AHAA INSIGHTS SERIES Financial-Insurance Services & Auto Research/Budge… · Financial-Insurance...
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AHAA INSIGHTS SERIES
Financial-Insurance Services & Auto
Hispanic Media Allocation Trends 2010-14
& Impact on Total Market Revenue Growth Study
November 8, 2015
ANA Multicultural & Diversity Conference
Presenter:
Carlos Santiago, Chair of AHAA Research Committee and Chief Strategist, Santiago Solutions Group
2
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 data extracted
from companies 10Ks.
2015 AHAA Hispanic Media Allocation & Impact on Total Market Revenue Growth Study Series -Financial-Insurance Services & Auto Sector
Context, Author & Sources
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.
Methodology
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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
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• 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
Eng Media AdSpend Hisp Media AdSpend
Millions
Financial-Insurance Sector AdSpend &
Allocation by Media Type
$352M
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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 Series7
• 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 lead in AdSpend.
State Farm, Wells Fargo, Nationwide, Allstate rank in Hispanic Best-In-Class allocation tier.
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Hispanic Media % of Overall AllocationHispanic Media Ad Spend $ ( Millions)
AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series
B-I-C
Leader
Avg. Hisp Media
Allocation
Follower
Laggard
On-the-Sidelines
Above Avg.
AdSpend
Below Avg.
AdSpend
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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
AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series
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
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Why Should Financial -Insurance Services
Companies Care About
Hispanic Dedicated Allocation?
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)
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R2=0.2242
Y=0.9097X + 0.0182
A 5 point AdSpend allocation shift from English to Hispanic
Media in the Financial-Insurance Services sector results in a Total Market
revenue boost of 6.4 points in Revenue CAGR.
Linear regression: y=0.9097x + 0.0182, R2=0.2242
All findings discussed in the presentation are statistically significant at a 99.9% confidence level or better.
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 + 0.1036; R2=0.1331
All findings discussed in the presentation are statistically significant at a 99.9% confidence level or better.
A 5 point AdSpend allocation in Hispanic Media in the
Financial-Insurance Services sector results in a Total
Market revenue boost of 3.1 points in Revenue CAGR.
As comparison, in CPG there is also a positive strong correlation between allocation shifts from English to Hispanic media and TM revenue growth,
but the lift for every 5 points of Hispanic media allocation change in such a competitive field already allocating at higher levels seems lower.
Change in Hispanic Allocation and Revenue Growth
Change in Hispanic Ad allocation (2010-2014)
Rev
enu
e g
row
th (
2010
-201
4)
13All findings discussed in the presentation are statistically significant at a 99.9% confidence level or better.
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%
On average, a 5% shift in allocation from English media to Hispanic media would generate a 1.75% acceleration in U.S. revenue growth rate.
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 6 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 1.75% increase in annual revenue growth rate.
14AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series
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$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.
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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
Automotive Category (Auto Manufactures, Auto Dealers, Auto Repairs) Among Top 500 US Advertisers
AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series
+156%
2014
$411M
+2.6x
2010
+4
points
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
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Automotive: 2010-2014 Hispanic Media AdSpend & Hispanic Media Allocation Change
Ch
ang
e in
His
p A
d S
pen
d
AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series
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
A 5 point AdSpend
allocation shift from
English to Hispanic Media
in the Auto sector results
in a Total Market growth
revenue acceleration of
8.9 points annually.
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
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Linear Regression: Y=0.2205X + 0.0778; R2=0.0973All findings discussed in the presentation are statistically significant at a 90% confidence level or better.
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 9 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.
19AHAA 2015 Hispanic Media Allocation Impact on TM Revenue Growth Study Series
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*
20All 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
Other Drivers of Growth
* 2010-2014
** 2006-2010
70%
30%
Tech-Telecom-Entertainment
Hispanic Marketing
Other Drivers of Growth
CPG ManufacturersCPG Retailers
Top 500
2010-2014 Nielsen Monitor Plus data; Santiago Solutions Group analysis & interpretation for AHAA: The Voice of Hispanic Marketing21
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%
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Measuring The Impact of Effective TM Strategies
Both Phases will have two tests, one among CPG/Retail marketers, and another among Service categories.
Phase Atest Effectiveness & Impact based on which TV/Digital
campaigns followed the TM consensus definition.
Phase Btest the Relevance of spots
by measured Impact to gauge the weight of Cultural Relevance in effectiveness.
Next From AHAAGetting Total Market Right
Measuring our Definition Measuring Role of Relevance