Media buying preferences: Does minority ownership matter?

With the vast majority of Hispanic TV and radio outlets in the hands of corporations, print media may very well be the last bastion of Hispanic owned media. According to Portada® analysis of the ownership of the 301 largest publications targeting Spanish-speaking audiences, 203 or 67.4% are owned by Hispanics, while 98 or 32.5% are non-Hispanic owned. Even though there are more Hispanic owned publications, the highest ad revenues are generated by publications not owned by Hispanics.

Only seven (Hispanic Business, Vista, Futból Mundial, Selecta, Ocean Drive en español, Sobre Ruedas and Estylo) of the top 25 Hispanic magazines (by ad-revenues) are owned by Hispanics. According to HispanicMagazineMonitor, these seven Hispanic owned magazines accounted for US $19.48 million in advertising sales in 2004, only 12.3% of the total advertising sales volume generated by all 25 magazines. Newspapers are no different. Of the top ten newspapers, which according to TNS Media Intelligence had advertising revenues of US $219.5 million for the January-November 2004 period, only two are Hispanic owned (accounting for US $31.5 million in ad-revenues).

Media buyers' perspective…

How important is Hispanic ownership to media buyers? “In general, the quality, verifiability and accountability of a publication are the most important factors as to whether it meets an advertiser's need. If minority/Hispanic ownership results in better quality editorial, it becomes a part of the base process, but minority ownership alone would not overcome shortcomings in the core areas,” says Toni Bell, president of Media Rare, a San Antonio, TX, based media buying agency, which buys print for brands including Audi and the Center for Disease Control.

Most media buyers agree. One Miami based buyer, who preferred to remain anonymous, said that in her 34 year career she has only been asked once by a client whether a publication was 100% Hispanic owned. “To me it's not relevant at all,” she said. “If you analyze the ownership of smaller publications you'll often find that there's a gringo behind them.” She says reach is much more important. “Often as many as 15 community newspapers combined can't provide the reach that Knight Ridder owned El Nuevo Herald can,” she concludes.

Paz Echevarria, associate media director at Del Riveru Messianu-OMD in Miami, agrees. “What I look for is media that is of good quality, and reliable (audited) as a source of advertising for our clients.” Alberto Avendaño, associate publisher of El Tiempo Latino (owned by The Washington Post Co.) says it's pure economics. “A publication deserves whatever it can offer the marketplace.”

Joe Matessa, general sales manager at Chicago's La Raza, who until recently worked as client services director at the newspaper media buying agency Newspaper Services of America (Downers Grove, IL) says that none of the national advertisers he's worked with had a preference as to whether a company was Hispanic owned or not. Matessa says that to “national advertisers who are primarily looking to deliver their message to the Hispanic community, ownership will not have a significant influence. However, he acknowledges that there are some major national advertisers that have initiatives in place to work with supplier diversity that include media buying.”

Supplier diversity

Many large corporations have policies in place to benefit minority suppliers. Does advertising qualify as a supplier diversity service? According to Donna Long, VP of development at the National Minority Supplier Development Council, it clearly does. According to Long, everything is part of supplier diversity as long as a corporation buys it. “In order to qualify for the supplier diversity goal a publication has to be at least 51% minority owned,” explains Long. Supplier diversity policies are designed to help corporations create customers in minority communities. By buying services (e.g. advertising) in minority owned companies, large corporations assume that these revenues will benefit the communities in the form of more jobs, better benefits, and enhanced lifestyles.

To Icy William, corporate supply diversity manager for Procter & Gamble in Cincinnati, media buying is an important part of supplier diversity spending. “We challenge our organization to spend ad dollars in minority owned media.” Currently, 3% to 5% of P&G's advertising budget (the largest in the general and Hispanic markets) is used to buy media in minority/women owned companies. Overall, supplier spending at minority owned businesses will account for approximately 10% of total spending for the fiscal year ending June 2005. “We hope to increase that to 11%,” says William.

William points to the unique advantages of buying media in Hispanic owned outlets. “From a standpoint of cultural awareness, a Hispanic owned company will be able to connect with its audience better through the use of the appropriate language.”

Media buyers in corporations also look at ownership. “We pay attention to it,” says Matthew Spahn, director of media planning at Sears, one of the main buyers of advertising in Hispanic print. “From a diversity perspective, we try to balance all the vendors and people we do business with.”

Bought out

Many Hispanic newspapers are being sold to general market newspaper chains or getting backed by financial investor groups. What were once Hispanic owned businesses, are increasingly becoming part of larger corporations. “For us, it's a problem that many minority owned media are being bought out,” Procter & Gamble's William notes.

La Raza was recently bought out by Impremedia, a group led by the Los Angeles based investment fund Clarity Partners. Joe Matessa, general sales manager at Chicago's La Raza, sees the Impremedia acquisition as a benefit: “As the Hispanic market evolves there needs to be a higher level of sophistication among buyers and sellers of advertising.” Impremedia is now able to provide La Raza with resources that enable them to better serve advertisers. Hoy-Chicago, one of La Raza's main competitors, is backed by Tribune Corp., one of the largest media companies in the U.S. Matessa says that it is important to ensure that La Raza doesn't lose its local community positioning.

Alberto Avendaño, associate publisher of El Tiempo Latino, formerly owned by Hispanic entrepreneur Armando Chapelli and acquired by The Washington Post Co. last year, says that corporate buy outs of Hispanic owned companies lend “the credibility and the resources that allow companies to grow in the economic marketplace and in the marketplace of ideas.” Since El Tiempo Latino came under the ownership of the Washington Post Co. Avendaño has seen increased interest on the part of advertisers.

Avendaño adds that too much emphasis is put on the issue of ownership. “El Tiempo Latino is still an independent Hispanic company. It's written in Spanish and employees are Hispanic. The owner is not Hispanic but the publication still serves the Hispanic community. What is important is how a publication is serving a market and its impact on it.”

Donna Long of the National Minority Supplier Development Council disagrees. When establishing whether a company is Hispanic she is more interested in ownership, than employees.

Local advertisers

Minority ownership is more important to local advertisers. “Community advertisers want to buy media in Hispanic-owned publications,” says La Raza's Matessa. At the local level, Hispanic ownership may be a more important factor than whether a publication is audited or not. “The greatest challenge in growing the number of minority-owned, Spanish language business audits is the tremendous role local advertising has played in sustaining Spanish language publications,” Thomas Oliver, executive director of the NAHP Foundation, recently told Circulation Management Magazine. “For many Hispanic publishers, their revenue has been derived from the communities they serve – Spanish speaking neighborhoods, Spanish oriented businesses and Hispanic issues,” Oliver concluded.


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Editorial Staff @portada_online

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