Telemundo Gets Its Share
Though lagging Univision in ratings, No. 2 net grabs 35% of market's ad dollars
By Kevin Downey -- Broadcasting & Cable, 9/7/2003 8:00:00 PM
A quick glance at ratings for Telemundo, the No. 2 ranked Spanish-language network behind Univision, and it's easy to think its problems have gone from bad to worse since it was acquired by NBC in April 2002.
Telemundo's share of the Spanish-language audience dipped from 21% in prime time last year to 18% in the past 12 months, according to data from Nielsen Media Research. At the same time, the combined share for Univision and its younger-skewing TeleFutura went from 79% to 82% (Univision's share went from 72% to 71%).
Yet Telemundo is doing far better when it comes to securing advertising dollars.
Telemundo had a disproportionate 35% share of the $1.35 billion spent by advertisers on the Spanish-language networks in the first half of this year. That is up from 34% in the same time period last year, even though TNS Media Intelligence/CMR begin including figures for TeleFutura this year.
Telemundo has for some time been doing a better job of getting advertising support than it has strong ratings. More recently, with NBC's help, Telemundo has been able to strengthen its position by bringing in new advertisers, including 17 first-time advertisers in this year's upfront.
"We worked on plans on how to integrate our companies and how to make one-plus-one equal three," says Steve Mandala, executive vice president of sales at Telemundo. "Our sales organization is quite literally a part of NBC's overall sales organization."
The benefit of that is that NBC can open doors previously closed to Telemundo.
"[NBC] gives this niche network the tools it needs to better market itself," says Bishop Cheen, director of fixed income at Wachovia Securities. "To begin with, that's a Rolodex. Many of the ad budgets for corporate imaging and marketing are controlled by the same big brand-name companies and agencies that NBC markets to."
The potential is great for Telemundo and other Spanish-language networks to get more of those ad dollars. For one thing, Hispanics are the fastest-growing and largest minority in the country.
For another thing, a huge number of advertisers have yet to buy time on the Spanish-language networks, according to David Joyce, a media analyst with Guzman & Co. "NBC probably has about all of the top 300 advertisers," he says. "Right now, there are only about 140 of them that advertise in Spanish-language media outlets."
Telemundo is starting to make progress with some of those advertisers. While its partnership with NBC has something to do with that, media buyers attribute Telemundo's disproportionate share of ad dollars mostly to the network itself.
There are a few reasons for that.
The first is that media buyers have for years been funneling more money to Telemundo than its ratings warrant. The idea is to prevent Univision from monopolizing the market.
Telemundo also has been shrewd in touting advantages it has over Univision, including having some programs that skew younger and more male than Univision's shows.
"For certain advertisers, that was an attraction even though their total audience was much lower," says Meg Bernot-Rodriguez, senior vice president and managing partner at the Bravo Group.
Telemundo also has successfully courted advertisers that Univision tends to avoid.
"Telemundo accepts advertising in Spanish for cable TV, satellite TV and dotcoms," says Liz Castells-Heard, president and chief executive officer of Castells & Asociados Advertising. "That's huge because those categories are exploding."
But while Telemundo has been able to grow its share of ad dollars on its own, media buyers generally think NBC will help it get an even bigger piece of the pie. One way NBC can do that is by using its financial resources to develop programs that bring in bigger audiences.
Telemundo has already shifted its focus away from primarily acquiring programs from other countries to producing original shows in this country.
That raises a red flag because of Telemundo's failed attempt in the late 1990s, when it was owned by Sony, to create Spanish-language versions of English-language shows like Starsky & Hutch. Ratings for the network took a nose dive at that time.
But media buyers think NBC and Telemundo have a better handle on developing programs for the Hispanic audience.
Two new shows premiering today are generating some interest. La Cenicienta is a Spanish-language knock-off of ABC's The Bachelorette, and Amor Descarado is a humorous novella about a guy who assumes the identity of another guy. "NBC has provided them with other good programming that has done okay with the Hispanic market, like Fear Factor," says Sofia Escamilla, media director at La Agencia de Orci. "The fact is that NBC is providing programming that advertisers who don't typically do Hispanic advertising understand."
Moreover, while media buyers and analysts are uncertain about the appeal of the Olympics to Hispanics, in 2004, Telemundo will become the first Spanish-language network to air the event.
In addition to getting new programs, Telemundo can count on NBC to widely promote those shows. As it did with Queer Eye for the Straight Guy, the hit makeover show on the NBC-owned Bravo, NBC has aired spots for La Cenicienta and Amor Descarado. (And for the first time ever, Telemundo is using one closed-captioned channel to caption the show in English. Another closed-captioned channel already is used for the hearing-impaired Spanish audience.)
Whether all of this will translate into a bigger audience share for Telemundo is hard to predict. But media analysts say the network's increasing focus on programs created for Hispanics living here, particularly Mexican-Americans, is a good move.
"Do I think Telemundo will close the gap with Univision anytime soon? No, it's a huge gap," says Cheen. "Do I think it will be No. 2 for many moons? Yes, and it can be a very profitable No. 2 and certainly more than when it was on its own."
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