Hispanic FSI Market: Growing, But not Quite there Yet

An Evolving Market:

The last few years has witnessed significant maturation of the Hispanic FSI market. As California-based Ethnic Print Media Group’s vice president Trevor Hansen puts it, “The market has evolved a lot. There are many more advertisers stepping up. As Hispanic media auditing has gotten better, it’s drawn more FSIs. We are consistently seeing big retailers like BestBuy and Home Depot placing. In the past year, home delivered distribution has been integral for bigger retailer presence in the Hispanic FSI arena.”

Rachel Stayduhar, media analysis supervisor for Miami-based American Communications Group (ACG), says that this is part of a trend that’s been going on for a while now. “As has been happening for a number of years now, there has been a general shift for newspaper advertisers away from ROP and towards FSIs. If you look at the Sunday insert package in any major Hispanic daily you can definitely tell that many retailers are using this as their primary source of newspaper advertising.”

Dieste Harmel and Partners’ Head of Marketing Edgar Cardoze says that the reason for increased advertiser interest in running Hispanic FSI’s is simple: “FSIs are catching on because the clients are getting better redemption rates than they have in the past.”

However, not everybody is convinced that the Hispanic newspaper market has developed sufficiently to warrant heavy FSI investment. Javier Escobedo, CEO of Ole Advertising in NYC, says that one problem with the Hispanic market is that there aren’t any paper’s with a large enough reach to make them attractive options: “There just aren’t any big circulation papers that we can get our hands on. For us, trying to get a one-stop shop is near impossible.” Escobedo also points to demographic reasons why Hispanic FSIs are not the most attractive options: “Particularly for our high end advertisers, it makes more sense to place FSIs in general market papers. The reason is that as you go higher on the Hispanic socio-economic ladder, your target is bilingual and prefer to read in English, as the general market papers are often of higher editorial quality.”

In the Zone…

Of course, one huge factor influenceing an advertisers decision to implement an FSI program with a newspaper is the paper’s ability to zone effectively. EPMG’s Trevor Hansen says that many Hispanic paper’s have made recent strides in this area: “In the last couple of years, particularly in the top-ten markets, we’re seeing more papers that can zone by zip and by zone, and can really isolate a five-mile radius and target around the retail location.”

Rachel Stayduhar disagrees, saying that Hispanic publications need to work harder in this area: “With the exception of a handful of Hispanic newspapers owned by the major dailies and a few other notable exceptions, the zoning capabilities of Hispanic newspapers remains universally poor and limited. The number of Hispanic newspapers offering the kind of zoning options retailers want has not improved enough over the last few years.”

Ole’s Escobedo says that they haven’t looked that far into the zoning capabilities of many Hispanic papers, saying “I’m better off trying to find high-density Spanish zip codes and inserting English-language FSIs for the higher socio-economic audience.”

Dieste’s Edgar Cardoza thinks the truth lies somewhere between the extremes, saying that it really depends on the market one is talking about. “Some newspapers have evolved better than others, adopting better zoning strategies. I’m of the belief that there is always room for improvement in this area.”


Call and Response

As impressed as an advertiser or media planner might be with a paper’s zoning capabilities, what they are most concerned with is consumer response. Depending on the product and the advertiser’s goals, response rate requirements can vary greatly. This is one area in which Trevor Hansen sees room for improvement, saying that FSI “trackability” is not as developed as it needs to be to accurately measure response.

Rachel Stayduhar says that the bottom line is that the FSI needs to drive traffic to the store: “Also, The A/S ration needs to make sense. A/s ratios depend on the category. For instance, in grocery it might be 1% (food has low margins) but a furniture retailer might target 7% (larger ticket items, less frequency of purchase). It is difficult to measure just how much a Hispanic vehicle might contribute to each individual zip code (especially if the retailer is buying other papers in that zip code), but as a whole if the A/S ratio is way out of line in a zip, you might want to cut something.”

Cardoza says one of the biggest factors dictating response is language choice: “You’ve got to go bilingual with these to appeal to the broadest  range of consumers possible. This way your FSI cuts across the different levels of acculturation and meets the consumer on his own terms.”


Coupon Culture?

One obstacle that advertisers must overcome when targeting Hispanics with  FSIs is the fact that coupons are not common in many Latin American cultures. “That’s why you’re better off placing English-language FSI’s in heavily Hispanic zip codes,” says Ole’s Javier Escobedo. “If they are acculturated enough to be comfortable using coupons, they likely prefer to get their news in English. Then you have the added benefit of driving general market traffic.”

EPMG’s Trevor Hansen sees things differently. Asked whether Hispanics are coupon clippers, he responded: “We’ve been researching this about Hispanic consumers. The big thing that stuck out is not that Hispanic newspaper audiences don’t use coupons, it’s that they’re not getting enough. Many of the papers we work with offer eight or nine drops a year, whereas general market papers might have three or four times that many. When we can get the frequency rates up to 25-35, we’ll see Hispanic redemption levels meet and exceed those of the general market.”


Branding…

While FSIs are used mainly for driving traffic, Trevor Hansen says that they can also be good branding vehicles: “FSIs offer great call-to-action, but they also work well for branding because you have image and price point, reinforcing one another. Driving sales is primary, but it also an under-appreciated form of branding.”


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Editorial Staff

Portada Staff

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