KLAX-FM Spanish station stuns radio industry with No. 1 rating.

When the latest Arbitron radio ratings came out on Jan. 5, Spanish language station KLAX-FM -- at 97.9 on the dial -- was Los Angeles' top-rated station for the fall season. This news shocked some in radio broadcasting and others said it must be a fluke.

Talk show host Howard Stern, who continues to have the top-rated show on rival FM outlet KLSX, said on the air that Arbitron fouled up and made a mistake on KLAX's 5.3 percent rating.

Arbitron's figures show the Los Angeles listening audience is 1,692,500 and KLAX captured 5.3 percent. That translates to 89,500 listeners during unbroken 15 minute segments between Sept. 24 and Dec. 16.

Hispanic media and advertising executives knew it was no mistake or fluke. With Los Angeles' population now one-third Latino, it was inevitable for a Spanish language station to vault to the top, they say.

With its top ranking, KLAX is the first Spanish-language station in Los Angeles to be in a position to raise its advertising rates to levels of Anglo stations.

As ratings improve, stations generally hike rates to reflect the station's growing popularity -- and the size of the audience being reached.

Historically, Hispanic radio stations' advertising rates have been a third less than Anglo stations in this market, according to Anita Santiago, owner of an advertising agency specializing in Hispanic advertising.

The most successful Hispanic stations, KTNQ-AM and KLVE-FM, are jointly owned and offer advertisers a combined rate of $460 for a 60 second spot. The combined rate of KLAX and its AM sister, KXED, has been $350 but is likely to go up. The top English-speaking stations command around $700 for a spot.

The lower advertising rates have limited Spanish stations' revenues and profits. KLVE-FM and KTNQ-AM have been the largest revenue producers of the Hispanic stations here and their combined annual volumes are around $20 million, according to Hispanic radio executives. Those stations rank 11th and 14th respectively in the latest Arbitron ratings.

Jack McVeigh, general sales manager of KLAX, said the station's rates will now be competitive. "Advertisers who have never looked at us are now inquiring," he said. "They realize they are not fully reaching the Los Angeles market if they are not using Hispanic radio. New advertisers have come aboard especially since August."

Advertising executives said KLAX's popularity has risen dramatically since August when the station changed its format to ranchera, a form of country music now popular in Mexico. Ranchera was an untapped niche in Los Angeles and KLAX pursed it aggressively with new, young on-air personalities.

In the past, the station has tried to capture all Latinos here with a broad musical spectrum. However, ranchera appeals to Mexican emigres who comprise 80 percent of the county's Latino population.

The increased listenership is translating into increased advertising. January will be the best month in the station's history with close to a 100 percent sellout of its air time, McVeigh said. Last December and November were its previous record months with 70 percent sellouts.

The station and KXED have been losing money in Los Angeles for many years but now are at break-even. Technical problems have plagued the stations which are part of New York-based Spanish Broadcasting System, but those problems have been solved, McVeigh said.

Many credit the station's dramatic turn-around to Alfredo Rodriguez, who came in August as general manager and started playing ranchera. He hired a new lineup of young, less boisterous, more casual on-air personalities.

The station has been able to climb from 21st place in the Arbitron rating to first in just three months. No Spanish-language station has ever topped the ratings although several have been in the top 10 in the last five years.

Advertisers have been seeking to reach the growing Hispanic population and major firms such as Anheuser-Busch, Inc. McDonald's Corp., Philip Morris Cos., Procter & Gamble Co. and General Mills Inc. have been top spenders. However, automakers, especially Japanese car manufacturers, have been reluctant to use the medium, advertising executives say. Chevrolet has been supportive of the Hispanic radio.

Advertising executives add that during a soft economy many companies cut back their Hispanic advertising, preferring to reach Hispanics through the Anglo media. There is an assumption that many Hispanics working in Los Angeles are bilingual and also tune in to English-speaking stations.

KLAX's Arbitron ratings may force advertisers to consider KLAX a mass market vehicle, given the 3 million Latinos in the county, says advertising executives.

Despite Howard Stern's doubts, Arbitron is not considering taking a second look at its L.A. ratings. A spokesman said, "I don't care what Mr. Stern said. We are fully confident in our fall L.A. book and will not reissue it."