November 1, 2003:
Market profile: Los Angeles, US $280 million advertising dollars up for grabs in the largest print media market
Newspapers and magazines targeting Spanish-speaking audiences play an important role in the Los Angeles print media market. Los Angeles is home to 7 million Hispanics with combined purchasing power of $66.8 billion. It is the largest Hispanic market in the country. In a city where 41.4% percent of the population is Hispanic – this number is expected to grow to 50 percent by 2010 – Spanish-speaking audiences are crucial to the success of both publishers and advertisers.
National advertising is an important revenue source for Hispanic print media in Los Angeles. “In our display advertising, national advertisers account for about 40% and local for 60%,” Enrique Kaufer, VP of advertising at La Opinión tells Portadatm. Los Angeles is the most important market for national magazines like Latina, who rely mainly on national advertising. California as a whole accounts for 28% of Latina's total paid circulation, and is by far the state with the highest sales share (followed by Texas with 15% and New York with 14%).
Annual volume of advertising in Spanish-language print media in Los Angeles is between US $90 and US $100 million, according to analysts interviewed by Portadatm. However, since more than two fifths of the population is Hispanic, a substantial amount of advertising dollars spent on English-language newspapers should also be included. Portadatm estimates that print media advertising targeting Hispanics, including English language print media, is US $280 million. (This figure was calculated by taking into account the total LA newspaper advertising volume and adjusting it for the percentage of Hispanics in the total population and their lower than average purchasing power).
“We have enjoyed great success and growth over the past year. 2003 was still a challenging year because of the economic recovery. We are expecting double digit growth for 2004,” La Opinión´s Kaufer notes. “National advertising and our Custom Publications represent the most growth potential.”
The question of language: English-dominant…
The Los Angeles Times (circ. 944,000) is the clear leader with English dominant Hispanics. La Opinión's Enrique Kaufer explains that “La Opinión and the Los Angeles Times are indirect competitors. In regards to readers, we are focused on different segments. La Opinión serves primarily the Hispanic who prefers to read in Spanish, whereas Los Angeles Times is a general market newspaper. So, Los Angeles Times might be reaching some English only, English preferred and bilingual Hispanics. In terms of advertising, it depends on the category, but obviously we are sometimes competing for the same clients.”
In the past La Opinión has tried to collaborate with Tribune's Los Angeles Times. Two years ago La Opinión tried a bundled distribution strategy with The Los Angeles Times. The newspapers also attempted to cross-sell advertising to each other. Neither of these strategies was successful.
…and Spanish-dominant Hispanics.
La Opinión is the clear market leader when it comes to Spanish-dominant readers. The newspaper is the only Spanish-language daily ranked among the top 100 US daily newspapers by circulation. More than half of its readers (54%) are Spanish dominant, while more than a quarter (28%) are proficient in both English and Spanish. Four fifths of La Opinión's readers are Mexican-Americans. Its key advertising categories include automotive, travel, legal and business services. Francisco Lozano, national advertising sales manager at La Opinión notes that wireless telecom, auto, home improve-ment/home furnishings and major retail are the categories which are currently growing the most.
Spanish-dominant readers have distinct consumption characteristics, with interesting implications for marketers. According to a recent AC Nielsen study of Los Angeles Hispanics, Hispanic households spent 67% more on carbonated soft drinks than non-Hispanic households. However, Hispanic households where Spanish is the only or preferred language spent 108% more on carbonated soft drinks. Additionally, only 52 % of less-acculturated Hispanics belong to a frequent shopper program, compared to 90 % of non-Hispanic households.
In Los Angeles, as in other key US Hispanic print media markets, the marketplace is very fragmented. More than 50 weekly and monthly papers compete for readers and advertisers, and new publications appear all the time. As opposed to La Opinión, almost all of these publications are free. “I need to buy additional ad space in other newspapers to really cover the Los Angeles DMA,” says Franklin Mejías, print media buyer at La Agencia de Orci. Mejías's buys frequently include weeklies such as Mundo LA, El Económico, La Prensa>and Excelsior. CPMs for most of these newspapers are 50% to 60% lower than the ones La Opinión charges.
These free weeklies belong to large newspaper chains and have strong readership in certain areas of the Los Angeles area. “We are growing as a free publication in Long Beach and in the Valley, and we are trying to keep up with the growing Hispanic population,” El Económico publisher Fernando Paramo tells Portadatm. His recipe for success includes “good columnists, good sports coverage and, of course, all written in Spanish.” Theme related supplements such as the Gran Prix car race in Long Beach are published in an attempt to entice readers and advertisers. While El Económico has its own sales force, the paper's owner Media News Group also handles advertising sales through its advertising sales subsidiary – Los Angeles Newspaper Group.
While El Económico controls the markets in Long Beach and the Valley, Excelsior (owned by Freedom Communications) is the most popular Spanish-language weekly in Orange>County and La Prensa (Belo) in Inland Empire. Excelsior recently used the leverage of its English-language daily OC Register by offering the two papers as a bundled subscription for US $2.50 per week. La Prensa uses its ties with The Press Enterprise in its marketing campaigns. On October 10th, La Prensa launched El D. A special desert edition of La Prensa.
It is published every Friday and includes desert news of interest to the Coachella Valley´s Hispanic population. 8,400 copies are distributed at Hispanic-oriented gathering places throughout the Valley.
In the article “US $280 million advertising dollars up for grabs in the largest print media market,” page 8, Portadatm No. 6 November/December 2003 it was incorrectly stated that Enrique Kaufer is VP of advertising at La Opinión. Kaufer is VP of marketing.