Cynthia Nelson, COO, Todobebe:We are cautious, butto date we have found that the environment has brought our company more opportunities than challenges. Why is that? The opportunities are a result of the segment of the market that we address, how our value proposition is structured for advertisers and media partners, and the stage of growth our company.
As we move into the 4th quarter and 2009, we assume that our assumptions will be further tested. We believe that even for fundamentally strong, debt-free, growing companies that are usually protected in weak economic environments, there are new risks as a result of the credit crisis; it’s an environment where for many companies and consumers, even traditional operating lines of credit are no longer readily available. We address the uncertainties by being focused about our growth, the payment terms we offer, which advertiser and ad agency RFP’s we respond to, and where we invest our best resources.
In terms of the opportunity of our market segment in this economy: Our branded media properties (Todobebé and Viva La Familia) focus on families who are in the life stage of raising children 0 to 5 years old. While Hispanics in the U.S. make up 15% of the total population, when it comes to families with children 0 to 5 years old, the Hispanic market share moves up to 25% of the total market nationwide. In the top 10 urban markets, this share goes up to over 40% on average. The Hispanic market of children 0 to 5 years old is also the fastest growing segment of the population, and equals an estimated $80 billion in consumer spending.
The 0 to 5 segment of the market is not only an important market for children’s brands, and staple brands that fill the weekly family basket, but also for the advertisers who seek to capture new consumers who are entering their market because of a life stage shift (baby/children) that necessitates new brand and purchasing choices. For example, having a baby changes what car you drive, how the rooms in your home are decorated, what you serve for dinner, where you spend your money, what you do with your free time, how many hours you need to work to support your family. We are finding more marketers are looking for messages and storylines that are family oriented, that there is renewed focus on children and the home.
How does the market affect us in 2009? We are conservative, but have found that most Fortune 500 companies have come to the conclusion that they cannot meet their national reach, CPM, and revenue numbers among 18 to 34 year olds with children 0 to 5 in the U.S. unless they are buying Hispanic audiences. The “general market” is dispersed; having fewer babies later, and is expensive to reach. Although we are projecting that the economic challenges will have an impact on purchases, our demographic is already now the largest in urban areas, and that growth trend is permanent, as is the need to capture share and create a formula for long-term growth. The reality is that we are the only multi-media family brand in the Hispanic market that allows for integrated branding and audited reach across all properties.