Spanish-Language El Clasificado Balances Print Growth With Online Push
Martha de la Torre and Joe Badame run El Clasificado, the largest free, weekly Spanish- language classified print publication in the U.S., reaching more than 1.5 million people. Photographer: Pablo Scarpellini/El Classificado via Bloomberg
Growing up in East Los Angeles, Martha de la Torre spoke South American-influenced Spanish, which often elicited playground taunts from her classmates, mostly Mexican- Americans. Midway through elementary school, she swore she’d never speak Spanish again, except to her Ecuadorean grandmother.
Today she runs El Clasificado, the largest free, weekly Spanish- language classified print publication in the U.S., reaching more than 1.5 million people. It’s the flagship title of the thriving 130-employee publishing company de la Torre and her husband, Joe Badame, started 23 years ago for Southern California’s Latino population.
In June, the couple rebranded, changing their company’s name from El Clasificado to EC Hispanic Media to reflect the growth of their five online editions as well as their geographic expansion into the agricultural heart of Central California. With 2010 revenue of $16.3 million, the business is on track to hit $19 million this year, de la Torre says.
“El Clasificado is a marvelous niche product,” says Peter M. Zollman, founding principal of marketing firm Advanced Interactive Group in Altamonte Springs, Fla., which publishes Classified Intelligence Report. “It takes a long time to win [the Hispanic market’s] trust and loyalty, but once you have it, you keep it.” While online sales for classifieds in the U.S. have more than doubled to about $6 billion since 2006, Zollman says, the overall industry has shrunk to about $15 billion, half its 2006 total, due to the economic downturn and the collapse in classified revenue at most daily newspapers.
Bloomberg contributor Karen E. Klein spoke recently to de la Torre and Badame, an Italian-American who speaks even less Spanish than his wife, about their strategy for future expansion. Edited excerpts of their conversation follow.
Karen E. Klein: So many print publications have seen their readership and distribution decline over the past decade. Is that happening to El Clasificado?
Martha de la Torre: For years, we’ve been in fear of print disappearing just like everyone else. We ended 2010 principally a print company. Print ads account for 98 percent of our revenues. But we’ve also moved into digital, which accounted for about 1 percent of our revenue in 2010. Year-to-date, digital ads have grown to about 5 percent of our total revenue.
Joe Badame: We’re not going away from print. Our print revenues increased close to 16 percent last year and our print circulation is up 10 percent from 2010 to 2011. The demographics are working in our favor.
Q: The latest immigration data have shown that fewer Mexicans are emigrating due to improved opportunities in Mexico and the economic downturn in the U.S. How will that affect your success as a Spanish-language company?
Badame: It will have a long-term effect on us, maybe five to 10 years out. But we have such a big market of Hispanics here already; there are about 35 million in California and we’re still at 455,000 circulation so we haven’t come close to saturating the market. And the birth rates are much higher, so we don’t expect it to have a huge impact immediately.
De la Torre: When we started out, I always thought El Clasificado would stop existing around 2005. I was wrong.
Q: Have you found that your readers are migrating online?
De la Torre: Digital is attractive to a lot of Latinos who have a little more education and income and are outside of densely Hispanic markets.
Digital allows us to find additional niches, like the insurance company or lawyer who will advertise online. The problem is that our print reps are not interested in selling digital ads because they can still sell print and it’s more lucrative. An average digital sale might be $100 a week, where a print account will average $500 to $1,000 a week. Online is also harder to explain to our clients, who are very focused on print and not as advanced technologically.
Badame: A lot of our clients don’t believe that our readers are online. But our online traffic results for El Clasificado are showing that we have 6 million page views a month, from 400,000 unique visitors, with 20 percent of them coming through mobile devices.
De la Torre: I was at one of our biggest clients a year ago and they said, “Our customers are not online.” But I started doing keyword searches and I showed them that they are getting online now. So we gave them a free online classified so they could try it out. We’re putting all our efforts forward. We operate from fear and always look to the future, continually trying to recognize where our weaknesses could be.
Q: Both of you have financial backgrounds. How did you become entrepreneurs?
De la Torre: We were both CPAs, we met at Arthur Young & Co. in 1983 and started dating in 1985. I specialized in banking and the oil and gas industry and then I started getting requests to do due diligence on Hispanic media companies. I was alarmed at how much money was being spent on these companies that weren’t very impressive.
So I started thinking about doing something like the PennySaver [a free weekly classified publication] but for Latinos. I made a business plan but I didn’t want to be an entrepreneur. I hoped someone would come along to run the thing so I could do what I do best, which was be a financial person.
But we started the company in 1988 after Joe raised money from our friends and family. We got married in 1991. Joe kept his day job to keep us afloat for all the years we didn’t take salaries. He joined us full-time in 2000.
Badame: We hit bottom in 1992 due to the recession, and ever since we’ve grown every year from 8 percent to 35 percent. Even during this last recession, we were growing by 16 to 17 percent.
Q: What changes did you make?
De la Torre: One major thing is that we changed our distribution model. My business plan was based on a bulk-mail, home-delivery model. We stuck to that for three or four years -- until we almost went bankrupt.
Q: Why did you stay with something that wasn’t working?
De la Torre: It took us a long time to finally get it. It was the early ‘90s, we were in recession and it seemed like nothing worked. It was hard to figure out what was going wrong.
My mother and father were distributing our magazines in local Hispanic stores. So we tried putting distribution racks in about 150 small business locations, and we finally realized we were getting better results that way because Latino shoppers go to the market every day for fresh food. Today we have close to 22,000 locations where we drop 15 to 400 magazines each.
Badame: We started dropping magazines at a location and then we’d sit in our car and watch what happened for a couple of hours. We realized that with home delivery, we were giving the magazine to people who might not want it. They might just throw it away. When it’s sitting in a rack, only the people who want to read it actually pick it up.
Q: What’s next for EC Hispanic Media?
De la Torre: For 2011, we’re going to do more geographical expansion and focus on more training and hiring. We’re also adding some new products and hope to have new online revenue to add to the 5 percent we’re currently getting from online.
Badame: We have a short-term goal to ramp up revenues to $50 million within five years and a long-term plan to hit $100 million in the next 10 years. We can get to $50 million by 2016 if we maintain our historical [average annual] growth rate of 20.8 percent. The more experience we have, the smaller the numbers seem to look to us. Those numbers would have been huge, and unobtainable, to us years ago.
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