Franklin Rios, the 41-year-old president of Luminar Insights, was on his way to LAX airport in Los Angeles, California, in August 2013. He was scheduled to catch an evening flight to Atlanta, Georgia, where he would meet with executives from The Home Depot, Inc.
Home Depot had been a regular advertiser with Luminar’s parent company, Entravision Communication Corporation, a Spanish-language media and information services company based in Santa Monica, California, focused on the U.S. Latino population. In the upcoming meeting, Rios planned to discuss Home Depot’s interest in acquiring Luminar’s data-based insights about Latino consumer patterns. Selling insights about the U.S. Latino population to companies like Home Depot was critical to Luminar’s business model, but it was also an important long-term strategic goal for Entravision.
With more than 100 television and radio properties and $223 million in 2012 revenues, Entravision had been serving media and advertising to the U.S. Latino consumer for 17 years. Faced with challenging shifts in the media industry, however, Entravision’s executive team recognized the need to transform the company from a broadcasting group with an advertising revenue model to an integrated information and technology company that would add revenues from sales of analytics and technology services focused on the U.S. Latino markets.
The key idea behind this strategy, crafted in 2012, was to create a separate business unit in which a core capability was using data to analyze consumer behavior among U.S. Latinos and describe how that behavior differs from one region to another, even from one city to another. Television advertisers wanted such detailed consumer analyses of Latino communities, but actually having such information was as yet unheard of among television advertisers. Providing it promised to give Entravision an edge with advertisers who wanted to reach a growing Latino market that had, collectively, more than a trillion dollars in purchasing power.
But Rios had already discovered that many businesses wanted Luminar’s insights about the U.S. Latino market independent of their interest in buying media spot advertising with Entravision. The new business unit had already won such clients as the California Milk Board (the “Got Milk” folks), Nestlé, Publishers Clearing House and General Mills, each of which was paying Luminar to sell them insights about different Latino groups.<