Any big box retail chain executive will tell you that the Hispanic consumer is crucial to future growth. So finding the right way to connect with Hispanics through advertising and public relations activities is a top priority.
Print advertising FSIs (free standing inserts—promotional pieces loosely inserted into a newspaper or magazine and Run off Press advertising) and direct marketing (either through direct mail or increasingly via the Internet) are popular ways to drive traffic to retail stores. Portada® asked industry analysts to share their views on these marketing vehicles.
Dan Austin, president of BlackSheep Miami says the choice between FSIs and direct marketing depends on the industry. “The lower the ticket, the more likely I am to use FSIs and inserts. The higher the ticket, the more likely we can segment demos and psychos and afford higher cost per piece to a lower number of people, as well as produce quality communication that explains product attributes and how they translate to consumer bene- fits.” BlackSheep Miami’s clients include Voy Communications, Saf-T-Pay, American Express Global Networking Services, Oracle, Miller, and Lending Tree.
Austin points out that direct mail targeting Hispanics can work for any product, but explains that it is better suited for companies with direct sales channels, or for a longer and more complicated sale where a combination of rational and emotional sales points are needed to convince a prospective customer to take action.
According to Vincent Andaloro, president of St. Louis, Missouri, based Latin-Pak, “FSIs traditionally are best for box stores, telecoms, CPG’s, and similar products. While direct mail lends itself more to the credit card mailer, insurance companies, cable, satelites companies. Not to say some of these companies may utilize both products simultaneously”.
Nicole Kelly, assistant product manager for Hispanic co-op FSIs at Valassis, says both newspaper FSIs and direct mail can have a significant impact on shopping behavior. “FSIs and direct mail have been used together and can complement each other’s strengths. The marketing channel that is used depends on the objectives of the marketers and the expected results in a given context.” Valassis’ Hispanic coop FSI, which is inserted in leading newspapers throughout the country, has a specific retail-focused program called Retail Connection®.
Valassis is currently getting ready for its fourth yearly Hispanic co-op FSI program. It will run eight times in 2006 inside over four million papers in 25 of the top Hispanic markets. Other companies including Papel Media, Ethnic Print Media, American Multicultural Media, Latino Print Network, Latin Pak and Newsamerica Marketing run similar programs.
Dan Austin of BlackSheep points out that free standing inserts are better when image and prestige are less critical since advertisers have less control over quality and reproduction when the medium is so massive. However, FSI advertising does work well when lengthy copy, a story or pricing needs to be explained.
WEEKEND EDITIONS OFFER MORE OPTIONS FOR RETAILERS
Newspaper publishers targeting Spanish-speaking audiences have been expanding their weekend editions. One of their main goals is to offer retail advertisers more opportunities to advertise, particularly through targeted (zoned) preprint delivery. Last fall, Hoy expanded its Los Angeles edition through a product called Fin de Semana, a highly targeted saturation publication delivered primarily to homes in densely populated Latino areas of Los Angeles, San Fernando Valley, Inland Empire and Orange County. The publication will initially be distributed to 200,000 homes, with a plan to increase in 2006.
IMPROVED ZONING CAPABILITIES
Last year, Impremedia, publisher of New York’s El Diario/La Prensa, Los Angeles’ La Opinion and Chicago’s La Raza, introduced The Domingo Network, a network of micro-targeted, home-delivered Hispanic publications reaching over 650,000 Hispanic households in the Los Angeles, Chicago and New York markets. By offering targeted FSI advertising in different zones, Impremedia executives told Portada® that they expect to see growth in national retail, telecom, and financial categories. “Because each publication will have five or more zones, we can offer local advertisers targeted low-cost advertising programs.”
In Los Angeles for instance, the Domingo Network reaches 255,000 households every Sunday in five high density Hispanic zones-San Fernando Valley, Huntington Park, East Los Angeles and Montebello/El Monte.
Custom publications, direct mailed to Hispanic households can also be an efficient way to promote a brand. Walmart publishes Viviendo, a quarterly bilingual publication with a circulation of 500,000.
According to Austin, “we have gotten good responses on all our campaigns, so all groups are appropriate targets for direct mail, with caveats of course. We’ve found Hispanic response rates (meaning for Spanish-dominant Hispanics) are higher, perhaps due to less mail received, less burn out, etc. Bilingual Hispanic response rates are only slightly lower. In the end, it is still list quality, offer and creative in that order, with successively higher rates for each.”
According to Nicole Kelly of Valassis, coupons are generally a good way to increase response rates. “Aside from a specific program, coupons are always a great way to give consumers a call to action and truly drive volume. We are constantly working with our newspaper partners to make consumers aware of newspaper inserts and promote coupon usage.” According to Kelly, direct mail is a good tool to reach and retain loyal consumers. “You can also grow your incremental business with non-buyers by using direct mail.”
DEPENDING ON THE TRUST FACTOR
“Trust” in the product and in the purchasing process is particularly important when targeting first generation Hispanics. Dan Austin says that response rates can be high but, depending on the product, there can be an intermediate step or two when it comes to targeting less assimilated Hispanics who may distrust the USP (United States Post Office) or the offer and need more education on the service or sales process before consummating the deal (i.e. mortgages or insurance versus something simpler like credit cards or pre-paid cell phones).
THE INCREASING IMPORTANCE OF THE INTERNET
BlackSheep Miami’s Dan Austin says the Internet is an extremely important marketing tool. “Our experience is that Hispanics of all socioeconomic levels, generations and language preferences are using the Internet at a bare minimum to investigate and educate themselves and help make product choices clear to them,” explains Austin. The longer a consumer has been in the country and the more assimilated he or she is, the more likely to make transactions online. Less assimilated Hispanics are more likely to have security fears or misconceptions (even about a virtual sale, because they want physical proof that the company really exists). “We have seen lots of online transactions, even by Spanish-dominant Hispanics— especially where friends and family have had good experiences. It’s all about trust,” says Austin.
In the general market, many retailers are looking to cross promote their Sunday circular FSI advertising on the Internet. It is only a matter of time before the same thing happens in the Hispanic market. So far, online coupons targeting Hispanics have not really taken off.
Latin-Pak’s Vincent Andaloro notes that “at Latin-Pak we offer emails which we normally use for a client that is utilizing one of our other services like FSI’s, direct mail, or door to door. One recent email marketing campaign we performed had an amazing opening rate of 4.5% however then those who clicked through were lower at 3% then those that ordered ended up being less than 1%. Each campaign is of course different and unique to itself but this expamle shows people will click once maybe twice but they seem to leave. With mail as they open it we are not asking the end user to keep doing more but just read and act. This is why it is important to utilize several or at least two print mediums to deploy an advertising message.”
How large are the ad budgets?
A considerable portion of the marketing budgets of many national retailers goes toward advertising to the Hispanic market. According to CMR data (collected between January and December 2003), national retailers like Pep Boys Manny Moe & Jack, Sears Roebuck & Co, and Autozone were investing more than 20% of their total advertising budgets in Hispanic marketing. Publix Supermarkets Inc. (12.5%), Rent-ACenter (9.7%) and Walmart Stores (9.4%) also put sizable sums of money into Hispanic campaigns. Except for Publix Supermarkets, where Hispanic print accounts for 40% of the Hispanic budget, most of these retailers invested the majority of their Hispanic budgets in TV spots (Pep Boys Manny Moe & Jack spent 98.3% of their Hispanic advertising budget on TV, Sears-96%, Autozone-99.8%, and Walmart- 96.9%). For most other national retailers, Hispanic advertising was almost non-existent in 2003. Polo/Ralph Lauren invested only 0.7% of their overall ad budget in Hispanic media; Saks spent 0.7%, LVMH (0.7%), Mattel Inc. (0.4%), and Circuit City Stores (0.4%).
For more information: Check out www.portada-online.com
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• Big box retailers only give pocket change to Hispanic print
• What you should know about the Spanish-language FSI market