U.S. automotive companies with Hispanic advertising budgets are slowly increasing their allocation to print media targeting Spanish-speaking audiences. In 2004, the auto industry spent US $20.5 billion on advertising in all U.S. Media. Ad expenditures in Hispanic print media, particularly newspapers, are still very low (see page 15).
Last year, General Motors spent close to US $100 million on ads targeting Hispanics. Ford and Toyota spent approximately US $60 million each. DaimlerChrysler spent close US $50 million. Lagging behind the top four advertisers were South Korean manufacturer Hyundai (US $30 million), followed by Japanese car manufacturers Honda and Nissan US $25 million. All of these companies spent the vast majority of their ad budgets on TV and radio advertising; print was only a small proportion of Hispanic-targeted advertising.
According to the recently released HOT study, commissioned by People en Español and conducted by market research firm Synovate, 37% of respondents said magazines and newspapers have the biggest influence on their car buying decisions. Forty-four percent said TV was most influential and 32% said radio. These figures do not support the huge discrepancy in ad spending between print and broadcast media.
According to 2004 figures provided by Papel Media's ad-tracking service, General Motors spent US $1.6 million on advertising in Hispanic newspapers (during the first five months of 2005 the figure was US $1.29 million). This is only a small drop in the ocean that is GM's annual ad spending, which according to TNS Media Intelligence was US $2.8 billion in 2004. Automotive advertising in Hispanic newspapers is practically non-existent. “There is huge potential in the Hispanic market,” says John Trainor, CEO of the print media buying agency Papel Media.
Automotive is the leading ad category in Hispanic magazines, but lags way behind when it comes to newspaper advertising (Telecommunications is the leading ad category in Hispanic newspapers). Trainor says that the few dollars that automotive manufacturers invest in Hispanic newspaper advertising are typically “politically correct dollars.” He says that newspapers are a difficult buy for agencies. “A lot of agencies don't do a thorough job of tracking newspapers for ad campaigns. Most of them focus on magazines and TV.” Trainor adds that smaller community papers are very powerful and says national ads should be placed there too.
While newspapers get some advertising from car dealerships, corporate brand advertising and national campaigns run by dealer associations rarely use Spanish-language or bilingual newspapers. Because print is a good way to inform buying decisions, it follows that newspaper ads would play a vital role in Hispanic ad campaigns. But the relatively low reach of single Hispanic newspapers—as opposed to a network of newspapers—means most national advertisers are reluctant to make local buys. It is almost impossible for a single Spanish-language newspaper to get a national ad from a brand like General Motors' Chevy.
“Automotive brands like Chevy, Ford, Honda, and Toyota run corporate ads daily in every large metropolitan English-language paper. That does not happen in Hispanic newspapers,” says Shirley Brendlinger, advertising sales manager at Al Día in Philadelphia.
Brendlinger notes that national advertisers, including large car manufacturers, want to make newspaper ad buys in the same way they buy TV or print in the general market (i.e. a national buy on a cost per thousand or CPM). In the general market, Newspaper National Network (85% jointly owned by 23 large newspaper companies and 15% owned by the Newspaper Association of America) pitches a whole network of newspapers to agencies and national advertisers.
“Car manufacturers should be able to reach the top 10, 15, or even 70 Hispanic markets with just one buy at one rate. The newspapers running the ads would be paid varying rates depending on their circulations.” According to Brendlinger, no Hispanic newspaper ad sales network has been able to accomplish this. “There have been some automotive advertising network buys in Hispanic newspapers, but in most cases there is a lack of transparency regarding pricing.”
In order to compete with TV, Brendlinger says advertisers need to be able to buy print in the same way they buy TV. “The mandate is to simplify the buying process.”
Magazines have national reach
The national reach of most magazines make them more attractive to national advertisers targeting the Hispanic market (see page 15). According to People en Español's HOT study, “attributes that influence general market consumers also influence Hispanic consumers when buying a car, but vary depending on the level of acculturation.” According to the study, 43% of Spanish-dominant consumers surveyed said that magazines have the most influence on their car buying decisions – for bilingual Hispanics that figure is 25% and for English-dominant Hispanics its 23%.
A $35 billion plus market
The 40 million Hispanics living in the U.S. make up about 6 percent of the auto market. According to Polk Automotive Intelligence, this number has grown more than 25% in the past five years. By 2020, 12 percent of U.S. auto sales are expected to be to Hispanics. In 2002, Hispanics spent nearly $35 billion on automobiles, making up over 8 percent of the market. “In the last four years, Hispanic buying power in the U.S. has grown by 37%. That's twice the rate of non-Hispanic buying power, which grew by only 19%,” Sara Hasson, vice president of automotive marketing for Univision Television Group, told AIADA (American International Automobile Dealers Association) at the Driving Change Dealer Dialogue series.
According People en Español's HOT study conducted by market research firm Synovate, Hispanics are 14% more likely than the general population to purchase a new car within the next two years.
According to Hasson, Toyota has captured the largest share of national Hispanic purchases, followed by Ford, Chevy, Honda, Dodge, and Nissan. “Toyota is number one in California, Florida, and New York, but when we go to the central states, Chevy is numero uno in Chicago and Ford holds that title in Texas,” says Hasson.