The Hispanic magazine and newspaper market continues to grow even as the rest of the US media business struggles. Joe Genova, Director of Media Services at Lopez Negrete Communications in Houston, Texas, estimates that the Hispanic print media market is currently growing at around 5% due to the good performance in categories such as health, pharmacy, cosmetics and fast food. According to Genova, a slew of new advertisers have entered the Hispanic market, including furniture dealers like Ikea, brewing companies like Anheuser Busch, Miller, Heineken and auto dealers. These companies have assigned the bulk of their campaigns to TV and radio, but have also advertised in print media. Genova expects print media advertising to increase by another 5% in 2003. In his view, “the entrance of high profile magazines with national coverage, e.g. Maxim en español, is opening the eyes of advertisers”.
Not everyone is positive about the performance of Hispanic print media in 2002. According to Romeo Pérez, Advertising Sales Director of Hispanic Magazine and Hispanic Trends, the Hispanic print media market took a hit in 2002. “Just like in the general English publications market, Hispanic advertising budgets were cut back and advertisers put their scarce resources in a sure thing, meaning TV and radio.” Pérez states that the print media advertising market has not grown or shrunk this year. For 2003, Pérez forecasts moderate growth, and adds that “people are getting their budgets back to where they were before September 2001.”
Andrew Buchholtz, Managing Director at the media invest-ment bank Veronis, Suhler & Stevenson, is also cautious about the success of magazines targeted at Hispanics. “There has not been a hugely successful business endeavor yet.” Buchholtz defines a successful venture as an operation with sales of at least US $20-30 million and cash flow and/or EBITDA (Earnings before interest taxes and amortization) margins in the 20% range.
Buchholtz claims that “many publications, including People en Español, never built the circulation they expected.” In fact, according to July 2002 rankings compiled by Magazine Publishers of America no magazine specifically targeted at Hispanics is among the top 100 US magazines in terms of circulation. Portadatm estimates that the market volume for US magazines written for Spanish speaking audiences will reach US $124 million in 2002, just 0.57% of the $21,680 million total 2002 US market volume estimated by media merchant bank Veronis, Suhler & Stevenson.
The challenge of winning over white middle-aged men
According to Federico Subervi, Chair of Communication Studies at Pace University in New York, “many Hispanic publishers have not been able to convince the white middle-aged men who are decision makers at large companies to buy advertising space,” adding that “the strong barriers that stereotypes creates must be brought down”.
Still, the Hispanic magazine category is one of the few whose circulation has grown in 2002. According to figures published by the Audit Bureau of Circulation, June 2002 total circulation of Reader's Digest Selecciones has grown by 7.5% to 278,000 since last year. People en español's circulation has grown by an amazing 23.7% to 420,800.
To many observers it is clear that Hispanic print media has passed its infancy stage. According to Ahu Terzi, Advertising Director for Spanish Publications at American Baby Group, “four years ago the Hispanic magazine market had just a small number of publications which did not attract many advertisers. In the last three or four years there have been an important number of launches and the publications that already existed have improved their marketing.” In Terzi's view another factor that has contributed to the growth of Hispanic print media is the appearance of market research companies, such as Simmons, which measure publications' reach and target. Terzi expects that audience measurement systems for Hispanic publications will become more sophisticated in the next three to four years, with the probable entry of MRI into the Hispanic market. She also expects more launches within the next 3 or 4 years. “Some of the magazines will be bilingual, but most of them will be written purely in Spanish.”
Language is an important factor in Hispanic print media publishing and advertising. Through print media, advertisers can target English and Spanish dominant, as well as bilingual Hispanic Americans. To target Spanish dominant audiences print media advertisers usually buy space in Spanish language magazines, e.g. Vanidades or People en español. Bilingual Hispanics, those fluent in Spanish and English, are best reached through bilingual magazines such as Latina. Finally, those Hispanics who are English dominant, but still have strong ties to their Latin roots can be targeted through English only magazines such as Hispanic Business>
Joe Genova, Director of Media Services at Lopez Negrete Communications, told Portadatm that the Hispanic business magazine niche has not been fully exploited by publishers. He emphasizes that companies catering to businesses would advertise more if there were more regional Hispanic business magazines. Many large companies, including IBM, are currently sharpening their marketing efforts by targeting Hispanic-owned businesses. Genova cites Journal of Texas as an example.
Newspapers, success stories…
“In general, Hispanic newspapers have been more successful than magazines,” says Andrew Buchholtz's, MD at Veronis, Suhler & Stevenson in New York. He adds that “they have had continued circulation growth.” Large publicly quoted newspaper publishers such as Knight Ridder (El Nuevo Herald) and Tribune (Hoy, La Opinión) own dailies with a relatively high circulation. Portadatm estimates that the market volume for Hispanic newspapers will reach US $215 million in 2002. CPMs paid for advertising in Hispanic newspapers are very diverse. Generally a smaller market paper will charge a CPM of US $8, while a larger market Hispanic paper will ask for US $35 per 1,000 issues.
Joe Genova, Director of Media Services at Houston based Lopez Negrete, says Hispanic newspapers “still have ways to go” in their development as an advertising medium targeted at the Hispanic market. However, he notes that “La Opinión in Los Ángeles, El Nuevo Herald in Miami, and Hoy, El Diario/La Prensa in New York should always be part of a large advertising campaign.” The advertising categories Genova sees growing in newspapers are financial, automotive, beverages and real estate.
Asked if there are particular newspaper formats in the Hispanic market, which have not yet been exploited by publishers, Genova notes that “statewide newspapers” would be useful to advertisers. He adds that “newspapers covering whole regions, for instance a Texan newspaper or a Californian newspaper, would make advertising buys much easier for media buyers.” This way a big advertiser would not have to spread its advertising dollars among several print magazines.
For instance the brewing company Miller currently advertises in Que Honda Magazine, La Opinión, L.A Magazine and Nuevo Mundo. If there were a statewide Hispanic newspaper, Miller would be able to centralize its print media buys in one or two regional newspapers.
…and remaining challenges, lack of identity…
Can the myriad of Hispanic community papers do the job for advertisers? Genova's agency, Lopez Negrete, buys advertising in Latino community newspapers for Bank of America. He notes that “most community papers have the same articles and the same look. They have no distinctive identity.” Professor Subervi of Pace University in New York explains that “many of the Hispanic community papers were born out of a sense of advocacy for their communities. They originated out of grassroots needs and problems. With time, some of them have developed into more commercial ventures because of their ability to deliver Hispanic audiences.”
While publications targeted at white Americans are predominantly sold through subscriptions, this is not the case for Hispanic newspapers. Federico Subervi, the Latino-Communication Specialist at Pace University in New York, says that distribution is a big challenge for Latino newspapers. According to Subervi, it is difficult to sell newspaper subscriptions in many areas with large Hispanic populations. “Some of these areas are riddled with crime and the buildings are closed to strangers. Delivery boys are not permitted to leave newspapers at the doorsteps early in the morning.”
Hispanics who have more purchasing power live spread out in urban suburbs. Currently, approximately 54% of Hispanic-Americans live in suburbs. This poses another distribution challenge for Hispanic newspaper publishers. Subervi explains that the delivery service has to drive “10 to 15 blocks to deliver one newspaper, making the service very costly.”
Some observers claim that Hispanic print media, particularly newspapers, have a long way to go in order to improve their editorial quality. According to Joe Genova of Lopez Negrete Communications, the quality of many Hispanic newspapers is still low. In Genova´s view, La Opinión in Los Ángeles is by far the highest quality Hispanic newspaper.
“Many Hispanic journalists need to attend workshops and seminars to improve the quality of their editorial output,” says Professor Subervi. One problem is the lack of journalism schools specifically designed to educate Hispanic journalists. In Subervi's view, “there should be more schools of journalism for Hispanic writers and TV and radio journalists.”