The top 50 retail brands advertising in Spanish-language newspapers spent slightly more than US $13.5 million during the first five months of 2004, according to data provided by CMR (see “Ad-tracking,” page 19 of this issue). This figure is very small when you consider the fact that general market ad spending in the retail category was US $16.21 billion, and that retail is typically one of the more print intensive ad categories.
There is some good news. Miami's El Nuevo Herald recently gained two large accounts (Nordstrom and CVS Pharmacy). And New York'sel Diario/La Prensa gained first-time business from Staples and Target. The latter company inserted an FSI with coupons for a new Bronx store opening in mid-July.
According to Mort Goldstrom, director of retail advertising at the Newspaper Association of America (NAA), retailers recognize the importance of the Hispanic market. “They aren't sure what their advertising message should be, so they advertise on a small scale in order to fine tune their messages. Retailers want to make sure they don't lose the general market population by doing Hispanic advertising,” explains Goldstrom. Anthony Moreno, senior custom publishing media manager at Newsamerica in New York, agrees. “Many retailers are looking into Hispanic advertising for the first time, so it's a learning experience for them.” He adds that some retail clients are looking for acculturated Hispanics, while others are looking for non-acculturated Hispanics.
There is still a lack of knowledge about the market. Goldstrom says that Sears, for example, does not know how many markets have newspapers specifically targeting Latinos. To help better inform advertisers, the NAA is building a database called niche voyager (www.nichevoyager.com) that will list all the print vehicles targeting Hispanics that are available in each state.
Joe Mattessa, media buyer at Downers Grove (IL) based Newspaper Services of America, says that some retailers are not fully equipped to do Hispanic ad campaigns. “They have to be prepared in terms of merchandising, sales force and store signage, which is often only in English. Many retailers just insert the general market circular into Spanish-language newspapers.” Matessa points out that some retailers, like JC Penney, Kmart and Best Buy, who are further along the curve have been running ads specifically targeting Hispanics since before the 2000 census.
The two main factors affecting the media mix of big box retailers in the general market (branding vs. driving traffic to stores and national vs. regional presence) are also very important in the Hispanic market. A national (as opposed to local or regional) ad campaign with an emphasis on image and branding (as opposed to store traffic orientation) will emphasize TV advertising in its media mix. Companies such as Sears (which currently does more “brand” advertising than “traffic” advertising), Wal-Mart and Home Depot allocate more funds to TV than print. Among the brands that include a substantial amount of print advertising are JC Penney, Target, Kohl's, Best Buy, CVS drug stores and Kmart.
Print focused ad campaigns are used mainly by regional retailers whose main goal is to guide traffic to specific stores. Macy's, Dillard's (one of the few companies which still has a decentralized ad buying system), Fry's Electronic Stores, Walgreen's Drug Stores, Robinson May Dept. Stores, Mervyn's, Foley's Department Stores and Rooms-to-go all put the vast majority of their ad budgets' into print.
But not Hispanic print
Hispanic print has not been able to attract these print intensive brands. “Hispanic media is a tough sell to retailers, even in markets where they really need it,” says Rachel Stayduhar, media buyer at ACG Media in Los Angeles. Stayduhar buys print for Factory 2-U, a retail apparel and house wares chain.
Stayduhar explains that many papers are not audited and that sometimes the editorial quality is not good enough. Most importantly, she adds, many papers lack the ability to zone the advertising message even at the zip code level. Stayduhar sometimes uses direct mail products, even though they are more expensive than FSIs, because they can be more precisely targeted to a certain audience. Stayduhar notes that high-end retailers tend to be more interested in newspapers because their customer profile is more suited to newspapers.
The importance of zoning
A few Hispanic newspapers, like El Nuevo Herald (Miami), Hoy (New York, Los Angeles, Chicago) La Opinion (Los Angeles), and Enlace (sister paper of The San Diego Union Tribune), already have sophisticated zoned delivery programs for advertising. New York's el diario/La Prensa has plans to put into place a below-zip-code level delivery program by the end of this year or early next year, according to Jorge Ayala, advertising sales director at el diario/La Prensa. Right now FSI advertising, the favorite vehicle among retailers, accounts for 2% of el diario/La Prensa's overall ad revenues. Eighty percent of el diario/La Prensa's retail advertisers are local mom and pop stores.
Other Hispanic newspapers are working with ad agencies to better meet the advertising needs of retailers. Retail clients want to know how a particular newspaper's circulation changes by zip code or within that particular retailer's store footprint.
Some media buying agencies use retailers' sales data and newspapers' subscriber and/or distribution information to help publishers prioritize zip codes that are important to advertisers, and then develop marketing plans to grow circulation in these areas. For instance, Newspaper Services of America and La Raza worked on program a few years ago to increase the Chicago's weekly advertising sales.
“Our advertisers clear preference is to drive traffic to the store. They are looking for reach,” says Cesar Pizarro, business manager at El Nuevo Herald in Miami. To do this, El Nuevo Herald has joined forces with Herald Direct, its in-house direct mail company. Through this partnership, El Nuevo Herald can offer its advertisers 150,000 in direct mail distribution (through an in-house direct mail alternative distribution method), plus 60,000 home delivered inserts in newspapers delivered to subscribers. Through the direct mail program, El Nuevo Herald reaches more than 60% of South Florida's Spanish-dominant households. Advertisers can also choose between select drops that target specific neighborhoods within a certain zip code. Retail accounts for 45%-50% of El Nuevo Herald's overall advertising revenues, and about 20% of retail ad revenues are from FSI advertising.
Retailers want higher penetration
According to NAA's Goldstrom, retailers want penetration. “It is very hard to find newspapers that have a reach of more than 65%.” Hispanic newspapers, which have a high reach among Hispanics not covered by general market papers, could help to increase retail advertising reach.
“We sell advertisers the following proposition: In Miami in order to reach the marketplace you have to do it in two languages – Spanish and English. To accomplish this we have two papers – El Nuevo Herald and The Miami Herald. They have a combined penetration of 45% and direct marketing can make it much higher,” explains El Nuevo Herald's Pizarro. “Herald Direct can distribute more than 450,000 envelopes to English speakers and 150,000 to Spanish-dominant Hispanics,” he adds.
Are partnerships the answer?
Shirley Brendlinger, new business development manager at Al Día in Philadelphia, says that the Philadelphia Inquirer (avg. daily circ. 387,592, Sundays 769, 257) has a penetration of around 40% in the Philadelphia DMA. Brendlinger says that she can provide retailers with the additional 25% that many general market papers cannot. “We have a Hispanic household penetration of more than 75%,” explains Brendlinger. Al Día distributes 37,000 weekly papers door-to-door, and 13,000 through racks and supermarkets. Brendlinger's comments suggest that large Hispanic newspapers can partner with strong general market papers to achieve the penetration large retail advertisers want.
El Nuevo Herald's Pizarro agrees. “It is very difficult for small papers to attract the big accounts without partnering with larger papers.” However, he advises partnering with a newspaper owned by the same company.