Kmart's recent acquisition of Sears was not good news for most publishers. With a combined ad budget of more than $1 billion, the new company, destined to operate under the Sears corporate banner, will trail only Wal-Mart Stores Inc. and Home Depot Inc. as the biggest U.S. retailer.

According to Sears and Kmart executives, saving on advertising expenditures was one of the main reasons for the merger. Is the Kmart-Sears deal just the first of many similar deals through which the retail industry will consolidate? How much will print media advertising in general and Hispanic advertising in particular be hurt by this trend? The top 20 retail advertisers spent a combined total of US $1.356 million on local and national newspaper advertising during the first eight months of 2004. During that same period, Sears spent US $90.1 million on local and national English-language newspaper advertising. Kmart spent US $34.4 million.

Compared to other retailers, both Kmart and Sears, particularly the latter, emphasize brand advertising over generating store traffic, meaning neither company focuses on newspaper advertising. National branding campaigns emphasize mostly TV and magazine advertising versus more locally oriented newspapers and direct mail, which tend to focus on creating store traffic (see “Big box retailers give only pocket change to Hispanic print,” page 1, Portada® No. 11, September/October 2004). According to TNS/Media Intelligence CMR, which tracks 65 newspapers targeting Spanish-speaking audiences, Sears was the third largest advertiser (with US $1.58 million) for the January-August 2004 period, behind AT&T Wireless Services Inc. (US $1.81 million) and Rooms-to-Go (US $1.59 million). Kmart was the 13th largest advertiser (US $0.57 million).

Magazines/High degree of concentration…

Further consolidation in the retail sector would not be good news for Hispanic magazine publishers either. During the January-October 2004 period, the top 5 retail department stores (see box) accounted for more than 90% of Hispanic magazines' ad volume, according to figures provided by HispanicMagazineMonitor. Even though ad spending by department stores is very concentrated, it does not make up a large portion of Hispanic magazine ad revenues. Sears was the second largest retail advertiser in Hispanic magazines after Wal-Mart, according to HispanicMagazineMonitor. Kmart was ranked number 15 with only 0.2% of the total advertising dollars spent.

Wal-Mart leads the pack


Ad-expenditure (US millions)

% Share of total US $







JC Penney






Federated Department Stores



Source: HispanicMagazineMonitor, a service of Media Economics Group

Custom publishing/The hidden gem

Many retailers, especially Sears and Kmart, put a substantial portion of their ad budgets into custom magazine publishing. On average, custom publishing accounts for 15% of a retailer's advertising budget. It costs more to reach customers through a magazine than through mass advertising. The average yearly cost of a magazine, which includes printing, editorial, and mailing, is $500,000, but it can go as high as $1 million, according to Publication Management, a report published by McMurry Publications.

In the mid-1990s, Sears launched Nuestra Gente a free bi-monthly publication targeting Hispanic consumers. The magazine, which has a circulation of 865,000 (ABC Audit), includes house ads (Sears advertising), as well as third-party ads. “Nuestra Gente” brought in US $315,400 in third party advertising revenues during the January-October 2004 period, according to figures provided by HispanicMagazineMonitor. Nuestra Gente is sent to selected charge card holders and distributed at Sears stores.

Kmart launched its monthly magazine La Vida, an entertainment and lifestyle magazine containing product offerings from Kmart, in the fall of 2002. La Vida (circ. 1 million) was wrapped around Kmart's Spanish-language weekly advertising circulars and distributed in Nogales and Yuma (Arizona), Chicago, Los Angeles, Palm Springs and San Diego (California), El Paso and Laredo (Texas), Miami, and New York.

It will be interesting to see how the Sears-Kmart merger affects these custom magazines.


Portada Staff

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