Hispanic and Economic Growth Align in the Lone Star State
Texas is the second largest state in terms of population and GDP (both after California). As importantly, Texas has the strongest growing economy of all big states. According to the Bureau of Economic Analysis (BEA), the Texas economy grew by 4.8% in 2012 mostly fueled by oil and mining driven businesses but also by professional, leisure and hospitality services business. Texas was the state registering the highest growth rate after North Dakota.
There are over 26 million Texans and more than 38% of them are Hispanics (more than twice the national average). More interestingly, Hispanics are expected to outnumber Whites within the next decade. The political, cultural and economic future of Texas is tied to the high growth rate of its Hispanic population. In fact, political observers note, the time when Texas, traditionally a “red” state, will get a Democratic political majority may not lie that far ahead. Hispanics, although typically less active voters than Whites predominantly favor Democrat political representatives.
The opportunities presented by Texas’ economic and Hispanic growth for the advertising and media markets are huge. Because of this feature of the Texas market, many national marketers often activate their product launched in Texas first, especially when Hispanics are one of their main target consumers. A reason for this may lie in the fact that Texas media is relatively cheap compared to most other U.S. markets. “From a media point of view, the first thing that comes to mind when comparing Texas to other U.S. Hispanic regions is that it is very efficient from a media cost standpoint. Texas media rates tend to be lower than in California, New York or Florida etc...” says Jennifer Leonard, Media Director at Hispanic Advertising Agency Dieste in Dallas.
Half of the initial production of Chevy’s (GM) new 2014 Silverado truck was provided to dealers in Texas. Texas pickup sales are especially lucrative. About 40% of Texas Silverado buyers choose the Texas Edition of the Silverado, an option that comes with a $2,000 premium. It includes a Texas Edition badge on the Silverado, chrome accents and 20-inch wheels. Tim Mahoney, global CMO for Chevrolet says that Texas is job one for the Chevy Silverado campaign because Chevrolet has Silverado inventory in showrooms there already, not to mention the fact that Texas is state number one for pickups. “One in six people own a pickup truck in Texas,” he notes. “Our biggest truck dealers are in Texas; they get trucks first."
Maria Rohrer, Director of Marketing and Strategy, Chevrolet Trucks tells Portada that she has focused a lot of her marketing efforts in Texas. “We are advertising heavily in that market and began the campaign there two weeks before the national launch. We will also be present at general market and and Hispanic events throughout the state.”
In October Crown Imports announced that it is introducing a drink with traditional Mexican ingredients: Modelo Especial Chelada. The Modelo Especial Chelada was made available at retail locations in Texas, California, Nevada, Arizona, New Mexico, and Chicago. It is scheduled for national release in the first quarter of 2014. Modelo Especial Chelada is supported by National Spanish-language TV which has already begun airing on targeted Hispanic networks in a mix of entertainment and sports programming, including broadcasts of the MLB World Series on Fox Deportes. Jim Sabia, CMO of Crown Imports, tells Portada that the “locations where Modelo Especial Chelada is being made available first represent a high concentration of current Chelada drinkers and drinkers of Modelo Especial. These locations also make up a large portion of the Hispanic population in the U.S.”
Targeted Local Content
Texas also has some more diverse Hispanic markets than many advertisers realize, Dieste’s Leonard notes. “You have very acculturated DMAs like San Antonio and more traditional populations in Dallas, Houston, etc. Houston is also more international than people realize. Texas is the heart of the Tejano radio format of course. Also, being a border state comes with its own set of differences and issues in targeting, shopping habits...” Leonard adds.
In what way do Texas Hispanic targeted media properties differentiate themselves from offerings that target the English-language population? Daniel Cavazos, publisher of The Brownsville Herald and of the paid Spanish-language daily El Nuevo Heraldo in the Rio Grande Valley seems particularly suited to answer the question: "The sports and entertainment content of our English and Spanish dailies are quite different," Cavazos notes. "The Herald focuses on local high school sports of all varieties, along with U.S. professional and college teams. El Nuevo Heraldo’s sports content is much more soccer-oriented – both with the professional stars/leagues from Mexico, and the local soccer scene. Entertainment content in El Nuevo is focused on Mexico/Latin American artists with The Herald’s content focused on U.S. media. We have some original local reporting in Spanish on topics that aren't often fully addressed on The Herald side and we judge to be of more interest to our Spanish readers. There is also translated content from our English dailies in the Rio Grande Valley into El Nuevo. Our Spanish daily covers the entire region here – from Brownsville to the McAllen area.”
Broad Mix of Hispanic Media Users
More than half of Hispanics living in the Rio Grande Valley are bilingual. A key question is whether Hispanics want to consume content in English or Spanish.
“The language spectrum here is an interesting mix. General bilingual residents usually prefer to read English. Even some more dominant Spanish speakers in some cases prefer reading English, as it can be easier to speak a language than read it in all of its grammar complexities.”
Cavazos adds that the Rio Grande Valley “does have a great many Spanish-dominant residents, be it Mexican nationals who have moved here to invest/start businesses, (and often have U.S.-born children), married couples where one of the spouses will be from Mexico, and we also have many resident aliens who have lived here a long time and still prefer their native language. We also have many naturalized U.S. citizens, the majority of which are from Mexico, and are still Spanish dominant. Mix in more recent immigrants of general types along with many older residents, who are U.S. citizens but have remained Spanish-dominant, and we have a broad mix of Hispanic media users.”
Do Hispanic targeted and English-language media properties owned by the same company reach the same audiences? According to The Brownsville Herald’s Cavazos, “There is some, but not a great deal of overlap. We do have subscribers in our core market who take both dailies, English and Spanish. Over 75% of El Nuevo’s total circulation is Spanish-only readership, be it home-delivery or single copy.”
Dino Chiecchi, Editor of Spanish-language publications at the San Antonio Express News, notes that the San Antonio Express News and the bilingual weekly Conexion (both published by Hearst Corporation) often share content. However, Conexion’s content tends to focus more on a Latino angle and in a different way than the Express-News would cover something. “For example, a recent story on singer Gloria Estefan reuniting with a childhood teacher in San Antonio was reported by a Conexion staff writer who wrote one version for the daily product and another, slightly different, version for Conexion. The version for Conexion put more emphasis on Estefan’s family coming here from Cuba and not knowing the language or culture. The “San Antonio Express News' story had a more general angle, focusing on the bond Estefan and her teacher formed years ago and how the teacher helped her learn English.”
Mercado Billingue is another bilingual publication. Published by Redan Media, it is a bicultural magazine distributed the 1st and 3rd Wednesday of the month and hand delivered to Hispanic households in the Dallas/Ft. Worth area. “With Mercado Bilingue as a mid-week solution and La Estrella as a weekend solution, every week we put our advertisers’ message in front of an audience larger than the attendance at a sold out Cowboy’s game,” says Brent Murphy, President and Managing Partner of Redan Bilingual Media. Redan partners with La Estrella, a Spanish language mostly home delivered weekly with a circulation of 125,000 published by McClatchy (Fort Worth Star Telegram).
To Penni Barton, publisher of Spanish-language newspaper Al Día and www.aldiatx.com in Dallas/Ft. Worth, there is not much audience overlap between The Dallas Morning News and its sister Spanish-language newspaper: “Al Día is a separate publication from The Dallas Morning News, serving distinct audiences. However, Al Día and The Dallas Morning News collaborate frequently by sharing stories, photos and news packages. While Al Día primarily serves the Spanish-speaking (Spanish-dominant) segment in the North Texas metropolitan area, The Dallas Morning News serves the general market in the area.” Al Día is distributed to subscribers in the main counties in North Texas – Collin, Dallas, Kaufman, Denton and Rockwall and distribution reflects where the Hispanic population lives.
Regarding the website, Barton does not see much overlap in content either. "The bulk of the traffic to Dallasnews.com comes from themes/content areas that are not supported through aldiatx.com (i.e. video, slideshows, topic blogs, etc.). The content on aldiatx.com is different, with about 85% coming from outside of the country. About 50% of Dallasnews.com users are local.” Al Día has a circulation of 100,000 home-delivered on Wednesdays and 100,000 home-delivered on Saturday with an additional 25,000 distributed through racks in key areas and retailers.
Are Content Preferences of Hispanics Becoming More Americanized?
“One large segment has become even more Americanized in their content interests – especially in sports and entertainment areas, and general youth culture. The Spanish-dominant resident has continued with a stronger interest in news/sports/entertainment information from Mexico. Both large groups share similar interest in local news and information, with certain topics like, say immigration, of more interest to our Spanish readers,” says El Nuevo publisher Daniel Cavazos.
San Antonio Express News’ Conexion coverage has evolved from having more Spanish content and stories on entertainment to focusing more on local news and stories about local events and people,” notes editor Dino Chiecchi. “Staff writers and editors have received feedback from readers that they want more local news and they want to be able to read about an issue or event in Conexion that affects the local Latino community.” Interestingly, readers also prefer getting their information in English, based on feedback given to staff.
To Al Día’s Barton, “There are some content areas that remain consistent across platforms and generations. These are basic stories on the local and immediate environment, starting with education (local schools,) immigration, health, soccer, entertainment, etc. But, as the Hispanic community settles in an area (Dallas, for example,) their news needs evolve to include more cultural relevant stories, with greater interest in local government issues (elections, politics, etc.) as well as diversifying their interest in the aforementioned content. For example, Hispanics start caring about news on the Dallas Cowboys over time, even when they still care about soccer and news from their homeland. The news offer/demand changes simultaneously to the assimilation/integration process.”
Local Content, a Connection Point Advertisers Love
Most, Hispanic publications in Texas are free. That means that the vast majority of their revenues come from advertising. Advertisers love the fact that most of these media properties have a strong connection with their local communities.
To Jeremy Halbreich, Chairman and CEO of AIM Texas (the publisher of The Brownsville Herald, El Nuevo Herald and Extra), the strong community and local media appeal of many Hispanic media properties is a distinct advantage for advertisers. AIM Texas publishes English and Spanish-language newspapers in the Rio Grande Valley and in Odessa, West Texas. Halbreich says that “we are very fortunate that both Odessa and the Rio Grande Valley are strong, attractive growth markets today and for the foreseeable future. The Rio Grande Valley has a population of between 1.2 and 1.3 million and we cover the market with four daily newspapers – three English language in McAllen, Harlingen and Brownsville and one Spanish language in Brownsville, a large 2X weekly English language publication in Weslaco, a weekly English language publication serving South Padre Island and a large Spanish language weekly publication serving the entire Rio Grande Valley region. The Rio Grande Valley growth is fueled by medical services, education, retail, construction, oil and gas, agriculture and the influence of Mexican nationals.” Halbreich says that Spanish-language advertisers in AIM Texas print and digital properties include Sprint Mobile, Mansi Media, T-Mobile, Gemstone, Colgate, News America Spanish Co-Op, Chrysler, Magnet Media, Boost Mobile and AT&T.
The Strength of Home-Delivery
Another feature advertisers, particularly big-box retail advertisers, like about Texas Hispanic publications is that many of them are home-delivered. Retail advertisers like to reach household purchase decision makers, mostly Latina housewives, at home. Contrary to rack distributed newspapers where inserts (FSI’s) can be lost easily before (and if) the publication reaches homes, home-delivered publications guarantee that the inserts
reaches the reader’s home.
Houston Chronicle’s La Voz, the most widely distributed Hispanic newspaper in Houston, with a Wednesday circulation of 200,000 and Sunday circulation of 230,000 copies also relies on home-delivered circulation to lure retail advertisers. In fact, the newspaper substantially increased its home-delivered distribution last year to better satisfy advertiser demand. Andres Valdez, National Sales Manager at La Voz says that the “FSI business has been very significant in the growth of La Voz in 2013. With the circulation changes that were implemented and the addition of home-delivery La Voz de Houston has grown by 95% in comparison to 2012 YTD with the 4th Qtr. just beginning. “FSI advertisers in La Voz include Smart Source, P & G, Sears, Wal-Mart, Rooms To go, Fry’s and Staples.”
According to Redan Media’s Brent Murphy, Mercado Bilingue was the first publication in the Dallas/ Ft. Worth area to utilize direct distribution to deliver an advertisers’ message directly into the hand of the Hispanic consumer. “A lot of agencies and advertisers are surprised when we tell the story that Mercado Bilingue has been in the DFW market longer than both Al Día and our current partner La Estrella,” Murphy notes. In addition, our direct distribution, sampling and door hanger business has been in operation for over 25 years – that’s reaching a lot of homes.”
Genevieve Flores, general manager of Conexion in San Antonio, tells Portada that the publication’s FSI business is a “very important part of the business.” Most recently we had a grand opening insert from Gander Mountain, they just opened a new location here in San Antonio, Texas. Other retailers that participate in our insert program are Rooms to Go, JC Penney, Conn’s, Sears, Target, Wal-Mart, just to name a few.”
Al Día’s Barton also stresses the importance of the FSI business: “The FSI business contributes significantly to our revenue and is very important both to our advertisers and readers. While digital coupon usage is growing exponentially, many Hispanic grocery stores and retailers, don’t accept mo- bile coupons. Also, printed coupons are key during special retail shopping time frames such as back to school and holiday. According to “Placed Insights, 2013”, during the recent back to school period 46% of parents preferred to receive their promotional offers via print. Our recent back to school advertisers included Wal-Mart and Target who complemented their FSI buy with ROP.” Al Día also distributes Vista magazine, a women oriented national magazine published by impremeMedia.