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Jordan Hollender
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Editor in Chief Ariel Gonzalez, left, and Publisher Charlie Nunez of hip-hop magazine Bridgez
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Speaking to the Converted
Magazine publishers are investing in start-ups for English-dominant Latinos. Advertisers respond to growing trend, but dollars still slow in coming.
March 01, 2006
By Marcelo Ballvé
Appropriately for a high-stakes gamble, Tu Ciudad magazine started in the heart of Las Vegas. In 2000, two executives working in Time Inc.'s media empire sat down to breakfast together at Harrah's Casino Hotel. They were on routine business travel, but instead of discussing the day's agenda, they talked big ideas. Both worked for People en Español, but they were scanning the horizon, looking for the next new thing in Latino magazine publishing. What if the future wasn't en español at all, but en inglés?
They were Jaime Gamboa, then an ad salesman for People en Español, and Angelo Figueroa, the magazine's founding editor. "It was just a conversation, but that breakfast was really where it all started," recalls Gamboa.
Today, Gamboa and Figueroa are staking their careers — and a pile of another publishing house's money — on ideas that first surfaced during their Vegas meeting.
The result, Tu Ciudad Los Angeles magazine, embodies their ideas, and with it, both men have helped reenergize the English-language landscape in Latino print. With Gamboa as publisher and Figueroa as editorial director, the two launched Tu Ciudad in spring 2005 amid much media attention and fanfare. The glossy bimonthly city magazine in Los Angeles is aimed at acculturated, college-educated Latinos in the Los Angeles area, with an annual household income of more than $65,000. Gamboa, who fits the profile himself, calls the readership "mainstream Latinos." Tu Ciudad is backed by Indianapolis-based Emmis Communications, publisher of other regional titles such as Los Angeles Magazine and Texas Monthly. Gamboa, who is only 32, has also anted up some of his own cash.
"I think the industry was ready for it," he says about Tu Ciudad. "Premium advertisers are saying, 'It's about time. We've been looking for this audience.' "
Oscar Garza, Tu Ciudad's editor in chief and former deputy editor of Los Angeles Times magazine, suggests Los Angeles' robust and young Latino middle class is an ideal testing ground for the Tu Ciudad concept. He says, "If the magazine can't work here, it can't work anywhere."
Acculturated, English-dominant Latinos may be an attractive audience, and Southern California an ideal place to target them, but they are not an easy audience to capture or maintain. Others have tried and failed.
Fuego magazine, Harris Publications' first foray into the Hispanic marketplace, folded last month after publishing only three of its quarterly issues. Though radically different in style from Tu Ciudad, Fuego also was in English and targeted second- and third-generation Hispanic men. The magazine focused on photo spreads of barely clad Latinas in the style of Maxim and FHM. In an interview with Marketing y Medios only weeks before the magazine's close, Arlene Ramos-Noel, an ad saleswoman for the magazine, insisted Fuego was not a "laddy book" and complained advertisers would pass over the publication in preference of general-market men's magazines. She said, "We cover political issues. We're still talking about our culture."
Another 2005 launch aimed at second- and third-generation Latinos, The Source Latino, a bilingual quarterly, appears to be in uncertain waters along with its parent hip-hop magazine The Source. Currently, it is engulfed in a legal dispute between its owners. The Source Latino insists its second issue will be on newsstands this month.
CRACKING THE LANGUAGE CODE
Despite cautionary tales, acculturated Latinos increasingly are drawing publishers' attention. The numbers and future prospects are attractive. According to the U.S. Census, a majority of the Latino population — more than 60 percent in 2004 — is U.S.-born. And, according to demographers, that proportion will only increase. The second generation in particular is predicted to boom in numbers. A 2003 Pew Hispanic Center study titled "The Rise of the Second Generation" states that by 2020 immigrants will no longer play a dominant role in the U.S. Latino population and will be overshadowed by their children.
"Births in the United States are outpacing immigration as a key source of growth," the study states. "Over the next twenty years, this will produce an important shift in the makeup of the Hispanic population with second-generation Latinos — the U.S.-born children of immigrants — emerging as the largest component of that population."
This shift is certain to have an effect on media, because the new generations lean heavily toward English dominance. According to a 2004 Pew survey on media usage, only 3 percent of second-generation Latinos surveyed say they prefer Spanish-language media; 53 percent say they prefer media in English, while 43 percent say they access both equally.
In the world of Hispanic media, English versus Spanish is still a big debate. For Carlos Pelay, president of Media Economics Group in Ft. Lauderdale, Fla., it is "the question." His consultancy tracks advertising trends in Hispanic print media, and Pelay says emotions are beginning to flare on both sides of the linguistic controversy. The debate's volume, he says, is growing as magazines propagate and more television outlets, such as mun2 and Sí TV, focus on Latino youths in English. That leaves advertisers wondering whether to target Latinos in English, Spanish or both.
Tu Ciudad has not stayed on the sidelines of the debate. The magazine has forged a strategic alliance with New American Dimensions, an ethnic market research firm based in Los Angeles. Together, they organized a fall 2005 marketing event designed to persuade unbelievers to embrace the English-language paradigm. The one-day conference in New York released the research findings, including surveys from 1,135 acculturated, self-identified Latinos, ages 14 to 29. Seventy-eight percent of the respondents say they prefer to read magazines in English. The study also states that the proportion of magazine readers increases with each generation.
Tu Ciudad has had early success snaring plum advertisers, such as Louis Vuitton. But big advertisers, always cautious, have just started to look at English-language print ads for Latinos. The tentativeness is not surprising to Stephen Palacios, executive vice president and Hispanic practice leader at research and consulting firm Cheskin in New York.
Whatever their target, major advertisers are interested, above all, in numbers. Since they compete head-on for readers with general-market media, Latino magazines in English are "bound to be niche [players]" until they develop "content that has an appeal beyond the Latino segment," Palacios says.
In others words, they won't hit the big leagues unless they have crossover appeal enabling them to build scale. But, Palacios says, no magazine has "cracked that code yet."
Niche players or not, English-language magazines have managed to carve out space within the Latino market. (See chart, page 27) And they are at the forefront of trying to sell advertisers on the idea that acculturated Latinos, especially as the second generation comes of age, should be targeted "in-culture" as opposed to merely only "in-language."
Besides Latina magazine, by far the leader in this category with ad revenue of $27 million in 2005, according to Media Economics Group, titles include women's magazine Catalina; business magazines Hispanic Trends, Latina Style, Latino Leaders, Hispanic Business and Poder (soon to be reintroduced under new leadership); general-interest magazine Hispanic; student-targeted Latino U.; music magazines Batanga and Bridgez; as well as lifestyle magazines Bello and Urban Latino and men's titles Hombre and Open Your Eyes. There also is new player Tu Vida, the biannual polybagged women's title from Hearst Communications Inc., which debuted November 2005.
OUTLOOK ON 'DOUBLE' MARKET
Despite the growing interest in English-language publications, it's important to note that Spanish-language print still dominates. As of year-end 2005, 79 percent of the content in Hispanic magazines was in Spanish, according to Carlsbad, Calif.-based Latino Print Network, which tracks some 477 magazines, including national, local and international magazines with U.S. circulation. The Latino Print Network's figure is a page-by-page analysis weighted for circulation, meaning it reflects the actual quantity of content being published rather than the proportion of titles publishing in each language.
Spanish is still king. Or as Tu Ciudad's Figueroa puts it, "Everyone and their mother has launched a magazine in Spanish."
He adds, "In the process we forgot that there's a lot of Latinos who don't speak Spanish or don't speak it to the extent they feel comfortable reading in it." That's somewhat of a surprise coming from Figueroa, since he successfully launched People en Español, which engendered a whole generation of in-Spanish magazines after debuting in 1998.
It could be seen as a sign of changing times, then, that at age 48, Figueroa is something of the éminence grise at Tu Ciudad.
Figueroa, born in Puerto Rico and raised in Michigan, says he sought to strike a delicate balance with Tu Ciudad. He wanted to show Latinos as integral to the U.S. mainstream, and with access to "aspirational" goods and services just like any other upscale consumer. But it was also important, he says, to show acculturated Latinos don't discard their roots or identity when they "make it" and are proud of their accomplishments.
"Maybe I'm completely biased and drinking too much of my own tequila-laced Kool-Aid, but I do think that the magazine is both aspirational and inspirational," Figueroa says.
With this formula, Tu Ciudad is betting it can draw acculturated Latinos out of general-market media and make them easier for advertisers to reach. So far, Tu Ciudad is looking good. Its December/January holiday issue had 25 full-page ads out of a 100-page book, including Macy's, Mercedes-Benz and Absolut.
Gamboa says he aims for 250 ad pages in 2006, the first full year of publication. And already, he's thinking of expansion. The California-born son of Mexican immigrants says Tu Ciudad is meant to go national, with versions in multiple cities. "We definitely feel we are a national brand," he says. Where next? Gamboa lets slip that New York is especially attractive, saying, "It would be safe to say that the top 10 Latino markets is what we're after."
If Tu Ciudad succeeds, it would tend to add credibility to an "English boom" scenario that some magazine publishers and analysts believe possible. In that scenario, Tu Ciudad, Latina and Hispanic and other titles will lure more English-speaking Latinos who had read non-Hispanic magazines. But they do so without subtracting readership from the traditional, immigrant-focused magazines.
The possibility is so intoxicating it has some publishers seeing double. "We may have two markets in one," says David Taggart, group publisher for the Mexico City-based magazine publishing giant Editorial Televisa, which publishes scores of magazines in some 20 countries. Taggart explains his double vision: "First, we have the Hispanic dominant [Spanish-language] market, which is a pretty segmented market. But then you've got, on the flip side, the English-language market, and the model for that is the African-American market. It showed that ethnic titles can coexist with mainstream titles and flourish."
Taggart already has started to explore this "flip side." Editorial Televisa announced in late 2004 it acquired its first English-language magazines, Hispanic (founded in 1987, with an ABC-audited circulation of 300,000) and Hispanic Trends. Following Taggart's logic of paralleling the African-American market, these titles could be seen as analogous to Ebony and Black Enterprise magazines.
But Pelay of Media Economics Group warns against easy comparisons. He says second- and third-generation Latinos are more fragmented. Not only do they not share the immigrant experience, but their accessing of Latino cultural roots is colored by their families' country of origin. Given cultural differences — New York Puerto Ricans and Mexican Americans in California, for example — it may be difficult to sustain national magazines aimed at them, he suggests.
But Latina magazine's rate base of 400,000 suggests this can be done. "Acculturated Latinos in big markets have a lot of commonalities," says Fabio Freyre, the Cuban-American, Florida-born CEO of Latina Media Ventures, publisher of Latina. "There's fashion, contemporary culture, informational needs on lifestyles and issues that perhaps their parents have never faced."
YOUTH STILL MATTERS TO ADVERTISERS
Part of the allure of Tu Ciudad is that publishing a city magazine allows for fine-tuning content for the predominant Latino identity in a given market. But another challenge to the double-market scenario is advertisers' continuing faith in Spanish. Media Economics Group tracked the language of advertisements placed in 66 Latino magazines in 2005. By a four-to-one margin, dollars went to ads in Spanish. That dominance was even more pronounced among the 50 top advertisers in the magazines: Spanish-language ads accounted for 91 percent of their spend, according to the study. Procter & Gamble, for example, placed nearly 97 percent of its ads in Spanish. Even in English-language titles, Spanish ads were abundant. In Latina, 45 percent of 2005 ads were in Spanish.
With such advertiser bias toward Spanish, it is no wonder English-language Latino magazines still seem like a new frontier.
One marketer hip to English as a vehicle to reach Latinos is PepsiCo. But Pepsi's less than satisfactory run with English-language Latino magazines in 2005 shows there are still limitations to what these magazines can do, at least for now. Pepsi's print buy included English-language titles such as Latina, Urban Latino and Batanga, but also some Spanish-language titles like People en Español. The effort, says Lara Montilla, senior manager for multicultural marketing at Pepsi-Cola North America, was aimed at youth themselves and gatekeepers (marketing lingo for people that are influential in your target market), but Pepsi was not entirely satisfied with the results. In particular, Montilla felt she was not making enough of an impact on her youth target, even with the young-skewing titles.
"[Youth-oriented] magazines were still not as developed as we would have wanted them to be," Montilla says. "The youth are looking at these publications, yes, but they're looking [more] at magazines looking at the hip-hop world, more African-American initiatives."
This year, she says, Pepsi won't buy ads in Hispanic magazines at all, though the company is more interested than ever in the market. As far as magazines go, Montilla will take a wait-and-see approach in preparation for 2007, while keeping tabs on how Latino magazines aimed at young people develop.
In Latino advertising overall, though, English is gradually gaining. In 2002, nearly 95 percent of billings reported by Hispanic Business magazine's top 25 Hispanic ad agencies were for Spanish-language services. In 2005, the proportion dropped to 81 percent, according to the magazine.
SUBSCRIPTIONS NOT AN EASY SELL
Despite the growing interest in Latino titles, publishers still agonize over the poor performance relative to the general market.
Two numbers are key: 3 percent and 15 percent. According to TNS Media Intelligence, the first is the tiny sliver of the total Latino ad pie that goes to Latino magazines. The second is the much larger share of general-market ad dollars that go to magazines. These numbers were the focus of the first Hispanic Magazine Summit, held in October, in tandem with the American Magazine Conference.
Why do Latino magazines fare so badly in comparison? To begin with, there is a vacuum that could be filled by more magazines. According to Kirk Whisler, president of the Latino Print Network, by his organization's count there are 148 national Latino magazines circulating in the United States, including Puerto Rico. This "sounds like a lot but is really a drop in the bucket," says Whisler, considering that in the general market there are thousands upon thousands of titles.
But obstacles to establishing new Latino magazines have proved very stubborn.
The difficulty and cost of building paid circulation, especially out of the starting gate, is the most oft-cited discouragement. Subscriptions are not an easy sell in the Latino market. Foreign-born Latinos, especially, do not have a subscription culture. In their home countries postal systems are unreliable and subscriptions to magazines are rare. A vicious cycle ensues. Advertisers see soft paid circulation numbers and don't buy ads. Or they demand discounts. These, along with modest ad sales, can eat away at magazine revenues. This means the cost of building and maintaining paid circulation takes a bigger and bigger share of the budget.
Not surprisingly, magazine execs tend to take a bellicose attitude toward ad discounts. "The entire magazine world is facing [a discounting] epidemic," Gamboa says. Latino audiences should be sold "at a premium not as a discount," he adds, but admits everyone feels the pressure of advertisers' expectations. Though Tu Ciudad targets acculturated Latinos, Gamboa admits the readership is "slower" to subscribe.
Virtually every Latino magazine publisher also complains advertisers demand constant increases in paid circulation but aren't often willing to pay more for ads after audits show circulation has indeed increased. Most publishers, consequently, approach the numbers game with a humble attitude.
Even the giant Editorial Televisa, with enviable economies of scale, plays it safe. "We're being cautious about how we build circulation [with U.S. magazines]," Taggart says. "We're building circulation aggressively, but smartly and at a reasonable cost."
The circulation challenge is trickiest for start-ups. In January, Tu Ciudad announced a modest jump, 115,000 from its initial 110,000, thanks to new subscriptions. For now, the magazine's mixed model relies heavily on newsstand sales and controlled circ, meaning at least one free copy will be sent to selected households with subscription offers. The circulation manager estimates there are 400,000 targeted households the title will reach eventually through mailings and newsstands. Gamboa expects that by its 24th issue, Tu Ciudad will have a fully paid model.
Whisler is skeptical about the staggered approach. "Starting a glossy magazine in a controlled-circulation mode is a very expensive game," he says. "I think a quality subscription package is a much better way to generate subscribers that are loyal to a product."
KEEPING UP, OR NOT, WITH BIG PLAYERS
But how to generate subscribers without corporate backing?
Hombre magazine, a bimonthly Latino men's magazine in English (with abridged Spanish versions of articles) that launched in late 2004, also is pursuing a combination of controlled circulation and subscription and newsstand sales, says Honduras-born publisher and owner Francisco Romeo.
Bridgez, an English-language magazine that first published in 2004 and styles itself "hip-hop's Latino connection," has a "guerrilla distribution," explains Publisher Charlie Nuñez, 22. Bridgez reps in New Jersey, Southern and Northern California, Texas, Florida and Chicago place magazines in bodegas, barber shops, clubs and eateries. They also send trucks mounted with TV screens to promote outside clubs. "Traditional distributors don't know where our readers are," Nuñez says.
The third issue of Bridgez, out this month, has reggaetón star Don Omar and Bronx-born record producer Swizz Beatz sharing the cover. No one would dispute that Bridgez has it ear to the street, and Jose Cuervo has chosen Nuñez and Editor in Chief Ariel Gonzalez, 23, to be judges in its 2006 Cuervetón event, a nationwide reggaetón talent search and concert series that culminates with a final concert in May in New York.
Grass-root approaches may work, but big advertisers want numbers, and they want these publications to be audited.
Before Fuego folded, ad saleswoman Ramos-Noel said she was told by some advertisers that they would not buy in Fuego because of it was not audited. But then, she said, she saw the same advertiser in unaudited general-market men's magazines. "It always seems to be that there are more criteria and hoops to jump through when you're talking about a specific demographic, and urban Latinos is definitely something that has to be proven."
CROSSOVER POSSIBILITIES
Latina magazine, which reports the largest ad revenue among English-language titles (see sidebar, page 30), promotes its young, U.S-born, bicultural audience as the most desirable Hispanic consumer now and in the future. "There's a lot of runway left" in the acculturated Latino market, Freyre says.
There are precedents for crossover success. Hip-hop magazines have a diverse readership, and about 50 percent of readers of Giant Robot, an Asian American-targeted pop culture magazine, are non-Asian. Giant Robot has gone from an underground 'zine to a successful, nationally distributed title and a mini-multimedia empire, with retail outlets in California and an online store.
Is there a Latino Giant Robot on the way?
Maybe. As Tu Ciudad started up, Thomas Tseng, co-founder of New American Dimensions market research firm, mused on its possible crossover appeal.
He wrote in his blog: "There's a whole lotta hipster Latinophiles in the City of Angels, who are a shoe-in audience for this 'zine too."
People en Español Publisher Jacqueline Hernández-Fallous says there is more and more overlap every day between her title and People magazine. For example, the 2005 lists of the "50 most beautiful" featured several stars that made both her magazine and People's list. Teen People, she adds, already has a readership that is over 20 percent Latino and growing.
Hernández-Fallous calls today's Latino market an "all of the above" world. Acculturation and retro-acculturation coexist, along with every possible kind of hybridity, as Latino kids embrace every multicultural strand in the youth culture. Today's atmosphere is ripe for a Latino magazine's crossover success, but it won't be easy.
One thing is certain: If Latino magazines crack the crossover code and begin attracting "Latinophiles" in significant numbers, the woes over their razor-thin slice of the Latino ad pie are likely to fade into the past.
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