Market Intelligence: Where is Growth in 2009? 5 Key Facts You Need to Know

Ah 2009. Among Advertising and Sales Executives the next year brings up some fear. Some media executives predict up to a 40% ad sales decline. Is this also true for the Hispanic market? Not necessarily; in fact, 2009 may turn out to be a big  opportunity. Particularly in the realm of Digital and Print Media.

1. Ad-Categories: Sectors that are Plummeting, Sectors that are increasing Allocations

In Telecommunications, the competition between AT&T and Verizon, and to a lesser degree Sprint and T-Mobile will be the cause for a continued expansion of Advertising by Telcos, particularly in the Hispanic market.

Impremedia’s VP of National Sales Erich Linker says that categories like CPGs, Financial and Telecom have buoyed the company this year and helped them remain in the black. "There's no question  that Q4 is going to be difficult, but I'm confident in our approach," Linker tells Portada. He says that Impre.com, the portal company launched earlier this year has attracted 30 new advertisers.

Big Box retail is the big enigrma. The economic recession certainly is a damper on ad-investment. However, the degree to which Ad spending is going to be curbed will only become clear after the 2008 Holiday season.  Underspending in the Hispanic market, even more so in online advertising, may help 2009 big box Hispanic Retail Advertising spending. Danny Allen, president of online ad network Ad-Mixture notes, "I think big box retailers will continue to increase their online ad spend in the Hispanic online market because of online marketing's core strength - measurability.”

Detroit's near death rattle is causing the plummeting of Hispanic and general market Auto Advertising. However, foreign carmakers (e.g. Volkswagen see below) are increasing their expenditures in the Hispanic market. According to Impremedia's Linker automotive investment is down for Impremedia's properties, though he did not choose to say by how much. Linker tells Portada that although spending is down, dealers still have money to spend, and Impremedia is therefore trying to accommodate them with innovative ad-packages.

Portada recently consulted some top industry insiders on their growth forecasts for 2009.

Table 1: 2009 Advertising Growth Forecast per Category

Categories

Paul Suskey

Jose Villa

Guillermo Plehn (Print)

Automotive

0% to 5%

0%

0-10%

Apparel

0% to 5%

0%

0% to 5%

Alcoholic Beverages

0% to 5%

10% plus

5% - 10%

Financial

0% to 5%

0% to 5%

Flat to 20%

CPG

5-10%

0% to 5%

5% to 10%

Restaurants

0% to 5%

0%

0% to 5%

Retail

5% to 10%

0% to 5%

0% to 5%

Telecommunications

5% to 10%

10% plus

0% to 5%

Travel

5% to 10%

0 or negative

0% to 5%

Media

5% to 10%

0% to 5%

0% to 5%

Home Furnishing/Home Improvement

5% to 10%

0 or negative

0% to 5%

Source: Portada
Note: Job Titles:
Jose Villa, CEO Sensis
Paul Suskey, Co-founder Media 8
Guillermo Plehn, Commercial Director Televisa Publishing

2. Some Large players increasing their allocation
Portada just heard that AT&T is increasing its Hispanic allocation by 25% in 2009 (from $125 million to close to $160 million); a substantial part of the increase will go online, while the majority of total expenditures will go into TV. Print advertising will be mostly dealership driven. In the retail energy sector Shell is increasing its allocation, so is Chevron-Texaco. In automotive, contrary to the heavy ad spend declines of Ford and General Motors, Volkswagen, (whose Hispanic agency is Media Edge) is increasing  its Hispanic market allocation. It is precisely in tough times when some companies/brands can make a difference by outspending the competition.

 

3. Digital: Room for growth
Despite a challenging economic background, Portada expects the Hispanic online advertising market to grow by at least 20% in 2009. While Travel, Finance, retail and Automotive are going to be down to stable, Telecommunications, CPG, beverages and other categories budgets are increasing allocation online in a significant manner. In addition, the scarcity of content targeting Hispanic audiences still awards a premium in pricing vs. general media.

Table 2: Growth of the Hispanic Online Advertising Market 

Year

Sales Volume

2007

$160 million

 

2008

 

$180 million

2009

 

$216 million

Source: Portada estimates
Note: 2009 Growth rate: 20%



4. Catch up potential of Search
Search amounts to almost 50% of general market advertising expenditures. In the Hispanic market that proportion is lower. As Danny Allen, president of online Ad Network Admixture, says,  “Hispanic marketers do not do nearly as good a job of search marketing as they do in display. Search in the US Hispanic market is catching up and will eventually be larger than display, but it doesn't seem to be yet. Hispanic ad agencies with online search experience will be way ahead of the game.”

5. Integration with General Market Properties
The integration of general market and Hispanic market properties may also provide a source of growth. One such example may be yesterdays announcement of the purchase of Boston´s El Planeta by Phoenix Media.  As Bradley Mindich, President of Phoenix Media told Portada: "Everything is sold in a converged way here at Phoenix media," Mindich tells Portada, adding that the company tries to involve its advertisers in as many of its five platforms- Print, Radio, Online, Mobile and Events-as makes sense. Mindich says he sees promise in Alcohol companies wanting to reach out to Hispanics through El Planeta.

Related Article: The Crystal Ball: 2009 Growth Forecasts


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