Coming into its own
Buoyed by census data, Spanish-language TV sees double-digit growth
By Steve McClellan -- Broadcasting & Cable, 5/13/2001 8:00:00 PM
The Spanish-language TV ad market is going to grow this year by some double-digit figure. Whether it's the 10% to 15% that the buyers believe it will be or the 25% that the sellers think they can get remains to be seen.
Last year's Spanish-language upfront market totaled $700 million or so, media executives say, with the total market (including scatter and local TV) exceeding $1.1 billion. This year, executives at the Spanish-language networks are more juiced than usual going into the upfront season, armed with new U.S. Census data showing huge growth in the Hispanic population.
According to that data, the Hispanic population grew 58% from 1990 to 2000, when it totaled 35.3 million people. That's likely to climb to 38 million during the 2001-02 television season, says Tom McGarrity, co-president of network sales at Univision.
According to Doug Darfield, senior vice president of Hispanic services at Nielsen Media Research, that translates to roughly a 1.5 million boost in the estimated Hispanic TV household universe, to close to 10.5 million homes, in 2002.
But don't expect advertisers to pay whopping price increases just because the Hispanic population is growing rapidly, cautions Ann Perrine, broadcast buying director at San Antonio-based Bromley Communications, one of the largest buyers of Spanish-language media.
"We know the general market is in the doldrums, and Hispanic has kind of felt like they're bulletproof with the new census data," she says. "But what they're ignoring or just don't want to hear is that, when general-market budgets get cut, usually it's across the board so we're impacted, as well."
Perrine is right: The Spanish-language TV execs don't want to hear that.
"I've made quite a point about this with our ad sales force," says Telemundo President James McNamara. "If the advertisers are talking about a bad patch, go talk to ABC, CBS, NBC and Fox. As it relates to Hispanic, we've got way too many factors in our favor."
The census story is not just about growth, McNamara says. It also demonstrates that Hispanic TV advertisers "probably, over the last five years, have been getting a free ride for at least 10%" because the Hispanic audience was undercounted by that much.
He also argues that the prices advertisers pay the Hispanic media are "way under what they should be paying, because, at any given time, between 5% and 6% of the population is tuned to Univision or Telemundo, according to Nielsen. Yet we only get a little under 2% of the ad spend." He also argues that the Hispanic audience is more apt to be influenced by advertising because many viewers are new to the country and don't have established brand loyalties.
"So, for all those reasons, if anybody's going to take a hit this year, it should be coming out of [mainstream networks'] hide," McNamara says. He's looking for 25% ad-sales growth this year. If the economy hadn't weakened, he says, he'd be looking for twice that.
But Perrine says the Hispanic TV market may grow only as much as 15% this year, fueled mainly by new advertisers who are just now recognizing the importance of that marketplace.
That's clearly part of Univision's strategy, which has added 30 clients over the past two years, McGarrity says. He argues that advertisers can maximize their budget reach by spending 10% to 20% of it on Spanish-language TV.
Univision remains the giant in Spanish-language TV, commanding a 70 to 80 share of viewers. It also owns Galavisión, the Spanish-language cable network, which it frequently packages with Univision when selling ads.
And Univision is launching a second broadcasting network in January to be distributed over the USA Broadcasting stations, which it agreed to acquire for $1.1 billion last December. Just last week, the deal cleared the Federal Trade Commission's antitrust hurdles, although it still has to be approved by the FCC.
Telemundo is still No. 2 in a two-network race but making steady strides against Univision. Last year, it sold $175 million in advertising in the upfront market, double the year before. It, too, owns a cable network, Gems.
But other players are emerging, as well. Azteca America, the venture of Pappas Telecasting and Mexico City-based TV Azteca, says it will launch in June in about 42% of the Spanish-language household universe. That won't be enough coverage to make much of a dent in the marketplace, although Azteca sales chief Peter Chrisanthopoulos says he already has some deals lined up. Nielsen will define Azteca America as an "emerging network" and list its ratings separately from Univision's and Telemundo's until its household coverage reaches 70%.
Fort Worth, Texas-based Hispanic Television Network says it covers about a third of Hispanic households and is designed specifically to serve the Mexican-American audience. For now, Nielsen does not measure its ratings.
As a buyer, Perrine likes the added competition. Over time, she says, "I do think it will impact the marketplace. Hispanics have been looking for more and more choices, and what it does is bring more advertisers back from the general market."
That's OK by Univision's McGarrity. "There's too much to this market in terms of growth potential to think we could sit with an 80-plus share of the market forever. This evolution is good. There will be more players talking to corporate America, and the increased investment will expand the market."
Even the general market has taken notice. CBS said a few weeks ago it will air The Bold and the Beautiful in Spanish on a second audio channel. And co-owned Nickelodeon has developed several shows with Hispanic lead characters that it hopes will attract ad dollars targeted to Hispanic media.
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