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Hispanic TV Summit: Level Of Ad Spending Is 'Disgusting': Vidal's Ruiz

New York -- While Hispanics account for 16% of the U.S. population, less than 5% of media spending is targeted at Latino consumers -- a disparity that's disgraceful, said Antonio Ruiz, partner and director of communications planning for ad agency The Vidal Partnership.

Ruiz, speaking here Tuesday at the B&C/Multichannel News Hispanic TV Summit, said corporate America needs to understand that reaching Latinos is a "make-or-break" proposition. Vidal, which focuses on the Hispanic market, has $380 million in annual billings.

"I personally think it's disgusting that only 4.5% of media spending is going toward Hispanic consumers," Ruiz said. "I think it's disgusting that we had to make a big deal out of the 2010 Census."

He added, "I think most organizations in the U.S. don't know how to fully value the Hispanic contribution to the business -- it's largely perceived as a secondary segment of the population." In certain markets, Hispanics can represent upwards of 50% or more of spending for specific categories, Ruiz noted.

Kraft Foods, for one, has increased its spending in Hispanic media threefold in 2011, according to Chris Montenegro McGrath, vice president of sustainability and Latino marketing. She declined to provide specific figures but said Kraft is above the 4.5% industry average.

"I feel like, right now, we are spending enough [in Hispanic]," Montenegro McGrath said. "We are on a journey. We were not spending enough and investing in this marketplace. It is embarrassing to admit how few brands we had in Spanish-language media" three years ago.

Montenegro McGrath, who heads Kraft's three-year-old Hispanic center of excellence internal advisory group, acknowledged that some of the company's brands "don't get it.... They just don't see the Latino opportunity. We have to help them see the opportunity for their brand."

Ruiz argued that agencies and programmers need to redouble efforts to "move that 4.5% to get to 9%, instead of finding smarter ways of splitting up that 4.5%."

However, it's important to put the growth of Hispanic TV advertising spending in context, said Caleb Windover, senior vice president and managing director at MV42 Degrees, a multicultural media agency within Starcom MediaVest Group.

"It's easy to say, ‘Gee, we're not spending enough in this industry,'" Windover said. "I think it's important to recognize accomplishments we as an industry have made. It's getting better than it was. I look back and see that our rate of growth as a company, 42 Degrees, has been more significant than our general-market counterparts."

Tom Maney, Fox Hispanic Media senior vice president of ad sales, agreed that the market has made great strides: "The conversation has gone from ‘Why should we advertise in Hispanic' to ‘How can we effectively market to those consumers.'"

And as long as the return on investment is there, Hispanic media spending will continue to grow. "People don't cut things that are working. They get rewarded if the business grows," Montenegro McGrath said.

The panelists also discussed the diversification of the Hispanic TV market, with more choices than ever for both Spanish- and English-speaking Latinos.

Rentrak now measures 32 linear Hispanic networks via set-top box data from 7.8 million households and provides "census-level" measurement of Hispanic content, said Carol Hinnant, senior vice president of national network sales for TV.

With more Hispanic cable networks being measured that means more advertising supply, "which all things being equal means lower CPMs [cost per thousand] for our clients," Windover said. "It all combines together to ultimately increase budgets but also increase return on investment."

The trend has also meant more Hispanic viewers are shifting to cable, Fox Hispanic Media's Maney said. Cable now has 22% share of Latino viewers on a total-day basis, while for Hispanic men it's up to 28%, he said.

"It's new content," he said. "It's changed from mass appeal to mas appeal."

NBCUniversal's Telemundo has addressed the growing diversity of the U.S. Hispanic population with the flagship Spanish-language network and the bilingual cable network mun2, said Christine Escribano, vice president of integrated marketing solutions. "Language is one important tactic [for reaching Hispanic audiences] but it's just one," she said.

Ruiz said that over the next decade, as younger marketing executives come up through the ranks, they'll be more attuned to spending in multicultural media.

"As they take over leadership, the way they see things is going to be more conducive to a multiethnic marketing approach," he said.

The panel was moderated by Jon Lafayette, business editor of Broadcasting & Cable.