In the Hispanic market yellow is red hot

They might be less exciting than newspaper and magazine publishing, even boring from an editorial and creative standpoint, but Yellow Pages, which earn a total market volume of more than US $14 billion, are nothing to yawn at.

Yellow pages are cost effective for advertisers. And, because Hispanics are much younger than the overall U.S. population, Yellow Pages sections like real estate, mortgages, employment agencies, education and home improvement have a particularly high growth potential in the Hispanic market. Robert Armband, publisher of Chicago's La Raza newspaper, as well as director of Hispanic Yellow Pages of America (HYPA), tells Portada® that the cost of a half page advertisement in La Raza>Paginas Amarillas (circ. 180,000, semiannual) and for La Raza newspaper (circ. 194,000, weekly) is the same (CPM US $21). “But, there is an important difference,” Armband explains. “Yellow Pages have a shelf life of 6 months, a newspaper's shelf life is about a week.”

Large newspaper publishing companies, independent companies financed by private equity and telecommunication firms are all vying for valuable Spanish-language Yellow Pages properties.

The consolidation game

Chicago based HYPA (Hispanic Yellow Pages of America) is one of the main consolidators of US Hispanic directories. Hispania Capital Partners, a private equity house, and La Raza publisher Robert Armband are among its main shareholders. HYPA plans to centralize all production and administration in Chicago. It recently acquired Páginas Amarillas de Colorado (PAC), a Denver Spanish-language Yellow Pages directory, HYPA's second acquisition following Chicago's La Raza Páginas Amarillas in April.

Unlike the Hispanic newspaper market, which has many well-established properties spread throughout the U.S., the Spanish-language Yellow Pages market is still in an early stage of development. La Raza's Armband notes that it is “difficult to find quality Spanish-language Yellow Pages.” Regarding HYPA's expansion strategy, Armband says, “We are not opposed to joint ventures with newspapers or general market Yellow Pages publishers.” Armband says content is key to HYPA's strategy to attract customers. “We provide a book with 100 pages of reference information [immigration, education, other services].”

Spanish-language Yellow Pages advertising is mostly local. La Raza-Paginas Amarillas has an advertising revenue breakdown of 90% local/10% national advertising. However, Mr. Armband expects national advertising to increase by 10-15% as HYPA expands into a national network.

Companies backed by financial investors, like Cobalt Publishing LLC, a subsidiary of Louisville (KY) based Cobalt Ventures, are also trying to get in on the action. Cobalt's El Enlace Latino brand owns Spanish Yellow Pages directories in Indianapolis, Louisville, Lexington, Cincinnati and Nashville>

Hispanic Yellow Pages Network (HYPN) is another private equity back-ed company attempting to become an independent provider of Hispanic Yellow Pages directories throughout the U.S. Led by Yellow Pages industry veterans Patrice Listfield and Luis Bermudez, with ABRY Partners from Boston as private equity partner, HYPN has acquired independent Hispanic Yellow Pages businesses in Chicago, Dallas, Houston, Orlando and Tampa.

Here come the telcos

The publishing units of Regional Bell Operating Companies (RBOCs) and other telecommunication companies have also been tempted by the potential of Hispanic Yellow Pages. The number of directories published by these companies has grown exponentially. Verizon Information Services, which published 11 bilingual directories in 2000, now puts out more than 60. Qwest Dex launched a bilingual phone directory last January in Denver. Qwest also publishes Spanish-language directories in Pueblo, Denver, Arizona, Washington state and Texas (Albuquerque) and is considering expanding into other markets within its 14 state service area.

Telcos often use the flipbook design for their bilingual directories. The flipbook reads in English from one direction and in Spanish if you “flip” it and start from the other side. These bilingual directories are distributed in neighborhoods where the Hispanic penetration is 50% or higher. Publishers of Spanish-only Yellow Pages claim that Hispanics don't like flipbooks. “They are very proud people. They don't want to be in the back of the book. They want their own books,” explains one critic. SBC Communication Corp.'s Pacific Bell is one of the few RBOCs that publishes Spanish-only Yellow Pages, including eight in Southern California.

While telecommunication companies have deep pockets and good publishing infrastructure, Spanish-language newspaper publishers do have some advantages over telcos when it comes to distribution. Like newspapers, most Yellow Pages are home-delivered. Weekly Spanish-language newspaper distributors get information every week that helps them fine tune distribution. Yellow Pages publishers, however, only get this information twice a year. Their more immediate and continual feedback gives Hispanic newspaper publishers an edge over the competition when entering the Yellow Pages market.


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Editorial Staff

Portada Staff

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