Essay 1360

From the final issue of Marketing y Medios…

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Diversity Advertising Fades Giving New Face to Print

By Jaime Mejía-Mazuera

In their quest for engaging consumers in more aggressive ways, corporations have steadily abandoned diversity ads — those ads that deliver a message about their commitment to the community, highlighting efforts to recruit a diverse workforce or hire minority suppliers — in favor of more direct-to-consumer messages. But the shift of those corporate dollars has hit some Hispanic magazines in the process.

“Corporations are pulling back budgets in what we call diversity advertising and putting more in hardcore advertising,” says David Taggart, general manager and group publisher of leading Hispanic publishing company Editorial Televisa, based in Miami. Instead, promoting products and services to Hispanics is becoming a preferred way to reach out. Editorial Televisa has been particularly hit by the trend, as close to 20 percent of the advertising budget of English-language magazines Hispanic and Hispanic Trends depends on so-called diversity dollars.

According to Media Economics Group, the Ft. Lauderdale, Fla.-based agency that monitors multicultural ad spending, Hispanic magazine reported ad revenue of $7.5 million in 2005, about 14 percent less than the previous year. Those figures are shy of the $31 million the magazine reaped in 2001.

The decline in diversity ads is not good news for some Hispanic business titles that also have suffered from an overall decline in spend by automakers, the consolidation in the telecom industry and the entry of new magazine players, along with several new media options available to advertisers. Taggart, however, is optimistic because as magazines break into new ad categories, consumer advertising overall is growing.

In fact, print advertising in Hispanic-targeted magazines is growing overall. Ad spend actually grew 27.4 percent from August 2005 to August 2006 for an estimated total of $22.7 million, per Media Economics Group.

And while the decline in diversity ads might be sore for some, Hispanic advertising agencies and media buyers say this is actually a good sign of evolution in the market.

“In the past it was all [advertisers] did,” says Alex López Negrete, president and CEO of Houston-based Lopez Negrete Communications. “Now corporations are becoming more sophisticated about what they are doing to reach the Hispanic community. So the budgets are being used in new and more diverse ways. Corporations also have a lot of new media options.”

López Negrete notes that diversity advertising belongs to a previous era, in which “the ads were in English and were mostly developed by general-market agencies.”

One Lopez Negrete client, Wal-Mart, is among those that still conduct diversity advertising in some magazines, but the retailer also has stepped up efforts to reach out with a more direct pitch.

“The message has to change at the consumer level. It is nice to know what you are doing with the community, but corporations have to invest in educating Hispanics on their products and services,” says Ricardo López Valencia, senior vice president for diversity markets at ING, one of the top 25 financial services advertisers in Hispanic magazines.

Not everyone is cutting back. Aetna, the health services company based in Hartford, Conn., says its budget is growing close to 10 percent to reach Hispanics through a message of supporting diversity.

“The big difference now is we are exploring many different avenues to reach the Hispanic community,” says Raymond Arroyo, Aetna’s head of diversity.

He says diversity ads are only one option for Aetna, which also, for example, has formed an alliance with the Hispanic Association of Colleges and Universities to support education among Hispanics.