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Chain Vies for Hispanic Ad Market

News media and national advertisers target America's burgeoning Hispanic population

A COAST-TO-COAST network of Spanish-language newspapers is trying to bring the rapidly growing Hispanic market to the attention of national advertisers.

Consumers, advertisers, and the newspaper network all stand to benefit, say executives of New York-based HispaniMedia, the news media chain.

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The company currently owns three leading Spanish-language papers: New York's El Diario-La Prensa, the nation's oldest Spanish-language paper, El Mensajero in San Francisco, and Extra Bilingual Community Newspapers in Chicago. Negotiations continue on other possible acquisitions.

"I felt that we could put together ... a little company of very strong independently growing papers," says Peter Davidson, president of HispaniMedia. "There are a lot of very interesting papers out there. But a lot of operators are undercapitalized, don't have the right technology, don't have the right management expertise, don't have the right access to editorial product, and would like to have correspondents where [El Diario] has correspondents."

"Benefits that exist for newspaper groups are equally attractive in Spanish as they are in English," says Jim Martinez, an adjunct professor at Northwestern University's Medill Graduate School of Journalism in Evanston, Ill. "If you can get enough key markets nationwide, you can attract more ad dollars and more significant advertisers."

The number of Hispanic-Americans is increasing at five times the country's overall population growth rate. The total number of Hispanics has increased more than 70 percent in the last 10 years to more than 22 million people. The group spends more than $200 billion a year on goods and services, according to a recent study by DRI/McGraw-Hill. Two-thirds of that population live in 10 metro areas, making it an accessible market for advertisers. Between 60 and 70 percent of Hispanic-Americans say they prefer to read and speak in Spanish. Few advertising dollars

Although 10 percent of the US population is Hispanic, only 0.5 percent of advertising dollars flow to all Spanish-language news media combined. Last December, Hispanic Business Magazine reported that of the $733.5 million spent on marketing to the Hispanic population only $106.9 went to print media.

"One of the big problems national advertisers have, and they are justified," Davidson says, "is that they have very little trust in the credibility of Spanish-language publications."

Each of HispaniMedia's papers will have its circulation audited either by the Audit Bureau of Circulation or the Verified Audit Circulation.

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HispaniMedia's vision is not one of a centrally controlled empire. The key, Davidson says, is for the network to include "good local publishers - people who are really knowledgeable about their communities and are recognized as real activists on behalf of their communities.... We don't dictate editorial policies from here because that's the way you kill papers."

That philosophy is holding up so far, say the managers of Extra Newspapers in Chicago. "We have input on how this product and this chain develops," says Mary Montgomery, Extra's executive editor. Extra's publisher, Mila Tellez, ran the newspaper with Ms. Montgomery for 11 years before they sold it to HispaniMedia in February.

"We wanted to be part of something that was national in scope," she says.

The network hopes to achieve some synergy between the chain's newspapers by sharing management expertise, attracting national advertisers, and boosting circulation. For example, managers of the San Francisco paper sat down with managers of the Chicago paper to evaluate the accounting systems both papers used. "We were able to take a look at which best could funnel information into a central system," Ms. Tellez says. "Reporting is now consistent."

Papers in the group are also beginning to share editorial material. The weekly magazine insert produced by El Diario-La Prensa is now being shared with El Mensajero.

"Six years ago, the National Association of Hispanic Publications had about 25 members," says Carlos Ramirez, publisher of El Diario-La Prensa. "Now it has 110 members - all audited. That is a sign of the market's growth."

HispaniMedia "has enhanced our public relations image in the business community," Tellez says. Last year Extra sold about 40 pages of ads per issue. This year, revenues are up 40 percent, with sales of 56 to 64 pages of ads per issue. Circulation has also risen from 66,000 to 72,000. Saved from closure

In San Francisco, El Mensajero was about to be closed by its former owner when HispaniMedia purchased it last year. Revenues are up, but it is still not making money, Davidson says.

In New York, paid daily circulation for El Diario-La Prensa is approximately 50,000. Revenues have taken a hit as advertising spending has plummeted in the recession. But "once the economy turns around and ad budgets increase," Davidson says, "we'll have to see if we get our same 0.5 percent of [total national] advertising dollars or closer to 5 or 6 percent, which is where it should be."

While there are only about 25 major national advertisers that spend heavily in the Hispanic market, "whenever advertisers come in and try Spanish-language media, they don't leave," Davidson says.

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