2007 HMS Program

May 11, 2007

HISPANIC MAGAZINE SUMMIT
The CUNY Graduate Center 365 Fifth Avenue at 34th Street	May 11, 2007 New York City

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Program Overview

On May 11th, the Hispanic Magazine Coalition and the MPA held the third annual Hispanic Magazine Summit in New York. As underscored by Jackie Hernndez-Fallous, Publisher, People en Espaol in her opening remarks, the primary purpose of the Summit was to address the critical issues and paradoxes facing the Hispanic magazine community. These include a central paradox: why with such splendid demographic growth (and real circulation gains) do Hispanic magazines get a disproportionately small share of advertising dollars (3-4% vs. 17% in the General market?).

As at previous Summits the focus this time was unrelentingly on research, hard data, trend reports and best business practices from some of the best in the business. It is no exaggeration to note that Hispanic magazine reader engagement was the leit motif for the conference, a thread that seemed to tie everything else together. The engagement symphony began with Sonya Suarez-Hammond, Vice President, Multicultural Marketing Insights, Yankelovich Monitor, Inc. who explored U.S. Hispanic Consumer Trends for Better Engagement.  She fittingly remarked in her opening what her presentation was not about: Hispanic size or purchasing power, Hispanic marketing resistance or consumer clutter, the language debate, or the significance of salsa. Her tongue-in-cheek remark underscored an important point:  It is time for the community to get beyond the superlatives and the obvious and to focus on marketing segmentation and increasing engagement opportunities.

Re-Engaging the Culture

Ms. Suarez-Hammond confirmed the proposition that for a growing number of Hispanics what defines them is culture more than language and re-engaging with the culture is very important them. She noted that Hispanics, much more than non-Hispanic Whites, acknowledge that My roots and heritage are more important to me today than they were just five years ago.  She observed that the same trend line is apparent when Hispanics are asked about family and commitment to family, history, rituals, music, foods and other aspects of culture and traditions considered important to preserve.

Ms. Suarez-Hammond pointed out that Hispanics by an almost two-to-one margin enjoyed looking at or listening to advertisingwhen compared to the non-Hispanic Whites. And Hispanics are more overwhelmed by all the sources of information available today than non-Hispanic Whites. But confusion exists and serves as a barrierand is growing in this community, Healthcare was cited as one example with more and more Hispanics agreeing there should is so much being written about health these days that it is difficult to know what should and should not be believed.  Moreover, there is a growing sense among Hispanics that marketing and advertising has little relevance to them.

While Hispanics Internet usage is growing, they still use the Internet to a lesser degree than their non-Hispanic White counterparts; but almost half said they would buy more products online if retailers offered more information in Spanish on their websites.  So they are seeking relevance.

Ms. Suarez-Hammond offered this Hispanic Market Value Proposition: a company should speak in a culturally relevant manner; respond to needs on both functional and emotional levels; recognize individuality in the ethnic consumer; and celebrate the heritage. These steps will lead to trust and engagement.

She cited a number of rules of engagement starting with looking to the future, not the past. Secure a competitive advantage by letting culturally relevant innovations and reinvention leads the way. Deliver your message at a time and place the Hispanic consumer is ready to receive it. Talk to Hispanic consumers in their voice. Support consumer empowerment and help simplify the lives of Hispanic consumers.

Ms. Suarez-Hammond ably moved the discussion beyond language to a culturally relevant engagement, showing that Hispanic consumers deeply engage both media and advertising, often to a greater degree than the General market.  The data sourced in her presentation was from the 2006 Yankelovich MONITOR Multicultural Marketing Study.  For more information please contact her at ssuarez-hammond@yankelovich.

Deep Engagement

Betsy Frank, Chief Research & Insights Officer, Time Inc. Media Group, offered with a Hispanic overlay new magazine engagement research titled From Connection to Experience. She noted that given the realities of the media landscape, it has never been more critical to focus on consumers, engage with them in the right context, and partner with clients. This research, among other objectives, was to help better understand the unique elements of the magazine experience.

The research was substantial. The Qualitative phase called for magazines readers to be deprived of their favorite titles for two weeks, followed by in-home ethnographies, to obtain a deep understanding of the role of media in their lives. The research also included Conflict Groups to understand the changing dynamics of media consumptions and an online survey of 3,117 adults to validate hypotheses.  Ms. Frank noted that a number of finding emerged that were related to the role of magazines within the media landscape; the unique and integral part advertising plays in magazines; and the emotional and practical needs met by magazines.

She suggested that while in todays media landscape everybody is doing everything, and often at the same time, not all experiences are created equal.  Unlike with other media magazines readers are likely to be singularly focused on their magazines. The Time Inc. research indicates that the majority of consumers read their magazines in bed, in their favorite chair or in a ritualized setting. An even larger number of Hispanic readers say they are alone when reading magazines. One quarter of Hispanics say they have a special time for reading magazines. On the surface, the benefits of print and digital appear to be similar. However, magazines still own the emotional connection with consumers. The Time Inc. research confirms that magazine ads are added value for readers who said that they were more relevant, less intrusive, and more trusted than in other media. Ms. Frank observed that Synovate research, done by the Hispanic Magazine Coalition and MPA, found that Hispanic readers are even more likely to value advertising, especially Spanish-dominant Hispanics.

Ms. Frank noted that the research showed that magazines play a differentiated and pleasure role due to their portability, their tactile nature, and their high social currency. She added that a large majority of Hispanics like the idea that you can read magazines at your own pace.

The research also indicated that magazines fill four major needs: to be informed, inspired, comforted, and entertained. And magazines fit into four key occasions as defined by time and attention: escape, shared activity, downtime maximizer, and additional stimulation.  Those deprived of magazines reported feeling a painful void, identifying magazines as a chance to destress and provide me time that no other activity could match.

Ms. Frank reported that Hispanics are already the heaviest readers in terms of time spent with magazines, and more than nine in ten Hispanic readers expect to read magazines the same amount or more next year. The deep engagement of Hispanic readers is clear. 42% cant wait for their favorite magazines to arrive. About two-thirds start reading immediately (compared to 60% of the general market). It is one of the few pieces of mail that is still welcomed.

In summary Ms. Frank observed that perhaps because of the complexity of our multi-media world magazines stand out for their relevance, emotional connection, and inspiration. For Hispanics the additional benefits of learning and creating cultural communities create an even more engaging and viral experience.

This comprehensive research across the magazine industry confirmed and deepened what we knew about reader engagement and the psychological and emotional bonds they form with their favorite magazines. The study is also noteworthy since is shows Hispanics compare very favorably to the General Market in all the key engagement indices.

State of the Market

Wayne Eadie, Senior Vice President, Research, MPA reported on a Hispanic Advertising Tracking Study conducted in April 2007 on behalf of the Hispanic Magazine Coalition. MPA surveyed advertising agencies and media buying companies. Eighty-four percent said that over the next two years share of ad spending will increase or stay about the same. Magazines ranked very high in terms of engagement, trust, and targeting capabilities. Magazine sales representatives far outpaced other media when it came to knowledge of their own products and compared favorably with Internet sellers in their willingness to execute creative ideas. When asked about recall of campaigns promoting the benefits of Hispanic targeted advertising respondents rated magazines the highest of all media measured (see Hispanic section of web site for full article).

Stephen Frost, Director of Research, MPA, took at deeper look at the Synovate research conducted in the fall of 2006. Hispanic readers compare very favorably to the General Market. Young Hispanics (18-34) spend more time reading; they have a stronger emotional bond with magazines; and they have a closer affinity to their favorite magazines. And this engagement carries over to advertising.  Hispanics prefer magazines for information; TV for entertainment. They prefer magazines advertising to advertising in other media. (Agencies interest in this research and software to make full use of the data can contact Stephen Frost at sfrost@magazine.org).

Carlos Pelay, President, Media Economic Groups, which measures more than 100 Hispanic magazines, Internet sites and portals, looked at trends, growth and opportunities, offering another perspective on the sector. Magazine advertising grew 14.7% in 2006 (vs. 2005) to $245.5 million, slower than in the previous four years but still substantial. P & G, LOreal, GM, McDonalds, Toyota and Ford are among the top advertisers in this market, a hierarchy that hasnt changed much since 2002, though the top 10 advertisers have more than doubled their spending in this period to more than $66 million. Personal care products, automotive, apparel and direct response are driving growth in ad spending. People en Espaol is number one in ad dollars, followed by Latina and Selecciones. The increase in ad spending in 2006 has been helped by new campaigns by Jeep, All State insurance, Dodge, Daimler-Chrysler, Colgate-Palmolive, Toyota, P&G, and Wrigley. New and existing advertisers are contributing equal share to ad growth.

A number of speakers at the Summit suggested that the Hispanic publishers didnt offer enough choices for advertisers; that some magazine categories such as health, fitness, home, womens service, and automotive were under-represented. Carlos Pelay noted that in 2006 there were only four launches, down from fourteen in 2005, perhaps suggesting the category is cooling a bit. Pelay added that launches in 2007 are picking up. They include: Medico de Familia, Kena (Megazines GroupApril 2007), Vida y Salud (Holar Latino-Fall, 2007), Nuevo (Maya MagazinesSeptember, 2007). This list is noteworthy as it suggests publishers are answering the need for more health information in the community. Also noteworthy is that two well-capitalized companiesthe Megazines Group and Maya Magazinesare investing in important launches in the sectorundercapitalization has plagued startups in this sector.  Pelay noted that U.S. Hispanic publishers are increasingly making use of newspapers to distribute their magazines.  Publishers using this method include: Casa y Hogar, Futbol Mundial and Fox Sports en Espaol.

Even though there is much discussion about language preferences in the Hispanic community, in 2006 Spanish-language publications garnered 73% of ad dollars.  The largest advertiser, such as P&G, LOreal, General Motors, McDonalds, Unilever, and Toyota use predominantly Spanish-language ads.

Pelay compared ad spending growth in Hispanic magazines with African-American magazines in 2006 (+14.7% vs -2.3%). He added that absolute spending in African American magazines is nearly twice that of Hispanic magazines ($453 million vs. $245 million in 2006), the result of generally higher circulation, lower CPMs which result in higher spending.

Views from the Client Side

Two keynote speakers addressed the challenges and opportunities facing Hispanic publishers. Pat Wilkinson, Senior Director, Customer Relations Management and Multicultural marketing at The Home Depot acknowledged that her company had made a determined effort in recent years to discuss the needs of Hispanic and other ethnic consumers. While she gave every impression that she would like to include more magazines in her media mix, she reminded attendees that a company rule is that all magazines must be audited. She also mentioned that there didnt seem to be enough of a selection of Hispanic magazines for marketers. This observation is not new. Given the importance of home ownership and remodeling is it a surprise that there are not more home and home dcor magazines in the sector.

Pernille Lopez, President of IKEA North America, offered a very touching and personal view of the U.S. Hispanic market (She was born in Denmark and married a Mexican). As head of IKEAs Human Resources from 19972001, Ms. Lopez was instrumental in developing and implementing progressive policies across the workforce.  This grounding was evident as she spoke about working to understand and serve the Hispanic consumer within the context of her family and her values. No wonder BusinessWeek has named IKEA as one of the worlds best global brands; Working Mother names IKEA to its annual list of 100 best companies for working mother; and Forbes included IKEA on its list of 100 best companies to work for.

Jackie Hernandez led an agency panel that included Gloria Constanza, Partner, Chief Strategists, dexposito and partners, Oswald Mendez, Managing Partner, Director of Integrated Communications, The Vidal Partnership, Jack Myers, Founder & Chief Executive, Myers Publishing, and Halim Trujillo, Partner, Director of Multicultural Planning, MindShare North America. This very lively panel addressed many of the hot-button issues, including language and whether the Hispanic market is becoming the general market but perhaps nothing more important that the need for the community of Hispanic magazines to get together and provide comprehensive readership data to agencies and clients, a project that MPA will continue to work on with the Hispanic Magazine Coalition. That message was loud and clear.

Ruth Gaviria, Executive Director & Publisher, Meredith Hispanic Ventures, offered a very timely, detailed, and useful analysis of the business model used for the launch of Siempre Mujer, starting with the rhetorical question: How do you build a sustainable Hispanic magazine business model today? Her greatest challenge: finding 5 million Hispanic women in a country of 300 million people! A key consideration involved wantedness: is the content broad enough to be wanted by at least 25% of an advertisers target?

Early on Ms. Gaviria and her team raised the issue of attaining multi-platform capability: Can the magazine extend to other media platforms, from the web to television and radio? And does the magazine offer multiple revenue streams: advertising, circulation, partnerships, database, and custom publishing?

Ms. Gaviria noted that a critical factor to the early success of Siempre Mujer was the Meredith infrastructure, the database, and circulation expertise. The company has a portfolio of successful Hispanic magazines and a deep knowledge of womens issues. This launch was part of Merediths strategic plan, as announced to the Wall Street Journal.

This presentation was valuable for a number of reasons. There is a need in the Hispanic magazine community to share best business practices and this was certainly of that caliber. Ms. Gaviria was open, blunt and forthright about the challenges associated with launching a magazine in todays competitive environment. This was good and necessary information as some of the magazine failures that Carlos Pelay mentioned would have been helped by such advice.

Tom Morrison, Vice President, Media Sales, Simmons Market Research Bureau, brought the conversation about to the strength of magazines, engagement and ROI, arguing that to move the advertising needle Hispanic magazines need to change the nature of the conversation, emphasizing the power of print. His suggestion was to use the next generation of behavioral solutions or behavioral-graphics in his language.  In effect this is a segmentation system targeting consumers by linking TV viewing patterns to their lifestyles, attitudes and marketplace preferences. With this approach Morrison showed that magazine when joined with television grows reach. For more details about this analysis please contact him at tomm@smrb.com.

David Taggart, General Manager & Group Publisher, Editorial Televisa chaired a digital panelWhats Happening on the Net?, with Reinaldo Acosta, General Manager, Megazines; Marines Duarte, Publisher, Cosmo en Espaol; Fernando Rodriquez, CEO, Terra Networks; and Dave Morgan, Chairman, Tacoda.  Framing the discussion were two broad considerations:  First, what features of Web 2.0 are being employed by Hispanic magazines and what measurement metrics are currently in use? While Hispanic magazines generally, do not seem to be as advanced in the digital space as titles in the general market, much progress is being made. Acosta remarked that Kena is being launched as a cross-platform effort. Cosmo has formed a partnership with Terra to get some advantage of scale.  And no panelist though Hispanic readers would embrace digital magazines any time soon.

The Hispanic Summit was not only a reminder that Hispanics read magazines; it was a testimony to how deeply engaged they are with both editorial and advertising, often to a greater extent than the general market. A number of speakers reiterated a major concern: Hispanic magazines get a disproportionately low share of advertising revenue compared to the general market. That seems obvious enough. But as agencies and client made clear, Hispanic magazines need to help themselves by offering more compelling research and adhering to consistent auditing practices.  As noted, MPA will continue to work with the Hispanic Magazine Coalition on these issues.