Hispanic Market Profile—San Francisco Bay Area

NEW YORK A large and growing Hispanic population sometimes is not enough for a media market to attract suitable attention from advertisers. Such is the case with San Francisco-Oakland-San Jose, a market far better known for its Asian community than the nearly 1.5 million Latinos who call it home. Media buyers and sellers say Hispanic-targeted media have kept up with population growth but advertisers have not.

That’s partly due to perception because many Latinos live throughout the area, often far outside San Francisco’s highly visible center. One new wrinkle in the market’s stature is its just-released ranking on Nielsen Media Research’s new population estimates, sliding to No. 9 from last year’s No. 8 in total Hispanic TV households. The market is increasing in size, but the faster-growing Phoenix media market has surpassed it.

Still, the Bay Area market is worth another look by advertisers. Its Latino population in 2006 was slightly larger than the market’s Asian community at 1.47 million people versus 1.46 million, according to analysis firm SRC. The population also is forecast to grow from 1.5 million Hispanics this year to nearly 1.7 million by 2012, based on projections from Boston consultancy Global Insight.

“You’re not going to feel it in the downtown touristy areas, but the neighborhoods like the Castro or the Mission District, you certainly feel it and see it,” said César Angulo, general sales manager at Telemundo affiliate KSTS, Channel 48. “Then you go to San Jose, and everywhere you go is very Hispanic. You venture to Oakland and it’s the same thing.”

Still, Hispanic-targeted media in the market sometimes struggle to drum up ad revenue.

Advertisers spent $83 million in 2006, according to Hispanic Business magazine. That’s disproportionately low compared to other markets. San Francisco’s Latino population is 79 percent the size of Chicago’s, for example, but it generates only 67 percent of the ad revenue.

The San Francisco media market also is highly competitive, with ad budgets divvied up among several outlets.

There are seven Spanish-language TV stations, according to BIA Financial Network. Univision affiliate KDTV, Channel 14, ranked No. 1 in May among Hispanics 18 to 49 in prime time with a 9.7 rating, according to Nielsen.

Telemundo’s KSTS was No. 2 with a 2.5. TeleFutura KFSF, Channel 66, tied ABC affiliate KGO at No.3 with a 1.3 rating.

Azteca America airs on digital multicast station KBWB, Channel 20.4, and it’s also carried by DirecTV and Comcast. In June, it was dropped by Pappas Telecasting Companies.

Meanwhile, KSTS has challenged KDTV for revenue, if not ratings.

Media buyers say the station’s sales team has become stronger since NBC Universal acquired Telemundo in 2002. The station also is more aggressive than Univision’s KDTV in luring advertisers with added-value packages.

Yet last year, KDTV accounted for 3.5 percent of TV ad revenue, according to BIA, compared to KSTS’ 2 percent.

Univision also dominates the radio market with six of San Francisco’s 13 Spanish-language stations. Its KSOL “Estéreo Sol” 98.9 FM, with morning man Eduardo “Piolín” Sotelo, tied for No. 4 in San Francisco on an all-day basis in Arbitron’s Spring 2007 book. It ranked No. 1 among Hispanic stations.

SBS’ KRZZ 93.3 FM was tied at No. 13 overall and ranked No. 2 among Hispanic stations.

“Three or four years ago, KSOL was the dominant station and everybody else was way down,” said Angelica Contreras, the San Francisco-based media director for ad agency The Latino Group. “But then KRZZ and [Clear Channel’s] KSJO came in. Now there’s not one station that dominates the entire day.”

The radio market is heading for a shakeup. Arbitron in April will transition two of the radio markets in the area, San Francisco and San Jose, from paper diary measurement to the electronic Portable People Meter. The PPM is now used in Houston and Philadelphia and has resulted in lower ratings for some stations.

Meanwhile, the print market is competitive throughout the area with seven audited publications, according to Latino Print Network. The largest of these is ImpreMedia’s El Mensajero, with a weekly circ of 111,564.

Fronteras de la Noticia is the second-largest paper, with a weekly circ of 55,268. In 2005, the San Jose Mercury News folded its Nuevo Mundo and replaced it with Fronteras, a syndicated publication mostly written in Mexico. The paper now is distributed by the privately owned MediaNews Group.

Print publications, in general, have struggled to hold onto readers and ad revenue as the Internet grows. But newspapers are responding with Web sites of their own.

Frank Andrade, co-publisher of the bilingual weekly La Oferta in San Jose, noted, “The more sophisticated readers will read print and online. But the immigrant market won’t.”

Media buyers note that the Internet is increasingly used by advertisers to reach Hispanics, at least when budgets are large enough to extend beyond broadcast. The same holds true for local cable TV buys.

Comcast Spotlight has been expanding its offerings for advertisers. Its Adcopy service, for instance, allows advertisers to air commercials in English and Spanish at the same time in different neighborhoods.

“About 86.5 percent of our Hispanic consumers are English speakers,” said Ingrid Nelson, vp and general manager for Comcast Spotlight in San Francisco. “We can combine the networks for the English-speaking consumers and then, for Spanish-speaking Hispanic consumers, we have several networks, including Galavisión, Fox Sports en Español and mun2.”

About 30 percent of Latinos have household incomes of $75,000 or more, according to Scarborough. That’s 31 percent higher than the average in the 32 Hispanic markets measured by the tracking firm. And one-fourth speak only English, 21 percent above average.

That reflects the diversity of the area’s population, said Hans Johnson of the Public Policy Institute of California.

“It’s a very bifurcated community,” said the San Francisco-based demographer. “You have the educated elite who have left their home countries and have done quite well. Then you have those who are almost economic refugees who are pushed out of their home countries because of the lack of opportunity.”

The diversity, and seeming complexity, of San Francisco-area Latinos may be a reason advertisers shy away from the market, say media buyers and sellers, even while outlets are serving Spanish-dominant and second- and third-generation Hispanics. But the sheer number of Latinos and the affluence of many in the market makes outreach worthwhile.