Phoenix in the Spotlight

NEW YORK Some say Phoenix is a conflicted metropolis: It embraces its burgeoning Latino population but also holds it at arm’s length.

On the positive side, advertisers are taking notice and funneling millions of dollars into Hispanic-targeted media in the Phoenix marketplace, which stretches north to ski town Flagstaff and south to Tucson. New media outlets are continually entering the market to challenge established players, giving media buyers more options and added leverage in negotiations.

Less positive is Arizona’s strict employer-sanctions law, which goes into effect Jan. 1. If it survives legal challenges, employers who hire undocumented workers will lose their business licenses. Advertisers are waiting to see what effect this law will have on population growth, but already some immigrants, documented and undocumented, are not staying put to see the outcome.

“Advertisers have not reacted yet, but they are very cautious about how their advertising strategies are being laid out,” said Fernando Gomez, promotions and marketing director at Sun City Communications, which owns radio station KVIB “Latino Vibe” 95.1 FM. “Most of them are in a holding pattern.”

Advertisers have been beefing up budgets as the population soars. Ad spending in 2006 on Hispanic-targeted media was up 6.5 percent over 2005, to more than $62 million, according to Hispanic Business magazine. Advertisers placed $30 million on television, $18 million in print and $14.5 million on radio.

Phoenix has 1.36 million Latinos, accounting for 28 percent of the population, according to forecasting firm Global Insight. The area grew by 331,000 Latinos in the past five years and, provided the new law doesn’t stymie growth, it’s expected to add another 363,000 by 2012.

About 81 percent of Latinos are of Mexican descent, according to SRC LLC. Phoenix surpassed San Francisco this year to become the No. 8 Hispanic television market, with 358,440 TV households, reports Nielsen Media Research.

The population is young and largely bilingual. About 29 percent of Latinos prefer to speak only English, 36 percent higher than average for Hispanic markets tracked by Scarborough Research. Another 38 percent are bilingual or prefer English over Spanish.

“Even general-market agencies and clients that want to target the general market realize it’s a blended market now,” said Adriana Castro, a media buyer at Results Media Group in Phoenix. “There are English-dominant Hispanics, so you need to find the right media mix if you want to target the entire community.”

The Phoenix media market is dominated by television, and the TV market is dominated by Univision affiliate KTVW, Channel 33, according to Nielsen. KTVW is being challenged by new stations, but its hold on the ratings remains intact.

KTVW had a 17 rating in Hispanic households in prime time in May. ABC affiliate KNXV Channel 15 ranked No. 2. CBS’ KPHO Channel 5 and Telemundo affiliate KTAZ Channel 39 tied at No. 3 with a 2.6 rating. KTAZ became a full-power station only last year.

KTVW also dominates in local news with Noticias 33. KTAZ ranked behind NBC’s and CBS’ affiliates.

TeleFutura’s KFPH Channel 13 and Azteca America’s KPDF Channel 41 trailed far behind the other stations. Still, the Hispanic-targeted TV market is in growth mode. Azteca’s KPDF went on air in 2003, and LAT TV’s low-power station KVPA Channel 42, which is also carried by satellite service Qwest, debuted in May 2006.

Phoenix is also one of only two markets where bilingual cable network/local TV station hybrid MTV Tr3s has a full-power station, Bela Broadcasting’s KMOH Channel 6. The other full-power market is Los Angeles.

“When you look at the profile of our target, there are certain markets that make more sense than others,” said Lucia Ballas-Traynor, senior vice president and general manager of MTV Tr3s. “Most of the growth in Phoenix has come from very young demographics, which is important to us.”

Meanwhile, there are three audited publications in the market, according to Latino Print Network. The Arizona Republic’s weekly La Voz, published since 2000, has a circulation of 68,578. The paper also distributes TV y Más, a free television guide, which has a 85,587 circ.

Prensa Hispana has been in the market since 1991 and has a 64,925 weekly circ.

The print market also is competitive with newer entries, such as English-language lifestyle magazine Latino Future and upscale English-language regional news magazine Latino Perspect!ves. Both are in the process of being audited.

“We saw there was a significant English-language market,” noted Jim Diaz, co-founder of Latino Perspect!ves. “In the media business, bilingual people may listen to radio and watch TV in Spanish, but they tend to read in English.”

The Hispanic radio market in Phoenix is competitive with 13 stations, according to BIA Financial Network, including five owned by Univision and four by Entravision Communications.

The radio marketplace has been stable the past few years. Univision’s KHOT “La Nueva” 105.9 FM ranked No. 2 among stations and No. 1 among Hispanic-targeted stations in Arbitron’s Spring 2007 book. It had a 4.9 rating on an all-day basis. KHOT has a lock on morning drive with Eduardo “Piolín” Sotelo.

Univision’s KQMR “Recuerdo” 100.3 FM ranked No. 2 among Spanish-language stations with a 3.1, followed by Entravision’s Mexican regional 103.5 KLNZ-FM, which had a 2.6 rating.

These stations have had a strong new competitor for the past two years in Sun City’s bilingual KVIB “Latino Vibe” 95.1 FM. It ranked No. 4 among Hispanic-targeted stations with a 2.1 rating, up from a 1.9 in Spring 2006.

The station got its start with a reggaeton format but has been shifting toward a mix of English- and Spanish-language hits called Hip-Pop. KVIB’s Gomez said media outlets in Phoenix until recently had not done a good job of reaching young, bicultural Latinos.

“Many Latinos were not being spoken to or catered to in their music,” Gomez said. “They could only get that from TV or the club scene or iPods or the Internet. We came in to fill that void.”

Given the healthy population growth, media buys can expect to stay on target.

“The color that drives advertising is green,” said Louie Moses, president of Phoenix-based ad agency Moses Anshell. “If there is an emotional connection to our target, whether that target is an American citizen or not, it’s about what will motivate that person to buy that product or service.”