ahaa financial insurance services-auto ad-spend impact on growth_vfinal

AHAA INSIGHTS SERIES

Financial-Insurance Services & Auto

Hispanic Media Allocation Trends 2010-14

& Impact on Total Market Revenue Growth Study

November 17, 2015 (Revised on 02/12/16)

Presenters:

Carlos Santiago, Chair, AHAA Research Committee and Chief Strategist, Santiago Solutions Group

Nancy Tellet, Co-Chair AHAA Research Committee & Brand/Consumer Navigator Research Consultancy

Moderator: Gaby Alcantara-Diaz, AHAA Education Chair and President, Semilla AD, Inc.

2015 AHAA Hispanic Media Allocation & Impact on Total Market Revenue Growth Study Series -Financial-Insurance Services & Auto Sector

Context, Author & Sources

2

Since 1998, AHAA has been helping its

members serve its clients through

breakthrough independent studies. The

Hispanic Media Allocation & Impact on

TM Revenue Growth series aims to:

• Track above-the-line Hispanic spending &

allocation trends among top US marketers by

category

• increase understanding of what level of

allocation is needed to win the market

• Identify relationships between Hispanic

dedicated efforts and Total Market topline

growth.

Authors

• Study commissioned by AHAA

• Analytics and interpretation performed

by Santiago Solutions Group (SSG), a

growth strategy consultancy.

Sources

• Parent company ad spend data collected

from Nielsen Monitor Plus.

• Financial revenue growth for US

operations extracted from companies

10Ks & annual reports.

Methodology

3

English Media Included Hispanic Media Included

Cable TV Cable TV

FSI Coupon FSI CouponLocal Mag Local Magazine

Local Newspaper Local NewspaperLocal Sunday Supplement Local Sunday SupplementNational Magazine National Magazine

National Newspaper National Newspaper

National Sunday National Sunday Supplement

Network Radio Network Radio

Network TV Network TV

Span/Hisp Language Cable TV

Span/Hisp Language Network TV

Spot Radio Spot RadioSpot TV Spot TVSyndicated TV Syndicated TV

Excluded English Media Excluded Hispanic Media

B2B B2B

Display Display

Outdoor Outdoor

National Cinema

Regional Cinema

Began with 340K parent companies advertising spend data from Nielsen Monitor Plus for 2010-2014.

Classified Top 500 Total Market advertisers by year into 5 Hispanic Dedicated Media (Spanish, Bilingual, English) allocation tiers according to their share of overall ad spend targeted to Hispanic Media.

Identified US operational revenue for publicly reported companies

Applied advanced analytics to uncover statistical relationships between Hispanic Media Allocation and overall (Total Market) topline revenue CAGR

$77.5 $74.6 $74.6 $76.0

$4.3

$4.0 $4.4 $7.1

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

2006 2008 2010 2014

US Top 500 Advertisers Ad Spendin $Billions

Eng Media AdSpend Hisp Media AdSpend

+0%-4%

Top 500 Advertisers Increased Hispanic Media Spend by $3Bn or 61% vs. only 2%

in English Ad Spend, Shifting 3% of their Ad Resources to Hispanic Media

• While overall ad spend among the top 500 advertisers increased by 5%from $79.0 Bn to $83.1Bn from 2010 to 2014, marketers made a steep increase in Hispanic Ad Spend, jumping 61% from $4.4Bn to $7.1Bn.

• Hispanic allocation jumped to 8.5%of all US top 500 marketers ad spend from 5.6% in 2010.

• English Media Ad Spend increased by 2% from $74.6 Bn in 2010 to $76.0 Bn in 2014.

AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series 4

5.5%8.5%

$79.0 Bn $83.1 Bn

+2%

+61%

5.1%5.3%

$81.8 Bn $78.6 Bn

+10%-7%

Total

Financial & Insurance

Services

5

AHAA Hispanic Media Allocation Trends 2010-14

& Impact on Total Market Revenue Growth Study

6

• While overall Financial-Insurance ad spend among the top 500 advertisers increased by 20% from $5.3Bn to $6.4Bn from 2010 to 2014, marketers increased Hispanic Media AdSpend at twice the rate, jumping 39% from $253M to $352M.

• Hispanic Media allocation increased to 5.5% of all US top 500 marketers ad spend from 4.7% in 2010.

• English Media Ad Spend increased by 20% from $5.1Bn in 2010 to $6.1Bn in 2014

4.7%5.5%

$5.3Bn $6.4Bn

+39%

+20%

+20%

AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series*Financial-Insurance Services category includes Banks, Mortgage, Credit

Cards, Investment, Life/Auto Insurance Firms Among Top 500 US Advertisers

Financial-Insurance Services* Among Top 500 US Advertisers Shifted Only about

1%, well below average, of their English Media AdSpend to Hispanic Media


Millions

Financial-Insurance Sector AdSpend &

Allocation by Media Type

$352M

7

Financial-Insurance

Services Aggregate

Hispanic AdSpend* $$ Millions

Hispanic Media % of Overall

Financial Services

AdSpend*

5.5%

4.7%

*Among Top 500 in 2014

$253M$7.5M

$10.1M

Average Financial-

Insurance Services

Hispanic AdSpend* $$ Millions

2014201020142010

AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series

2010 2014

+0.8

points

Aggregate Hispanic Media AdSpend By Financial–Insurance Services Increased 1.4 times

since 2010 while the Average Company augmented its Hispanic Media AdSpend by 35%

to $10M and Hispanic Media Allocation surpassed 5% for the first time

Financial-Insurance Services Category Among Top 500 US Advertisers

+1.4x+35%

INVESTMENT

TIER

% Allocation

Hisp Media

# of CompaniesHispanic Media (Span+Bilingual)

Dedicated AdSpend $Hisp Media % Allocation

2010 2014 2010 2014 2010 2014

BIC > 14.2% 2 4 $ 156,938 $ 258,034 20.8% 17.7%

Leader 6.4% - 14.2% 3 3 $ 52,386 $ 50,574 9.2% 8.6%

Follower 3.6% - 6.3% 1 1 $ 5,586 $ 5,971 5.5% 5.7%

Laggard 1.0% - 3.5% 7 5 $ 34,475 $ 35,509 2.0% 1.8%

On-The-Sidelines < 1% 21 22 $ 3,964 $ 1,925 0.2% 0.1%

TOTAL 34 35 $ 253,348 $ 352,013 4.7% 5.5%

Financial-Insurance Services Remains As Follower But Edging Closer to Leader Allocation Tier

AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series8

• There are only 2 more companies in BIC allocation tier. • Serious Hispanic marketers are very concentrated, only 7 Best-In-Class tier firms invested

83% of the Financial-Insurance sector aggregate Hispanic AdSpend.• 2 in 3 competitors are still ‘On-the-Sidelines’.

Distribution of Financial Services Companies By Investment Tier in 2010 & 2014 (Among Top 500 Advertisers)

+$98.7M

State Farm & Wells Fargo lead in Hispanic Dedicated AllocationState Farm, Allstate, Nationwide, Chase, Wells Fargo, Progressive & Geico follow in AdSpend.

State Farm, Wells Fargo, Nationwide, Allstate rank in Hispanic Best-In-Class allocation tier.

9

Hispanic Media % of Overall AllocationHispanic Media Ad Spend $ ( Millions)


B-I-C

Leader

Avg. Hisp Media

Allocation

Follower

Laggard

On-the-Sidelines

Above Avg.

AdSpend

Below Avg.

AdSpend

10

Financial-Insurance Services: 2010-2014 Hispanic Media AdSpend & Hispanic Media Allocation Change

Increase in

Hispanic AdSpend &

Increase in

% Hispanic Allocation

Increase in Hispanic AdSpend & Decrease in %

Hispanic Allocation

Change in % Hisp Allocation

Decrease in Hispanic AdSpend &

Increase in % Hispanic Allocation


American FamMut

(7.2%,$14,271)

Seven marketers led the sector increases: AFLAC, American Family, JPMorgan Chase, Wells Fargo, Nationwide & Progressive Increased Hispanic Media Allocation by > 3 points and Hispanic AdSpend > $5M since 2010

BofA

(-6.4%, -$17,506)

Nationwide

(3.3%, $25,176)

Progressive

(3%, $14,451)

Decrease in Hispanic AdSpend & decrease in % Hispanic Allocation

Ch

ang

e in

His

p A

d S

pen

d

Allstate

(-1.4%, $29,312)

11

Why Should Financial -Insurance Services

Companies Care About

Hispanic Dedicated Allocation?

There Is A Direct & Positive Relationship Between Hispanic Allocation Among Financial-Insurance Services And Total Market Revenue Growth

Hispanic Allocation and Revenue Growth

Hispanic Media Ad allocation (2014)

TM

Rev

enu

e G

row

th (

2010

-201

4)

12Linear regression: y=0.3475x + 0.01036; R2=0.1331

All findings discussed in the presentation are statistically significant at a 99.9% confidence level or better.

Financial Services and Insurance companies investing

0% of their AdSpend in Hispanic-dedicated Media grow overall revenues on average at

1.4% annually. At 5% allocation, companies

grow overall revenues at 3.1%. Companies allocating 10% of their AdSpend to Hispanic-dedicated media grow their

revenues at a 4.8% pace.And those at 15% allocation

grow at 6.5%.

There Is A Direct & Positive Relationship Between Hispanic Allocation Shift Among Financial-Insurance Services And Total Market Revenue Growth

Change in Hispanic Media Allocation and TM Revenue Growth

Change in Hispanic Media Ad allocation (2010-2014)

TM

Rev

enu

e G

row

th (

2010

-201

4)

13

R2=0.2242

Y=0.9097X + 0.0182

Increasing Hispanic Media Allocation by 5% points boosts Total Market

Revenue Growth by 4.5% annually.Conversely, decreasing Hispanic-

dedicated media by 5% would reduce overall revenue growth by -4.5%.

Increasing allocation 10 percentage points would increase annual revenue

growth by 9.1%.

Linear regression: y=0.9097x + 0.0182, R2=0.2242


A 5 Point Allocation Shift from English to Hispanic-dedicated Media Has

Significant Impact on Overall Growth for Financial/Insurance Marketers

14

-5% pts Hisp

Media Allocation

Fin/Ins Services Baseline Revenue

Growth

1.8% /yr

No

change in

Allocation

+4.5%

-4.5% deceleration

+5% pts Hisp

Media Allocation

6.4%

incremental acceleration in revenue growth

Annual Revenue Growth Rate

-2.7% Annual Revenue Growth Rate

CONSTELLATION BRANDS

POST HOLDINGS

CHURCH & DWIGHT

DR PEPPER SNAPPLE

P&G

DIAGEO

PEPSICO

BIG LOTS

SABMILLER

CLOROX

HERSHEY

KRAFT

KAO

TARGET

KROGER

SCOTTS MIRACLE

CAMPBELL SOUP

ESTEE LAUDER CONAGRA

NESTLE

LVMH

KELLOGG FAGE

LINDT & SPRUNGLI

NUTRI/SYSTEM

RECKITT BENCKISER

BOSTON BEER

HJ HEINZ

GNC

CVS

STAPLESSHISEIDO

ENERGIZER GENERAL MILLS

JM SMUCKER

WALGREENS

UNILEVER

DANONE

ACE HARDWARE

y = 0.3323x + 0.0168R² = 0.2814

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

-15.0% -5.0% 5.0% 15.0% 25.0% 35.0% 45.0%

As comparison, CPG Companies Growth Rates Are Also Related To Changes In Hispanic Allocation but the impact of 5 points of

allocation is lesser than in Financial/Insurance categoryChange in Hispanic Allocation and Revenue Growth

Change in Hispanic Ad allocation (2010-2014)

Rev

enu

e g

row

th (

2010

-201

4)

15


Findings:

• 5% points increase in Hispanic-dedicated Media Allocation yields 1.7% boost in Total Market revenue growth. A 10% increase would accelerate overall growth 3.3% annually and a 15% increase total market revenue CAGR by 5%.

• Slashing Hispanic Media Allocation by 5% points would decrease revenue growth by -1.7%, a 10% cut of AdSpend allocation would decelerate overall growth by -3.3% and bringing down Hispanic media allocation 15 points would reduce the pace of overall growth -5% annually.

Financial-Insurance Services Conclusions

The Financial-Insurance sector made modest progress towards Hispanic dedicated marketing efforts. • Financial-Insurance companies shifted almost $100 million in four

years to Hispanic Media, 2x English media increase.

• Hispanic Media allocation reached 5.5% --less than 1 point away from Leader allocation tier.

• The sector is expanding from the top with only 2 additional marketers at the Best-In-Class & Leader allocation level and these top tiers represented 8 in 10 new Hispanic AdSpend $.– State Farm, Wells Fargo, Nationwide, Allstate, JPMorgan Chase,

American Family, AFLAC & MasterCard are setting the pace.

– 2 in 3 companies remain On-the-Sidelines investing less than 1% in Hispanic media.

• For Financial-Insurance marketers, a 5 point allocation shift from English to Hispanic media results in 4.5 points boost to Total Market annual revenue growth –one of the highest Allocation-Growth impacts found in any category studied thus far pointing to the vast untapped opportunity still available.– As comparison, every 5 points shift from English to Hispanic media by

CPG/Retail companies yields on average a 1.7% acceleration to the overall annual revenue growth rate.

16AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series

17

Auto Sector

AHAA Hispanic Media Allocation Trends

2010-14 & Impact on Total Market Revenue

Growth Study

Automotive* Companies Among Top 500 US Advertisers Shifted over

4% of their English Media Ad Spend to Hispanic Media

2010-2014 Nielsen Monitor Plus data; Santiago Solutions Group analysis & interpretation for AHAA: The Voice Of Hispanic Marketing18

4.4%

8.4%

*Automotive Category includes Dealers, Dealer Assn, Manufacturers, Parts and Repairs Among Top 500 US Advertisers

$9.4B $12.8B

+30%

+163%

• While overall ad spend among the top 500 advertisers increased by 36% from $9.4B to $12.8B from 2010 to 2014, marketers made a steep increase in Hispanic Ad Spend, jumping 163% from $0.4B to $1.1B.

• Hispanic allocation jumped to 8.4% of all US top 500 marketers ad spend from 4.4% in 2010.

• English Media Ad Spend increased by 30% from $9.0B in 2010 to $11.7B in 2014• The English share of ad spend among the top 500 US marketers

is down to 91.6% in 2014 from 95.6% in 2010.

+36%


Billions

Auto AdSpend by Media

$1,079M

Aggregate Hispanic AdSpend in Auto Sector Increased 2.6 times since 2010 with

the Average Auto Company augmenting its Hispanic Media AdSpend by 156% to

$26M and Hispanic Allocation doubling to 8.4% of overall AdSpend.

19

Auto Sector

Total Hispanic Media AdSpend* $$ Millions

Hispanic % of Overall Auto

Media AdSpend*

8.4%

4.4%

*Among Top 500 in 2014

$10.3M

$26.3M

Average Auto Company

Hispanic Media AdSpend* $$ Millions

2014201020142010

Auto Sector (Auto Manufactures, Auto Dealers, Auto Repairs) Among Top 500 US Advertisers


+156%

2014

$411M

+2.6x

2010

+4

points

INVESTMENT

TIER

% Allocation

Hisp Media

# of CompaniesHispanic Media (Span+Bilingual)

Dedicated AdSpend $000Hisp Media % Allocation

2010 2014 2010 2014 2010 2014

BIC > 14.2% 2 4 $ 16,479 $ 297,230 18.3% 16.7%

Leader 6.4% - 14.2% 4 13 $ 135,442 $ 668,379 7.8% 9.4%

Follower 3.6% - 6.3% 6 5 $ 206,621 $ 96,113 5.5% 6.0%

Laggard 1.0% - 3.5% 9 6 $ 46,975 $ 13,908 2.3% 2.0%

On-The-Sidelines < 1% 19 13 $ 5,204 $ 3,724 0.3% 0.2%

TOTAL 40 41 $ 410,720 $ 1,079,354 4.4% 8.4%

The Auto Sector Stepped Up Their Hispanic Media Commitment from Follower

Allocation Tier to Leader Allocation Tier

2010-2014 Nielsen Monitor Plus data; Santiago Solutions Group analysis & interpretation for AHAA: The Voice Of Hispanic Marketing20

+$668.6M

• 17 Automotive companies allocated >6.4% (BIC and Leader level) to Hispanic dedicated efforts in 2014 from 6 in 2010• In 2010, 70% of Auto companies allocation to Hispanic Media ranked as Laggards and On-the-Sidelines vs. 46% of the

companies in 2014.

Distribution of Automotive Companies By Investment Tier in 2010 & 2014 (Among Top 500 Advertisers)

000’s

Toyota, Nissan and GM lead in Hispanic AdSpend followed by Ford, Honda & Fiat-Chrysler.

AutoZone, Hyundai, Nissan & Kia rank as Best-In-Class in Hispanic Media Allocation.

21

Hispanic Media % of Overall AllocationHispanic Media AdSpend $ (Millions)

DA = Dealers Association

2010-2014 Nielsen Monitor Plus data; Santiago Solutions Group analysis & interpretation for AHAA: The Voice Of Hispanic Marketing

B-I-C

Leader

Follower

Laggard

On-the-Sidelines

Above Avg.

AdSpend

Below Avg.

AdSpend

Avg. Hisp Media

Allocation

Nissan, Honda, Kia, Hyundai, Fiat-Chrysler, Ford Dealers Assn, & Honda Dealers Assn have all increased Hispanic Media AdSpend more than $30M and have increased Hispanic Allocation By >5 points since 2010

22

Automotive: 2010-2014 Hispanic Media AdSpend & Hispanic Media Allocation Change

Ch

ang

e in

His

p A

d S

pen

d


Change in % Hisp Allocation

Increase in

Hispanic AdSpend &

Increase in

% Hispanic Allocation

Increase in Hispanic AdSpend & Decrease in %

Hispanic Allocation

Decrease in Hispanic AdSpend &

Increase in % Hispanic Allocation

Decrease in Hispanic AdSpend

& decrease in % Hispanic

Allocation

23

Why Should Auto

Companies Care About

Hispanic Dedicated

Allocation?

A 5% points increase in Hispanic Media Allocation yields 1.1% boost in annual Total Market

Revenue Growth.

Conversely, decreasing Hispanic-dedicated media

allocation 5% would reduce overall revenue growth by -1.1%.

Increasing Hispanic allocation by 10 percentage points would

increase annual revenue growth by 2.2%.

Automotive Category

There Is A Direct & Positive Relationship Between Allocation Shifts from English Media to Hispanic Media & Total Market Revenue Growth

Change in Hispanic Media Allocation and Revenue Growth

24

Linear Regression: Y=0.2205X + 0.0778; R2=0.0973Statistically significant at a 90% confidence level.

A 5 Point Allocation Shift from English to Hispanic-dedicated Media

Has Significant Impact on Overall Growth for Auto Marketers

25

-5% pts Hisp

Media Allocation

Auto Sector Baseline Revenue

Growth

7.8% /yr

No

change in

Allocation

+1.1%

-1.1% deceleration

+5% pts Hisp

Media Allocation

8.9% incremental acceleration in revenue growth

Annual Revenue Growth Rate

6.7% Annual Revenue Growth Rate

Auto Sector Conclusions

Auto marketers which greatly increased their allocation to

Hispanic dedicated media since the Great Recession benefited

directly from Hispanic’s car expenditures. • Auto sector shifted nearly $700M in AdSpend to Hispanic Media.

• Hispanic Media allocation doubled to 8.4% since 2010.

• The breadth and depth of investment levels in Hispanic media

allocation is unprecedented.

• 6 companies took major leaps increasing investment >$30M and

shifting more than 5 allocation points to Hispanic media: Nissan,

Honda, Kia, Hyundai, Ford Dealers and Honda Dealers.

• In general, a 5 point allocation shift from English to Hispanic media

resulted in 1.1 points lift of accelerated growth in Total Market

annual revenue.

• As Auto marketers have succeeded at migrating Hispanic

consumers towards higher end models, luxury auto brands are

making their entry into the Hispanic segment.

26AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series

Overall Takeaways

27

CPG ManufacturersCPG Retailers

Top 500

2010-2014 Nielsen Monitor Plus data; Santiago Solutions Group analysis & interpretation for AHAA: The Voice of Hispanic Marketing28

Categories by Hispanic Media Allocation Tiers

1.0%

Allocation

Tiers

2.5%

3.5%

8.8%

10.9%

11.4%

7.1%

Restaurant

Pharma

Appliance-Electronics

Home Repair-Furnishing

Apparel

Tech-Telecom-Entertainment

In Relation To Other Categories, Auto Allocation Falls Near The US Top 500 Marketers Average While Financial-insurance Is 35% Below The Average

Financial-Insurance 5.5%

Automotive 8.4%

9.3%

The Hispanic Media Allocation-Revenue Growth Study Series

Proves That Resource Shifts Behind Hispanic Consumers Are a Critical

Component in Boosting Total Market Growth Rates

Change in Hispanic Media Allocationalone explains about

10-30% of the

change in topline

revenue growth… 28% Hispanic Marketing

Other Drivers of Growth72%

CPGs & Retailers*

29All findings discussed in the presentation are statistically significant at a 90-99.9% confidence level.

Change in Hispanic Allocation

Other Drivers include critical factors

such as Brand Awareness & Equity,

Value:Price perception, Messaging

Relevance, new product

development, measurement tools,

distribution, sales force,

implementation performance,

customer experience, social

responsibility, organization

structure, talent, overall

segmentation expertise, etc.

78%

22%

Financial-Insurance Services*

90%

10%

Automotive Category*

Hispanic Marketing

Hispanic

Marketing

Other Drivers of Growth


* 2010-2014

** 2006-2010

70%

30%

Tech-Telecom-Entertainment

Hispanic Marketing


Implications

• For the most part, Marketers benefit as they shift ad resources from English to Hispanic

media simply because they generally have been underfunded and relevance of message

and context tends to lift results.

• Total Market Approaches that focus only on Integrating Hispanic segment efforts at the

expense of Hispanic dedicated strategies will compete at a disadvantage.

• The key for marketers is to attain a proper allocation and messaging strategy in Hispanic

media AND integrating Hispanics insights in everything they do in English media.

30

31

Q A

AHAA Members enjoy full access to entire research studies; synopsis

available to non-members at www.AHAA.org/Market-Research

To share case studies, questions, comments, or new ideas, please contact: Gaby Alcantara-Diaz, SemillaAd, [email protected]

Carlos Santiago, Chief Strategist SSG, [email protected]

Nancy Tellet, Millennial Expert, [email protected]

mailto:[email protected]

