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Home =BB = Newsletter=20 =BB Look And Listen Latino Style

Look And Listen Latino Style

A Special Report on Out Of Home Advertising in = the U.S.=20 Hispanic market

Published: July 23, 2007

Slowly but surely, Hispanic out-of-home advertising is shedding = its=20 reputation as a medium that many advertisers view as unnecessary = but nice=20 to have if there is a little extra money in the budget, say out of = home=20 executives. Out-of-home advertisers cite three main reasons for = the=20 growth:

agencies are getting more comfortable about including = out-of-home=20 advertising in their media plans and pitching it to clients=20
an increased number of Latino-focused radio and television = offerings=20 reveal increased audience fragmentation. As audiences fragment, = they get=20 smaller and there are more targets. That, say industry = executives, makes=20 out of home more vital because advertisers need more vehicles to = reach=20 as many people as they had previously connected with through = fewer media=20 options=20
a desire for diversified media plans aimed at Hispanic = consumers=20

Another influencing factor is that both agencies and = advertisers have a=20 better understanding of the medium - how it works and what it can = do for a=20 brand.

"I think marketers are realizing that out-of-home may be the = only=20 medium that can provide day-in and day-out presence in the = marketplace=20 cost-effectively," says Arthur Rockwell, vice president of CBS = Outdoor=20 Latino.

As clients look to add layers to their Latino-focused media=20 initiatives, out-of-home advertising serves as a way to connect = their=20 brand to consumers, explains Tory Syvrud, co-founder of = Sacramento-based=20 City Reach Latino, a company that until its recent reorganization = utilized=20 a fleet of rolling billboards for advertising campaigns (HMW= =20 Archives 6/18/2007. City Reach Latino To Suspend = Operations).=20 "Out-of-home is playing a larger and larger part of that," he = adds.

Hispanic out-of-home advertising is poised to grow along with = the=20 entire out-of-home segment. Overall, the out-of-home industry is = expected=20 to grow 7.9 percent in 2007 to more than $7.3 billion, according = to=20 PricewaterhouseCoopers. The transit and cinema segment could = increase by=20 up to 12 percent in 2007, according to Stephen Freitas, chief = marketing=20 officer of the Outdoor Advertising Association of America (OAAA). =

The growth rate for the Latino out-of-home segment is forecast = to be=20 comparable. "We expect our Hispanic out-of-home revenue to = increase about=20 17 percent this year," says Rockwell.

At Clear Channel Outdoor, the outlook is "double-digit growth," = explains Pedro Mili=E1n, vice president of multicultural sales and = marketing. "Clients continue to add percentage points to their = overall=20 Hispanic ad budgets and many of our small- and mid-sized markets = are=20 seeing increases in Hispanic spending."

Small out-of-home companies are also noticing an increase. For = example,=20 Nevada-based Border Billboard operates three 50-foot LED = billboards along=20 the U.S.-Mexico border. Marketers allocate more dollars to = out-of-home=20 advertising as they come to know more about its usefulness in = reaching the=20 Hispanic market, says chief executive Jennifer Stefano.

Budgets Inch Upward.- Budgets for Latino out-of-home = initiatives=20 are growing incrementally, although they continue to be a tiny = slice of=20 overall Hispanic advertising budgets. Less than five percent of = Latino=20 advertising budgets are dedicated to out-of-home, say Mili=E1n and = Syvrud.=20 But Rockwell believes the figure is even worse and is actually = closer to=20 four percent.

Rockwell notes anecdotally that he sees Hispanic budgets for=20 out-of-home efforts increasing but remaining miniscule compared to = non-Latino spending. "Our No. 1 out-of-home client spent about $6 = million=20 on Hispanic, and most of our top 10 clients spend between $1 = million and=20 $2 million on Hispanic," says Rockwell. "Probably our biggest = single=20 non-Latino account is roughly $40 million. Non-Hispanic = out-of-home=20 budgets are usually more than eight to 10 times more than Hispanic = budgets."

Many marketers still spend nothing at all on = Latino=20 out-of-home advertising. "I was surprised to find from my sales = people how=20 many agencies have zero out-of-home in their Latino budgets or = don't do it=20 at all because they focus on television and radio," says Syvrud. =

Although the market for Hispanic out-of-home efforts is growing = and=20 more advertisers are investing in the medium, success is not a = guarantee.=20 City Reach Latino's recent halt in operations came two years after = the=20 company's launch. Despite the setback, the company has been sold = to a new=20 investment firm and operations are expected to restart once the = deal=20 closes - perhaps as early as mid-August.

"Our selling curve was much faster with non-Latino agencies and = media=20 buying companies like Starcom and Tapestry than with Hispanic = agencies,=20 except for independents like Zubi Advertising, The Vidal = Partnership and=20 Grupo Gallegos," says Syvrud. City Reach Latino clients have = included=20 Verizon, Ford and Washington Mutual.

Zubi turned to City Reach for out-of-home campaigns for the = Ford Edge=20 model, Washington Mutual and Winn-Dixie. "We are always looking = for viable=20 out-of-home opportunities where some sort of tracking mechanism or = measurement system is attached," says Joe Zubizarreta, COO of = Miami-based=20 Zubi. "One thing we liked about them was the GPS system that let = us know=20 where the trucks were; that they were in the right place at the = right=20 time."

New Efforts Target Latinos.- A handful of small- and = mid-sized=20 out-of-home players have launched a variety of new efforts to = target=20 Hispanics. SeeSaw Networks, a San Francisco-based out-of-home = digital=20 media company, recently increased its ability to reach the Latino = market=20 by adding Border Billboard as an affiliate. Under the agreement, = SeeSaw=20 will represent Border to advertisers.

Border Billboard operates its three billboards on the Mexican = side of=20 the border near San Diego and Tijuana, where about 175,000 people = cross=20 every day. The average waiting time at the border crossing is at = least 45=20 minutes, giving people in vehicles ample time to notice the = billboards.=20

"Combined with SeeSaw's other venues in markets that index high = among=20 Hispanics, advertisers have the opportunity to reach a significant = segment=20 of the billion-dollar U.S. Hispanic market," Peter Bowen, CEO of = SeeSaw=20 Networks, said in a statement. "The size and unique location of = these=20 digital billboards engage a highly sought-after audience who have=20 tremendous buying power."

Border Billboard's displays incorporate full-motion 30-second = video and=20 text messaging; viewers can interact with the ads and respond to = them=20 using their cell phones. Advertisers have included McDonald's, = Burger=20 King, Church's Chicken, Telemundo and Coca-Cola, says Stefano. The = company=20 wants to acquire additional billboards near the U.S.-Mexico = border.

Looking to target the Hispanic market, New York-based Fuel = Outdoor in=20 December 2006 purchased Miami-based Sarmiento Outdoor's regional = office.=20 Sarmiento - an established company in South America - opened a = regional=20 office in Miami in 2002 to specialize in bus bench advertising = after=20 winning an exclusive 15-year contract with the City of Miami to = maintain=20 1,500 bus benches (HMW= =20 Archives 1/29/02. Expanding).

"Fuel was focused on just the general market until they bought=20 Sarmiento to help target the Hispanic market in Miami and other = cities=20 where they do business," says Pablo Cremaschi, general manager of = Fuel=20 Outdoor's Miami office and former head of Sarmiento's Miami = operations.=20 "We know the Hispanic market and have good relationships with = agencies=20 that buy the market. Currently, Fuel has operations in New York;=20 Washington, DC; Philadelphia; Los Angeles; and San Francisco.

Earlier this year, Telemundo's KXTX-Channel 39 in Dallas = partnered with=20 CBS Outdoor Latino to introduce a new out-of-home approach to = advertising=20 Spanish-language television. KXTX opted to publicize its new 5 PM=20 30-minute weekday newscast by using illuminated free-standing = kiosk=20 displays (HMW= =20 Archives 4/2/07. 'Conteo' Campaign Counts On Kiosks In = Dallas).=20 Each day, the billboard-like kiosks have the potential to attract = tens of=20 thousands of daily impressions from passing drivers and = pedestrians. The=20 kiosks are part of CBS Outdoor's inventory and were not = specifically=20 created to be a Hispanic product.

Another new technique - out-of-home video advertising - is = emerging in=20 the Hispanic market. Three NBC-owned television stations in Los = Angeles=20 now provide five minutes of local programming each hour via = Transit TV, an=20 out-of-home video network company based in Orlando (HMW= =20 Archives 2/26/07. Transit TV Teams With NBC, Telemundo In Los=20 Angeles). Riders can view local weather, sports and = entertainment=20 news in Spanish from Telemundo's KVEA-Channel 52 and from NBC's=20 independent KWHY-Channel 22. English-language news vignettes come = from=20 KNBC-Channel 4. The news briefs, which began February 21st, appear = on=20 4,400 screens placed on 2,200 buses. The network reaches 1.2 = million=20 riders every day, says Robert Bridge, vice president of marketing = for=20 Transit TV.

Los Angeles was Transit TV's first Spanish-language market. In = June,=20 the company landed a contract in San Diego that will eventually = involve=20 Spanish-language television, says Bridge. The company is still = ironing out=20 the final details of the deal, and Bridge declined to discuss = specifics.=20 The company is also targeting San Francisco, Miami and Dallas with = bids to=20 advertise on transit systems in those cities.

"We are definitely targeting the Hispanic market; It's part of = our=20 business," says Bridge. "We target transit agencies and, = inevitably, in=20 lots of markets a high percentage of the users are Hispanic." He = points=20 out that 49 percent of the aggregate transit users in the five = markets=20 that Transit TV targets are Latino.

Lunch-truck advertising aimed at Hispanics is a thriving = business for=20 Trimex Mobile Marketing, which has offices in San Diego, Houston = and=20 Orange County, California. The company's revenue exceeds $2 = million a=20 year, up from less than $1 million in 2000. In Texas, Trimex's top = market,=20 the company places ads on the sides of more than 4,000 trucks in = areas=20 such as Houston, Dallas, San Antonio, Austin, Waco and the lower = Rio=20 Grande Valley. Clients include the Mexican soft drink brand = Jarritos, Bank=20 of America, Citibank, Visa, Toyota and Wal-Mart.

The ads reach thousands of people each day, with consumers = exposed to=20 the same ad several times a week because the trucks make the same = stops=20 daily. "The advertising targets Hispanics 18-49 eight hours a day = when=20 they aren't exposed to other advertising," says Trimex co-owner = Tim Cuny.=20 He points out that the lunch trucks can provide information and = samples to=20 consumers with marketing representatives who do ride-a-longs. = Visa, for=20 instance, put a spokesperson on a different truck every day to = explain=20 their prepaid credit card.

Big Companies Take The Lead.- Some of the leading = companies=20 active in Hispanic out-of-home advertising - with the bulk of the = dollars=20 going to billboards - include Heineken, Toyota and McDonald's, = which=20 regularly include this medium in their overall Latino initiatives. =

According to the Outdoor Advertising Association of America, = the Top 10=20 advertisers in the entire out-of-home industry are: McDonald's, = Cingular=20 Wireless, Verizon Long Distance, General Motors, Verizon Wireless, = Anheuser-Busch, Coca-Cola, AT&T Long Distance, Geico and Sony. =

The most active categories in the full out-of-home industry = are: local=20 services and amusements; insurance and real estate; retail; media = and=20 advertising; public transportation, hotels and resorts; = communications;=20 financial; restaurants; automotive dealers and services; auto = accessories=20 and equipment.

Many of the most active advertisers are also taking the lead in = using=20 out-of-home advertising to connect with Latinos. The McDonald's = Co-Op for=20 the New York Tri-State area included billboard advertising as part = of its=20 "Las Ma=F1anitas " campaign that launched in June (HMW= =20 Archives 6/18/07. McDonald's Wakes Up "El Cafecito").

In March, Heineken used out-of-home as part of its "descubre lo = delicioso" campaign for Heineken Premium Light (HMW= =20 Archives 3/19/07. Una Fr=EDa). Toyota included = Spanish-language=20 out-of-home as part of its campaign, launched in February, to = support its=20 new full-size Tundra pickup truck.

Better Metrics On The Way.- Insiders point out that = there is=20 ample demographic research to help advertisers place out-of-home=20 advertisements in areas where Latinos are likely to see them.

"The industry has made progress in identifying areas where = Hispanics=20 live and what routes they use to get to work," says Zubizarreta. = "We can=20 identify life patterns so we can use out-of-home to intersect with = Hispanics outside of their homes."

However, the industry has long clamored for more accurate ways = to=20 measure how many people actually notice billboards and read what = is on=20 them. Improved techniques could eventually boost all out-of-home = spending.=20 Better metrics could double the entire out-of-home industry's = share of all=20 advertising spending to 4.4 percent, according to recent report by = Wachovia Capital Markets.

Increased spending would likely benefit the Latino segment as = well,=20 industry executives say.

"One of the issues in out-of-home is the lack of good = measurement that=20 agencies and advertisers can accept and compare with the rest of = their=20 measurement models for other advertising," says Rockwell of CBS = Outdoor=20 Latino. "Better measurement will have a dramatic impact on how = much is=20 spent in the general and Hispanic markets."

The Traffic Audit Bureau (TAB), which conducts the standardized = measurements used by out-of-home companies, plans to introduce a = new=20 measurement technique for 200 markets in October 2008. The TAB is = working=20 with three research firms to track travel patterns, traffic counts = and eye=20 movements of consumers who pass outdoor signs. TAB's information = would be=20 free to members.

Nielsen Outdoor is developing a competing global positioning = system=20 called "Npod" that is designed to improve its measurement of = viewing of=20 outdoor ads. The company will make the data delivered by "Npod" = available=20 for purchase.

In May, the OAAA introduced a web-based research template that=20 advertisers can customize to study the recall, recognition and = awareness=20 of out-of-home advertisements. Norm Hecht Research developed the = template,=20 which allows advertisers to compare results of out-of-home = campaigns with=20 other forms of advertising.

"It's very hard to actually capture how many people passing by = a=20 billboard actually notice it," says Mili=E1n of Clear Channel. = "But any=20 improvement in measurement always helps to justify media = expenditures=20 more."

Digital Is Slow To Develop.- Digital = billboards -=20 which allow passerby to use cell phones to send text messages or = call=20 telephone numbers listed on the boards to enter contests, respond = to=20 surveys and listen to and view advertising messages - are having a = tougher=20 time "catching on" with Latino consumers.

Why? Digital billboards are far from omnipresent; there are = only=20 several hundred nationwide, according to the OAAA. There's also = the budget=20 factor, notes Rockwell. Digital billboards are more expensive and = Latino=20 out-of-home budgets remain small.

Clear Channel has already rolled out digital billboards in 10 = U.S.=20 markets, with some in high-density Hispanic neighborhoods, = explains=20 Mili=E1n. "Hispanic agencies generally don't have the budget or = inclination=20 to do it, but they are at least asking about it," he adds.

Additionally, Clear Channel has been rolling out = English-language=20 interactive touch screens in 1,000 taxis in New York and Chicago. = The=20 screens feature sports scores, weather and other information from = NBC=20 television along with advertising. Eventually, the company may = offer the=20 screens in Spanish, Mili=E1n notes.

Slow But Steady Growth Ahead.- The Latino out-of-home = segment=20 will eventually become more than a peripheral player in the = Hispanic=20 advertising world, industry executives agree. More advertising = agencies=20 will look to incorporate out-of-home into their pitches to clients = as=20 measurement techniques improve and they become more comfortable = with the=20 medium, notes Zubizarreta.

Another factor that will contribute to the growth of = out-of-home=20 advertising as a viable medium to reach Latinos: population = increases. As=20 the number of Hispanics in the U.S. grows, more of them are = commuting to=20 work in cars and public transportation.

"The day will come when Spanish-language interactive billboards = are=20 more common. Hispanics over-index for mobile devices and = downloading=20 information, and prices for such billboards will eventually come = down,"=20 says CBS Outdoor's Rockwell.

Eventually, there will be more cross-over between Spanish- and=20 English-language out-of-home campaigns. "Traditionally, we've seen = separate out-of-home campaigns for the English and Spanish = markets," says=20 Clear Channel's Mili=E1n. You will see more experimenting with = out-of-home=20 targeting the Hispanic market with English words and phrases and=20 non-Latinos with Spanish words and phrases, he adds.

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