The net worth of U.S. Hispanics may have fallen dramatically
in the past several years, but media and marketing budgets targeting the
demographic are seeing some of their biggest increases ever.
Some brands are doubling their Hispanic marketing budgets,
and Hispanic media outlets are reporting meteoric sales growth. What gives?
According to a recent report by the Pew Research Center, the net worth of Hispanic households fell a whopping 66% from 2005 to 2009. At
the same time, African-American household wealth fell 53% and white household
wealth fell 16%.
As a result, according to Pew, the typical African-American
household in 2009 had just $5,677 in wealth (defined as assets minus debts),
compared with $6,325 for a typical Hispanic household and $113,149 for a typical
But Hispanic media experts have argued that those figures
haven't affected the demographic's purchasing power, or what they call the
"Hispanic opportunity." After a dismal 2009, marketing and advertising dollars
spent against U.S. Hispanics (who now account for 16% of the nation's total
population, or about 50 million people) are on the rise
According to this year's
Hispanic Fact Pack, which compiles data from several sources including
Kantar Media and HispanTelligence, money spent on Hispanic media grew 8.4% in
2010 to $6.8 billion, compared to a 6.5% growth rate for all U.S. media.
Univision Communications, the country's largest Hispanic
media company, raked in an estimated $1.7 billion for its 2011-12 upfront -- its
most-successful selling season to date. The figure is an important benchmark
for the network, as it continues adding new advertisers who want to exploit the
Media observers rule out a disconnect between the loss in
net worth among Hispanics and the growing flow of media and marketing dollars
spent against this demographic.
"This loss of net worth doesn't mean Hispanics are now
poorer, or have less money," Felipe Korzenny, director of the Center for
Hispanic Marketing Communications at Florida State University, said. "Hispanics
and blacks were hit disproportionately by the housing meltdown, as they were
the most likely to buy homes with so-called subprime loans ... so when the
housing market went to hell, and they lost their homes, their net worth fell as
The sudden boost in Hispanic spending by most marketers in
advertisers, in light of the 2010 U.S. Census, comes as no surprise, Korzenny
"This happens every ten years. The Census figures come out
and marketers say ‘Oh, my God, I might be missing out on this opportunity!',
and increase their Hispanic budgets," he said.
And those budgets are increasing. Media figures show that 38
of the 50 largest Hispanic marketers increased their ad spend in 2010, with 29
of them upping spending by double digits, per Hispanic Fact Pack.
"It would be a mistake to stop investing in this group
because Hispanics' net worth is down," Maria Gracia Inglessis, a planner with
New York-based Wing, a full-service advertising agency owned by Grey, said.
"Hispanics are growing not only in numbers, but also in purchasing power."
Net-worth figures aside, blue-chip advertisers continue to
join the fiesta. In addition to Univision's record upfront sales, NBC-owned
Telemundo continues its growth pattern, with a reported increase of 20% in
upfront sales from a year ago.
Almost as soon as the Spanish-language network announced the
Fall premiere of Una maid en Manhattan,
a telenovela in coproduction with Sony Pictures Entertainment, advertisers came
knocking on Telemundo's door. Chrysler, Sears, Verizon, L'Oreal and Clorox have
all signed up to integrate their brands into Una maid, set to debut in the fall, said chief operating officer