Advertisers Under-capitalize Hispanic Housing Boom

It is imperative. Marketing executives at home improvement retailers and furniture manufacturers
need to learn how to pronounce “casa” if they have not done so already. The housing industry speaks
Spanish more and more and home improvement/furnishing retailers are taking notice. Brenda Storch,
spokesperson for Sears notes, “Sears is continuing to experience strong demand from the Hispanic
market.”  But are Home Improvement Retailers and Furniture Manufacturers buying enough
advertising to really connect to this expanding audience?
 
Advertising expenditures are certainly growing. In 2006, category leader Home Depot increased the 
number of preprints it placed in Hispanic newspapers (Free Standing Inserts or FSIs) in by 33% to
76 Hispanic newspapers. Home Depot is one of the largest FSI advertisers in Hispanic newspapers.
An astounding 90 million pieces of Home Depot FSIs will be placed in the Hispanic market by the end
of this year.
 
There is certainly an increase in the amount of Spanish-language media vehicles that have editorial 
environments fitted for the sector. “The home improvement category is very important to us. We
carry advertising from Moen, Home Depot, ICI Paints, Weber Grills and Elkay Faucets,” says
Filiberto Fernandez, publisher of Casa y Hogar, a bi-monthly magazine (total circ. 993,000) that
is distributed as an insert in many Hispanic newspapers nationwide. In 2007, Fernandez expects
the Home Improvement category within Hispanic print advertising to grow between 15-30%. He sees
strong demand coming from the kitchen category, building materials category, bathroom category
and paint category.  Online advertising is very important and will become more so. According to
Fernandez, many home improvement retailers and product manufacturers will be launching web
sites in Spanish next year.

The potential exists for a huge increase in advertising by Home Improvement retailers/furniture manufacturers in Hispanic print and digital media. Not only did Hispanics account for more than one-third of the total growth in U.S. households between 1995 and 2005, according to a recent report of The University of Notre Dame’s Institute for Latino Studies, but the home furnishings & supplies category is very large for general market magazines and newspapers. Home furnishings & supplies amounted to $685 million of advertising in 2004, or 9.4% of overall advertising. In the general market the “Home” category was the number one category among “Special Interest Magazines,” with $457 million in revenues, according to Veronis, Suhler & Stevensohn Consumer Magazine Database. Home Supplies/Furniture amounted to $ 3.4 billion in advertising for general market newspapers in 2004. It was the third largest retail advertising category within retail advertising, with a high growth rate during the 1999-204 period of 7.6%.

Ad-spending in the Hispanic print and digital media market is still dwarfed general market advertising 
figures.
ROP Advertising as tracked by Portada® Ad-tracking is still very low, even though it has to be said 
that the majority of the home improvement retailers do the bulk of their advertising in FSI (preprints)
and not in ROP. Furniture retailer Ikea only spent $ 2,500 for one ROP ad in Phoenix’s Prensa
Hispana
. (For figures for Home Depot, Lowe and Sears see the box above). National ROP retail
advertising (branding oriented campaigns by large big box retailers, apparel, grocery, pharmacy
chains and electronic retailers) amounted to $19.2 million in 2005 (led by Macy’s with $ 2.95 million),
according to Portada® Ad-tracking.

Dione Brooks, media Analyst at Newspaper Services of America, whose accounts include Home Depot in the Hispanic market, notes that an increase in the number of audited publications as well in their frequency should help increase advertising volumes. “The publications we buy advertising in should have at least a weekly frequency,” she commented. Another obstacle for an increase of ad-spending from the home improvement/furnishing category is that many large companies do not have “Hispanic” (as opposed to general market), ad-sales metrics. Due to the absence of “Hispanic” ad-sales metrics, testing the efficiency of advertising campaigns becomes much more difficult.

While an important part of the advertising and marketing community still has to step up to the plate and enable an increased advertising spending of the home improvement/furnishings category, the demographic evidence is undeniable. As a recent report by the Latino Studies Institute of the University of Notre Dame asserts, “whatever the outcome of current debates on immigration reform, the fact that two-thirds of Hispanic children whose fathers are foreign born and nearly 90% of Hispanic children overall are U.S. born citizens ensures a large and growing Hispanic presence in thousands of communities throughout the nation. For instance, between 1995 and 2005, growth in the number of Hispanic households in Iowa was 311%, and in North Carolina it increased by 401%, accounting for nearly a quarter of the total growth in that state.”

Getting there?
Home Depot 
511
Lowe’s
282
Sears
250
General Retail
19,200
Note: 2005 ROP Advertising in Hispanic Newspapers in $ thousands

Source: Portada® Ad-Tracking


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Editorial Staff

Portada Staff

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