Analysis: Is Hispanic Media ROI being measured correctly? (Premium Content)

If return on investment of Hispanic (advertising) media expenditures is not measured correctly there is no rational basis for Corporate America to increase its advertising expenditures targeting the Hispanic demographic. This is a crucial point for the development of the Hispanic advertising and media industry. Even in the year in which the 2010 Census is very likely going to show that there are more than 50 million Hispanic in the U.S.

Let’s look at the main discussion points about Hispanic Media ROI Measurement as they were discussed during a recent conversation with Gonzalo Del Fa (photo), Managing Director of Mediaedge Bravo in New York. Gonzalo is also a Portada Editorial Board member.

Media ROI vs. Business ROI

This is the first question to look at. Are we talking about deliverables for media or for the business as a whole? Often there is confusion on what Media ROI and Business ROI means. Media ROI can be measured with media response and brand perception indicators that can be attributed to a particular media vehicle. Instead Business ROI’s depend on concrete objectives: marketshare, sales, profitability etc. They can be evaluated via Key Performance Indicators (KPI’s) (Sales over asset turnover, 10/10 customer satisfaction etc.). KPI’s useful to a Finance Team will be quite different to the KPIs assigned to the sales force, for example. So

Who is a Hispanic Consumer?

The question here is what definition of Hispanic consumer is used. Is it the broad U.S. census definition of whoever calls himself Hispanic? Is it the First Generation, mostly Spanish-dominant, Hispanic? Is it all of them or none?

Can Corporations identify their Hispanic Consumers?

“Very few brands can even identify the Hispanic consumer versus the rest of consumers”, says Del Fa. A retailer, such as WalMart may know who its customers are, for a CPG (Consumer Packaged Goods) company, which sells its products through retailers, it is impossible to know. Obviously if major corporations have difficulties identifying their Hispanic customers it’s virtually impossible to have a correct measurement of the return of media expenditures against the Hispanic demographic.”

Major Retailers Hispanic Media ROI Models are based on where their stores are located

As Del Fa puts it. Hispanics in Harlem, may get a lot of advertising targeted to them. However, many of these Hispanics do not do all their purchases in Harlem, for larger purchases they go to major retailers in other areas like Yonkers. The zip code – proximity based ROI models do not capture this and sales to Hispanics get attributed to general market ad campaigns and not to Hispanic advertising.

In addition the question whether people, in this case, Hispanics buy close to where they work (e.g. Manhattan in New York’s case) or where they live (e.g. New Jersey) is also very important. Most Media ROI models do not reflect that”, Del Fa notes. In his opinion a lot of work needs to be done on a model based on modes of consumption. Del Fa suggests that an ROI model based on modes of consumption will work better. Hispanics tend to have modes of consumption that differ from the general population. Hispanic consumption/purchases can be tracked via monitoring companies such as HomeScan and then be correlated to ad expenditures of media targeting Hispanics.