Latino Boom!

1. Latino Boom! Everything you need to know to grow your business in the U.S. Hispanic market

2. The Perfect Market • Fastest growing • From 1990 to 2000, Hispanic population grew by 57.9% • United States population increased 13.2% • Estimated 41+ Million Hispanics in the U.S. today • Adding Puerto Rico = 45 Million • African Americans = 36 Million, or 13% • Grows 5x faster than the general market • Will account for 46% of population growth from 2000-2020 • Grows by 1 MM persons each year! • Latino population is highly concentrated • 50% live in California & Texas alone! • Urban areas

3. The Perfect Market • Getting Younger • Latino Baby Boom = 20% of all births • 20% of all teenagers • Hispanic teens will grow 62% by 2020 • Overall teen population will grow by only 10% • In 2000, 35% of all Hispanics were under 18 • 50% are under 34! • Median age for Hispanics (25.9) is almost 10 years younger than that of the overall population (35.3)

4. The Perfect Market • HH Income • Median Income still lags behind U.S. average: • $34,670 versus $43,570 in 2000 • Source: Synovate • US-born Latinos are faring better than foreign-born • In 1998, 42% US-born Hispanic HH’s had reached the middle class vs. 60% of Non-Hispanic Whites • Source: Thomas Rivera Institute, 2000 • The percentage of Hispanic Households earning $50K+ is expected to increase 50% by 2005

5. The Perfect Market • Buying Power • Hispanic buying power has been growing twice as fast • From 1990-2009, Hispanic buying power has grown at a compound annual rate of 8.2% vs. 4.9% for non-Hispanics • Since 1990 Hispanic buying power has grown 347% • Will reach $992 Billion by 2009 • Will account for 9% of the nation’s total, up from 5.2% in 1990 Source: Selig Center for Economic Growth

6. The Perfect Market • Hispanics are not a race, they are an ethnicity • New Multicultural Mainstream: • In 2000, 83 MM minorities spread across the country • Each minority has concentrations in different urban areas • Combined buying power of racial minorities has increased 242% since 1990 (Black, Asian and Native American) • Will reach more than $1.5 Trillion by 2009 • Account for 14.1% of the nation’s total buying power • African Americans will account for 62% or $965 Billion • By 2050, fifty percent of the US population will belong to a racial or ethnic minority

7. Media Habits • Latinos are heavy media consumers • Watch more TV than any other group • 57 hours vs. 53 hours a week • Univision dominates in Spanish (80 share) • Most watched English-language channels • Discovery, UPN, Fox, WB, ESPN • Majority consume media in both languages • 53% read Spanish-language magazines • 63% read English-language magazines

8. 10 mistakes you should avoid 1. Do not make assumptions • One size does NOT fit all • Minorities represent 23% of total population • How do you define your target market • Celebrity Magazine example • Target = women 35-55 • Define “celebrity” Univision vs. mainstream • Define “gossip” Hola vs. People • Jeans manufacturer example • Translations don’t work • “vuele en cueros” campaign

9. 10 mistakes you should avoid 2. Don’t launch a product with out doing your own research • Chevy Nova example • “No va” = it doesn’t work! • Limited research exists on Hispanic market • Question reliability of what does exist • How were the “Hispanic” panels defined • Language preference, HHI, location, length of residence • Cultural prejudice or ignorance • We are different in many ways: Family values • Over-index Groceries, Fast Food, Clothing, Cars, Travel

10. 10 mistakes you should avoid 3. Don’t enter the market without making a commitment • If not, you will FAIL! • Don’t “test the waters” • Hispanic market is larger than Canada! • Give your project enough Time and Money • Long term growth vs. short term gain • Hispanic consumer market is fastest growing • 1MM+ new consumers a year! • TV Guide en español example

11. 10 mistakes you should avoid 4. Don’t forget to get your message out • Don’t make assumptions about what people “know” • All product launches must be treated as “new” • Do a Public relations campaign • Hire a Hispanic media expert • Give your launch enough time to create a buzz • Hire a Hispanic Agency • To develop appropriate new creative • Media Planning and buying • Don’t forget alternative media and grassroots marketing • Latin Pak, Carmen’s Cupones, Mobile marketing

12. 10 mistakes you should avoid 5. Don’t dilute your brand • Brands have a life of their own • Does your brand have equity in the U.S. Hispanic market? • Don’t experiment with your brand • Lack of knowledge and respect for this market • Brand “aliases” in Latin America? • Pampers in US = Dot Dot in Spain • Global economy = global brands • Latin American brand may be better than “en español” • Latin consumers are loyal but not stupid

13. 10 mistakes you should avoid 6. Don’t be fooled by a surname • Hire a “real” Hispanic expert • The “professional” Latino vs. the Latino professional • Does s/he have the right experience? • Worked in the US Hispanic market is very different than work in Latin America • Knowledge of Spanish language and culture is important • It can be correct but does it make sense? • If you can’t judge, ask someone who can.

14. 10 mistakes you should avoid 7. Don’t forget to educate management • Debunking Latin myths and stereotypes • Get upper management involved early on • Manage expectations for results • Create proper metrics for ROI • Minority projects are held to higher standard • Understand needs to keep things moving forward • Educate, Educate, Educate • Pass along articles, research, etc. • Get them involved in events, meet the community • Make them look good

15. 10 mistakes you should avoid 8. Don’t assume Latin projects cost less • Industry misperception of the reach of general market • #1 TV/radio stations in NY, LA and Miami are Hispanic • 1999 FCC study : $1/General market • .78 minority format, .71minority- owned & format • Market fragmentation works in favor of minorities • To do the job right, it should cost more! • Bilingual talent • You get what you pay for • TV Guide en español example

16. 10 mistakes you should avoid 9. Don’t treat the market as a “quota” • Who is consuming your product? • If you don’t have the right human capital in house your sales are likely to be affected. • Are your communication touch points set up to handle needs of your consumers (customer service, billing) • Avoid ghettoizing once you hire minorities • Tokenism still exists • Is it a good story/show/product? • People en español example

17. 10 mistakes you should avoid 10. Don’t assume you know celebrities • The problem with Hollywood Latinos • They have little to no recognition in the community • Jimmy Smits / Wilmer Valderrama • Hispanic TV stars are eager and easy to work with • The problem with crossover artists • They loose their Latin appeal unless they stay connected to the community: Shakira, Ruben Blades, Enrique • The Problem with Spanish language celebrities • Nobody knows them in the mainstream: • Don Francisco, Myrka de Llanos, El Gordo Molina

18. Market Trends • Growth of Latinos in non-traditional areas Growth of Hispanic population in mid-western states 1990 -2000 State Hispanic Pop. 1990 Hispanic Pop. 2000 % Increase Minnesota 3,884 143,382 166% Nebraska 36,969 94,425 155% Iowa 32,647 82,473 153% Indiana 98,788 214,536 117% South Dakota 5,252 10,903 108% Wisconsin 93,194 192,921 107% Kansas 93,670 188,252 101% Missouri 61,702 118,592 92% Illinois 904,446 1,530,262 69% North Dakota 4,665 7,786 67% Michigan 201,596 323,877 61% Ohio 139,696 217,123 55% Source: U.S. Census Bureau, Forecast Analysis; American Demographics FORECAST, April 21, 2001.

19. Market Trends • Growth of Latinos in non-traditional areas • Immigration is “easier” in non-traditional areas • Clusters of people from same family/region • New York’s Mexican population (Puebla) • States with Manufacturing, Farming, Service Industries • Jobs that don’t require much English competency • Increase in immigration from unstable Latin American countries • Wealthy, educated Hispanics in larger urban areas • Miami, New York, LA, San Francisco • Ripple effect: Central & South Americans • Service industries: Nanny’s, maids, etc.

20. Market Trends • Corporate America wakes up! • Demand for ways to efficiently reach (make $) from the Hispanic consumer • Today’s market leaders may not stay on top • From 2000- 2004 advertising directed to Latinos in the U.S. grew 87% from $658MM to $1.23B • Need to create advertising in both English & Spanish • Increased development of English-language media vehicles • Reaching Acculturated Hispanics will be key

21. Market Trends • Media revolution • General market acquisitions of Spanish-language media will revolutionize the Hispanic market • NBC acquires Telemundo in 2002 • Sale of Univision? • Need for a Latin TV hit (a la “Cosby”) • Cable may lead the way • Brother’s Garcia, Dora the Explorer - Nickelodeon • SiTV launches in 2004

22. Market Trends • Media fragmentation • Basics will not change • 18-34 key demographic • Demo will be more Hispanics than ever before! • Niche marketing will rule! • Need to develop integrated marketing tools • The comeback kid: the Internet • The growing importance of consumer control • Broadband, satellite, telephone