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Hispanic nets starting to get buyers’ respect

May 6, 2002  •  Post A Comment

While upfront forecasters have made a rather sluggish assessment of the English-language broadcasting network business this season, America’s Hispanic broadcasters are primed for an adrenaline rush.
Some agency buyers and network sellers say they fully expect that when the Hispanic upfront kicks in during the middle of this month, the sector could enjoy revenue percentage growth in the low double digits compared with last year’s upfront. Meanwhile, Morgan Stanley analysts forecasted about a 4 percent gain for the six English-language broadcast networks. But Jack Myers LLC is projecting a 3.3 percent decline for ABC, CBS, NBC, Fox, UPN and The WB.
“We’ve had a mostly good track record of doing better than the general marketplace by about three to four times,” said Tom McGarrity, co-president of Univision Networks.
Erring on the side of caution is Laura Marella, VP of media services at Casanova Pendrill, a Hispanic advertising agency that is an affiliate of Universal McCann. “We’re looking at something within 5 percentage points of where the general market falls,” she said.
Ms. Marella and Mr. McGarrity said one of the forces shaping this year’s market are the results of the 2000 U.S. Census, which showed that the Hispanic population grew by 58 percent over the previous 10 years and represents 13 percent of the total U.S. population, or about 35 million people.
Those numbers were out in time for the upfront market last year, but most people didn’t have time to fully comprehend the dramatic growth they indicated or work them into their media-buying plans, said Ms. Marella and Mr. McGarrity.
This year’s marketplace will be influenced by other factors as well: Univision is now showing ratings supremacy not only over its Hispanic competitors but over English-language stations as well in a growing number of key markets. What’s more, the sheer number of Hispanic broadcasting competitors has risen, and that’s increasing their collective share of the overall audience.
Nowhere are the changes more evident than in Los Angeles. Telemundo Communications Group has added a second broadcast station in the market, KWHY-TV; Univision has launched a second national broadcast network, Telefutura, carried locally on KFTR-TV; and the upstart Azteca America Network now owns KAZA-TV. If L.A. consumers happen to subscribe to cable, they have another dozen Spanish-language channels to choose from, including the recently launched Mun2 from Telemundo and Univision’s long-established Galavision.
“I think that in the future, we’ll see that a lot of seeds were planted in 2002,” said Jim McNamara, president and CEO of Telemundo. “We have a few other channels in the planning stages.”
Those plans will undoubtedly be abetted by Telemundo’s new owner, NBC, whose purchase of the network closed on April 12.
Univision has also announced plans to develop five new channels. And Azteca is in acquisition mode, said Luis Echarte, president and CEO of the network, a joint venture between the Mexican broadcaster TV Azteca and Pappas Telecasting Cos. that launched in January.
“We have a strategy of getting a 20 [percent] to 25 percent share of the U.S. Hispanic advertising market in the next two to three years,” Mr. Echarte said. “Our goal this May and June is to make our presence felt and help advertisers understand what we bring to the market.”
Ms. Marella expects that the additional broadcasting outlets will soften the potential rise in cost-per-thousand rates for Hispanic broadcasters, because there will be more inventory to sell. But the addition of the one new national broadcast network, Telefutura, has increased the ratings share of Hispanic broadcasting as a whole. “Anywhere from 2 to 4 ratings points are coming over from English-language programming to Telefutura,” said Mr. McGarrity, who launched the new network Jan. 14. He expects that the World Cup soccer games, broadcasts of which will be split between Univision and Telefutura when they run in June, will give the new service an even higher profile within the advertising community.
Also contributing to the sense of Hispanic clout are Univision’s coups over English-language programmers in some dayparts, said Hector Orci, co-chairman of the L’Agencia de Orci ad agency in Los Angeles. “Its news is No. 1 not only in places where you might expect-like Los Angeles and Miami-but in New York, Dallas and Houston as well,” he said. During the February sweeps, Univision’s early evening local news outscored all competitors in the 18 to 34 demo in nine markets.
The adrenaline rush isn’t as intense as some would like it to be. The Association of Hispanic Advertising Agencies recently reported that advertisers doubled their budget allocation to Hispanic media between 1999 and 2001. But while that’s significant, there’s a huge disparity between the current level-3.1 percent of all advertising revenue-and the Hispanic population base, 13 percent.
Nevertheless, Ms. Marella sees reasons for optimism. She expects the number of advertisers buying Hispanic broadcast media to increase by 15 percent to 20 percent this upfront compared with last year.