New Years Resolution: Strategize to increase print ad sales
2003 was a banner year for the launches of new Spanish-language dailies. 2004 will test the effectiveness of new business models aimed at attracting national advertisers who have traditionally had a lukewarm attitude toward print media targeting Spanish-speaking audiences.
A new advertising sales network of free weekly home-delivered newspapersis the latest of a number of attempts to attract national advertisers. While the home delivery model is wide reaching, and attractive to advertisers interested in buying weekend FSI preprint ads, critics note that blanketing whole neighborhoods with newspapers can be very risky and cost intensive.
Several other advertising sales networks also sprung up last year, bringing together some of the largest Hispanic publications. Their main goal is to increase revenues from national advertising, particularly in the pharmaceutical, automotive and personal care categories. The logistics of bringing newspapers with diverse formats and publishing schedules together is daunting in itself, but it turns out that's not the biggest challenge these networks face. The efforts of setting up a network will only have been wort while if these networks substantially increase the ad sales of their member newspapers.
The Spanish-language newspaper insert is a way to publish a wide reaching product, while avoiding the conflicts typical of ad-sales networks. Hearst's King Features Syndicate is launching its Diversión weekly insert in 13 major (mostly) general market dailies this spring, following in the footsteps of Vista, a monthly insert published since 1985.
In 2003, many newcomers entered the Hispanic print media market by purchasing existing publications with the help of financial investors. New York's el Diario/ La Prensa was purchased by CPK NYC, LLC, a private investment group led by Los Angeles based Clarity Partners. Hispania Capital Partners invested in the Chicago weekly La Raza. This new trend has increased the value of smaller publications across the U.S. While skeptics concede that purchases of small publications give venture capital backed managers a strong connection with local advertisers, management issues and content quality might be difficult to handle in smaller publications.
Starting from scratch
There are several experienced newspaper managers currently seeking funding in order to create new Spanish dailies or weeklies, particularly in the Southwestern United States. Phoenix, Ariz., with its large Latino population and lack of competing Spanish-language daily papers, might be just the place for one of these new ventures.
Last years launch of Al Día in Dallas-Fort Worth cost Belo Corp. around US $5 million. That figure would have to be multiplied several times for a stand-alone venture without a newsroom, distribution infrastructure or base of advertisers to leverage. It's not surprising that financial investors continue to shy away from financing stand-alone ventures.
Due to their enormous clout in distribution and advertising, major general market newspaper groups still lead the race to capture Spanish-speaking audiences and increase advertising sales. Tribune has made the most headway, including last year's launch of Hoy-Chicago and the imminent launch of Hoy-Los Angeles. Knight Ridder and Belo Corp. have also made significant steps toward better serving Spanish readers – Knight Ridder by converting the weekly La Estrella to the daily Diario La Estrella and Belo Corp. with the launch of Al Día (both in Dallas/Ft. Worth).
While often reluctant to launch stand alone products, large newspaper chains such as Gannett, Hearst (see page 17 of this issue), Journal Register, Lee Enterprises and Pulitzer are developing complementary products, in addition to their main print media outlets, specifically targeting Hispanics. This "ancillary" strategy allows them to keep financial risk low and cross sell advertising from their main print media outlets.
Brand extensions have also been popular among many large magazine publishers (e.g. Conde Nast's Vogue en español [Ideas Publishing Group] and Time Inc.'s People en
español). Critics note that many of these Spanish-language ventures have not yet hit the jackpot in terms of advertising dollars. But believers in Hispanic print media claim that the lack of incentives to sell ads targeting Spanish audiences is the culprit. They say that once stand-alone, well-managed, high quality print media products are established, advertising dollars will follow.
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