Hot Market + Hot Census = Hot Hispanic Upfront

For the first time, this year's Hispanic TV upfront ad market, still not quite closed, will reach close to $1 billion, a sign of strength in the market and a sign of growing interest in the Hispanic market. Estimates are that total spending will be up perhaps 15% vs. a year ago to approximately $980 million. Buyers say price increases are up on average in the 10%-12% range depending on the deal.

Who Buys Hispanic TV?
Top 10 advertisers, January-April
Rank Company Total
Source: Nielsen Monitor-Plus
1Procter & Gamble$60M
2Lexicon Marketing Corp.$38M
4U.S. Government$33M
5Sears Roebuck$32M
6World Vision$23M
7General Motors$19M

Univision's sales reportedly increased about 15% to about $720 million, with the Univision network accounting for about $615 million and Telefutura another $75 million. On the cable side, Univision's Galavision network was said to collect about $30 million.

Telemundo's upfront, sources say, will total about $250 million, up 11% from last year's take of $225 million.

Fledgling Spanish-language network Azteca America was in the upfront market for the first time, although, with just 60% coverage of Hispanic households, it apparently did just a few deals valued at no more than a couple of million dollars.

Univision and Telemundo executives would not go on the record last week to discuss this year's market, because they were still trying to wrap things up.

But going into the buying season two months ago, Univision Executive Vice President, Network Sales, Ron Furman was optimistic. He told Wall Street analysts then, "I would say that our average over the last few years has been somewhere in the mid teens per year, and we would expect that Univision will have that success once again in the 2003 upfront."

A few weeks ago, a senior executive at Telemundo parent NBC indicated that much of the Spanish-language net's advertising was sold in packages with other NBC networks. The executive estimated that Telemundo would be up approximately 10% in total sales for the upfront.

"Telemundo has a smaller base than Univision, and they also had a double-digit ratings fall off this past season," says an analyst following the company. "They should do okay with NBC packaging it, but they aren't going to gain any ground on Univision this year" in the upfront.

The strong Hispanic upfront reflects the overall health of that TV segment. Both Univision and Telemundo saw double-digit ad-sales growth in the first four months of 2003 (the latest figures available). According to Nielsen's Monitor-Plus ad-tracking service, for the January-April period, Univision ad sales were up almost 16% to $414 million, while co-owned Telefutura added $51 million to the Univision coffers. For the same period, Telemundo posted a 24% gain to $283 million.

Marketers of Spanish-language TV remind advertisers at every opportunity that they ignore the Hispanic population at the risk of lost market share for their products.

And buyers say the message is sinking in. Because it's true, says Rosa Serrano, senior vice president, multicultural, at Initiative Media in Los Angeles: "We're seeing clients who weren't in the market before get in because they see their competitors gaining market share."

Danielle Gonzales, director of investment, at Chicago based Tapestry, a unit of Starcom Mediavest Group, agrees. She believes that a significant piece of this year's volume increase—which she estimates at 12%-14% and worth between $950 million and $1 billion—is due to new advertisers' entering the Hispanic upfront.

"Budgets are relatively flat to slightly up on most clients that were in last year," she explains. "There are many new clients this year causing demand to rise. These are clients that were in scatter and are now committing to full-year upfront budgets and some who are just getting into the game."

Gonzales and others believe that U.S. Census data showing the Hispanic population growing at a clip three times faster than the overall U.S. population helped spark the boom.

Some analysts say the Hispanic networks believe it still may be most important to just get the advertisers in the door. "They will never tell you this, but they are probably willing to give a little on price to get somebody to commit to the upfront," says one source. "They figure, once they get them in the upfront, they've got them in Spanish-language TV forever."