There is huge catch up potential for Hispanic newspaper and magazine advertising, to say the least. That becomes clear by comparing the dollar amounts that national advertisers invest in Hispanic magazines and newspapers to the dollar amounts they invest in general market magazines and newspapers.
According to Portada® Ad-tracking, national advertisers spent $75 million advertising in Hispanic newspapers and magazines in 2005. In contrast, national advertisers spent approximately $8 billion for general market newspapers, according to data compiled by Veronis, Suhler & Stevenson (VS&S). According to this, national advertising in Hispanic newspapers amounted to 0.94% of general market national newspaper advertising.
For magazines, Portada® Ad-tracking figures reveal that in 2005, national advertisers spent $150 million advertising in magazines explicitly targeting Spanishspeaking audiences, while VS&S estimates that national advertisers spent $10.5 billion advertising in general market magazines. Therefore, the ratio of national advertising in Hispanic Magazines versus general market magazines is 1.42%.
As the math makes clear, both ratios for national advertising in Hispanic magazines and newspapers are very low, particularly if one takes into account that Hispanic purchasing power exceeds 8.5% of total U.S. purchasing power. Of course, the strong position of TV and radio in U.S. Hispanic media also has a lot to do with print's low ad-revenues.
However, there is definitely a lot of room for growth as the supply of print media vehicles has not yet met the preferences of readers and advertisers. In the second Hispanic Magazine Summit that was held in Miami at the end of June, Lou Lopez, vice-president of diversity practice at Synovate, presented the first results of an MPA-commissioned Hispanic Readership Study in which 800 Hispanic respondents were interviewed. A very interesting result of the survey is that only 66% of respondents agree that there is a good variety of Hispanic magazines (versus 92% of general market respondents who think that there is a good variety of general market magazines). This data suggests that approximately 1/3rd of the Hispanic market is still underserved by Hispanic print, leaving considerable room for growth.
EXPLOSIVE GROWTH IN SOME CATEGORIES?
A look at the share of different categories in Hispanic print advertising (newspapers and magazines combined) reveals that with approximately 12.5% shares each, Automotive and Finance are the largest categories after Telecommunications. While these ratios roughly correspond to the shares of these categories in general market print advertising, with the exception of Telecommunications which is larger in Hispanic print, absolute spending figures for Hispanic print are very low. The Money Transfer category (which amounts to 1.4% of total ad-spending in Hispanic print, versus 0% for the general market) has a lot of potential, particularly as the providers of these services are increasingly banks and other financial institutions (Bank of America, Citigroup etc… as opposed to Western Union) who can tie Money Transfer Services to other types of financial services for Hispanics.
Cause Marketing (2.23% of total Hispanic print advertising) also has a lot of room for growth. Publishers of newspapers and magazines have home work to do when it comes to tapping diversity budgets of large corporations.
Finally, custom publishing is another big opportunity for publishers targeting Hispanics. In the general market, custom publishing in external publications (as opposed to internal communications within companies) amounted to $13.5 billion. Due to the relatively low reach of many publications targeting Hispanics, this is a sector with tremendous growth potential. Fortune 1000 companies are increasingly interested in targeting Hispanics via custom publications. These companies can distribute their publications at their stores and own powerful customer lists in order to direct mail the publications to a large Hispanic demographic. (See “Advertisers get ready for custom publications targeting Hispanics,” page 3, Portada® No. 21, June/July/August 2006).