increased allocations to Hispanic marketing efforts have significantly delivered accelerated topline revenue growth in the U.S.,” said Carlos Santiago, chair of the AHAA Research Committee. “For every five-point shifts from English to Hispanic media, we found, on average, a 1.75 boost in revenue growth rates—tangible evidence that shifts to Hispanic media directly impact total market revenue growth.”

Since 2006, the aggregate Hispanic ad spend by CPG/retailers increased 100%, the average CPG/retailer ad spend increased to $22 million in 2014, and allocation shifted from English media to Hispanic by 5.2 points. On the other hand, the AHAA study indicated that the CPG/retail category, which includes beverages, consumer products, packaged goods, health and beauty products, over-the-counter drugs and retail, decreased their English advertising spending by 7% during the same timeframe, indicating a major strategic shift that is placing Hispanic marketing as a top corporate priority.

  • According to the report, P&G spends the most against Hispanic advertising with $439 million followed by L’Oréal, MARS, Walmart, Anheuser-Busch and SABMiller.
  • Goya leads in highest percentage toward Hispanic with 59% of its advertising going to Hispanic with Constellation Brands (wine, beer and spirit marketer whose portfolio includes brands like Clos du Bois, Robert Mondavi, Corona, Modelo) and L’Arche Green (Heineken) close behind with 46% and 35%, respectively.
  • Constellation Brands, L’Arche Green, Colgate, SABMiller, Guthy-Renker (maker of direct-to-consumer product lines like Proactiv+ and Sheer Cover) and Aderans (global provider of hair replacement and restoration products like Bosley for men) are among the brands contributing more than a quarter of their advertising budget to Hispanic.
  • Companies that made the biggest jump include Constellation Brands, P&G, household consumer products and personal care company Church & Dwight, (Arm & Hammer, Oxi Clean and Orajel), Aderans, cereal manufacturer Post Holdings, Dr. Pepper Snapple, Colgate, Diageo and Milk Processors, all of which increased Hispanic allocation by more than 10 points and Hispanic ad spend by more than $7 million each since 2010.
  • Among retailers of consumer packaged goods, HEB, Big Lots, Publix, Walmart, Target and Kroger stepped up their Hispanic efforts by 5 to 15 allocation points between 2010 and 2014.

This upward trend shows no signs of stopping with the mean Hispanic ad spend increasing from 16%, or $12.6 million, in 2006-2010 to 74%, or $21.9 million in 2010-2014. Finally, CPG/Retail category marketers increased their spending against Hispanic dedicated media from 6.3% in 2010 to 10.7% in 2014, led by CPG manufacturers achieving 10.9% and followed by Retailers reaching 9.3% in 2014 Hispanic Allocation.

The CPG/Retail Category evolved from being a “follower” with 6.3% in 2010 to becoming a “leader” with a 10.7% Hispanic Allocation in 2014. From 2010 to 2014, the number of CPG/retail companies in the “Best-In-Class (BIC)” and “leader” allocation tiers among top 500 advertisers doubled, jumping from 26 to 40 companies. In fact, many of these companies were previously in “follower” and even “on-the-sidelines” categories.

Over the past five years, the top 500 advertisers boosted their spending in Hispanic targeted media by 63% or $2.7 billion from $4.3 billion in 2010 to $7.1 billion. The top 500 advertisers boosted their average spending from $9 million in Hispanic targeted media in 2010 to $14 million now.


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