latino lingo

All things related to effective Hispanic marketing, Hispanic advertising and Hispanic public relations.

Monday, December 04, 2006

Put $1 in and got $4 out - Pretty good ROI

The Santiago Solutions Group released a new study today on Business Wire that does a good job in showing the return on investment (ROI) being realized by companies who have taken the Hispanic market seriously.

Called Translating Shareholder Value: An Examination of Well-Resourced Hispanic Corporate Strategies, the study of 180 top national advertisers showed that the top 25 percent of companies "that lead in their allocations to Hispanic marketing generated 2.1 times higher bottom-line profitability (net income) than companies who did not provide adequate resources to their Hispanic marketing strategies."

In addition for the top 25 percent of those investing in the Hispanic market, each $1 invested returned $4 and they generated 1.5 times higher operating income margins than the remaining companies.

According to the release:

-- there was a "positive correlation" between Hispanic marketing allocations and EBITDA (earnings before interest, taxes, depreciation and amortization) with the top 25 percent of companies allocating to their Hispanic marketing generating 1.3 times higher EBITDA than the others in the study;
-- consumer packaged goods companies led all other industries in their percent of marketing budget spent on targeting Hispanics with 5.5 percent of budget to Hispanic marketing; Following on the list were entertainment (4.7%), retail (4.4%) and automotive manufacturers (4.1%);

Al Carey, president and CEO of Frito-Lay is quoted as saying:
“The findings of this study are consistent with our own point of view that well-honed and well-supported marketing to Hispanic consumers pays off in all of our performance metrics. I expect that allocations to Hispanic marketing will be better justified as a result of these findings."


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