Novelas Remain Best Bet to Reach Hispanic Viewers

Among growing opportunities, media buyers want more content online
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The fact that all media consumption by Hispanic audiences continues
to be very different from English-language viewers presents its challenges. But
an equally glaring fact is that marketers who have not yet jumped deeply into
Spanish-language advertising are missing considerable sales revenue
potential from the approximate $1 trillion in annual spending by this
audience segment.

Those marketers that have moved into the Hispanic ad
marketplace have done so steadily over the past decade; although the numbers were
slowed by the economic downturn, they continue to grow. On the Hispanic media
side, new opportunities to reach Spanish-speaking audiences are being offered
digitally, though not as rapidly as on the English-language side.

That should change, however, as data shows that
Spanish-language consumers are heavier adopters of new technology. The audience
presents a great potential target for digital platforms.

Still, several billion dollars a year are being spent on
Spanish-language television alone, and new advertisers and brands are
continuing to join the marketplace on a regular basis.

"Television is still the place where you get the most
eyeballs, the most impressions of Hispanics," says Al Cruz, partner and
communications planning director at MediaCom. "According to Nielsen data,
Hispanics make up 18.9% of the total 18-49 TV audience and Hispanics 18-34 make
up 22% of that demo's total audience."

Cruz says unlike in the general market, where newspapers and
magazines are struggling to keep readers, "print media for Hispanics is not
falling apart as rapidly. The South in particular is a hotbed for Hispanic
population growth and they turn first to newspapers to get their information."

Caleb Windover, senior VP and managing
director at MediaVest 42 Degrees, says, "the decision most of
our clients are making today is no longer should they invest in Hispanic media
but what is the best way to make the investment."

Christine Fuller, managing director, media investments
at MediaCom, agrees that "marketers are looking at their overall media
plans and determining the right level of investment in Hispanic media and how
that will impact their business models, and most of their investments are
growing across most categories." She adds, however, that for some clients, "once
their overall media plan is done, Hispanic is just a small line-item that's
added at the end. I hope that changes."

With the branded content and integrations opportunities
being offered by Univision and Telemundo, and the fact that on any given night,
Univision is beating one or more of the Big Four English-language broadcast
networks in the 18-49 demo, marketers should be moving ad dollars there. The
new Spanish-language network MundoFox will undoubtedly offer impact
opportunities as well.

Lia Silkworth, senior VP, media director at Starcom's
multicultural agency Tapestry, says Univision and Telemundo each offer
advertisers important reach opportunities. "Telemundo offers custom content in
their novelas while Univision is offering mass reach opportunities with their
novelas."

Telemundo has been producing most of its own novelas for
several years and has increased opportunities for integrations. Univision has
been a bit more restrictive there: most of its novelas are repeats of those run
in Mexico that were produced by Televisa. However, Univision has also been
producing some of its own novelas and is offering integration opportunities
when it does.

Windover says the Hispanic networks "have been more open to
becoming true marketing partners," adding that they will sit down with clients
to find ways to create programming where brands can be integrated and work best
as sponsors. He cites Univision Communication's second broadcast network,
TeleFutura, as an example.

"About three years ago, we worked with TeleFutura to create
a boxing show that would be sponsored by one of our clients, the Mexican beer, Tecate,"
Windover says. "We went to them with our goals for our client. At the time they
did not have a regular boxing show on the network, so we created one called Solo Boxeo Tecate which has our client's
name in the title. It has worked out well for us. If clients realize what they
are looking to accomplish in the Hispanic marketplace, the networks continue to
be open to help find solutions beyond commercials."

Jackie Hernandez, chief operating officer at Telemundo,
agrees with that assessment. She says Telemundo has not only created lots of
integration opportunities within its novelas, but it has also created specific
websites, community events and webisodes for marketers to specifically target
female viewers.

In July, Telemundo and iVillage, both part of NBCUniversal,
formed a partnership in creating a new website to target the underserved online
Latina market. The site is called Mujer de Hoy and targets 16 million Latinas
who the network says are online regularly. Mujer de Hoy offers all types of
content geared toward Hispanic women, but particularly family, fashion and
food, and is a platform for advertisers to reach them with assorted
products.

Telemundo a year ago also partnered with L'Oreal USA to
launch Club De Noveleras, the network's official novela fan club, where
Hispanic viewers can join an online community to interact with the network's
novela stars and with each other. The site also sponsors live events for
viewers where they can meet novela stars in person. Assorted L'Oreal products
sponsor the site and events.

And in May, Telemundo also created Mia Mundo, an online series of 13 three-minute webisodes that aired
on Telemundo cable network mun2 as well. The series was unique in that the
concept grew out of the Beyond Demographics Latino Identity Study, conducted by
Telemundo in partnership with Starcom MediaVest Group. The series, its storylines
and characters were based on actual behavior and product usage habits of
Latinas. Initial sponsors were Chevrolet and Verizon, whose brands were both
integrated into the storylines.

"We continue to use our research to help create custom
content and programming for clients," Hernandez says. "Our ability to reach
Hispanic women has been a real key to our advertising success." In this most
recent upfront, she signed up over a dozen new advertisers, with many of them
looking to target women.

PLAYING CATCH-UP

The Hispanic TV networks have lagged a little behind the
general market networks in the volume of online video content offered, but that
has been changing.

Both Univision and Telemundo will be offering more online
content this season, although again, since Telemundo produces its own novelas
and owns the content, it can put that video online with less complication.

"Telemundo is continuing to increase its novela production
and is going to be putting its TV novelas online the next day this season," MediaCom's
Fuller says. "Telemundo is also going to be streaming live soccer matches this
season. And they are going to be doing more reality shows with brand opportunities.
We're doing more with Telemundo this season with integrations."

Fuller says with Univision, since it does not own most of
its novelas, there have been more integrations in its reality shows and also in
its major events. "We have done more integrations within their tent-pole events
and major live telecasts and across multiple platforms," Fuller says.

"Hispanics over-index as online users, but there needs to be
more content directed to them," puts in MediaVest's Windover. "The more online
content the networks put up, the more money we will begin adding into online." Adds
Fuller, "As more content becomes available, you will see budgets grow."

Tapestry's Silkworth says, "The Hispanic consumers are
online. There is not yet enough content and inventory out there for advertisers
to be able to do any type of audience targeting online. We are looking to
partner with the networks and increase the amount of content. We have to come
up with models that will work for both the networks and advertisers."

Toward that end, Joe Zubi, president and CEO of
Zubi Advertising, says the networks and online sites targeting Spanish-language
audiences need to provide more information about viewers. "We need more data
about the online usage habits of Hispanics," Zubi says. "Right now there is no
clear-cut usage data. The Spanish-language networks also need to do a better
job driving their TV viewers online and to their social media platforms."

Whether it is integrations or traditional commercials,
novelas are still the major place to reach mass audiences on the
Spanish-language networks.

"Spanish-language audiences continue to be hotwired to
novelas," MediaCom's Cruz says. On Friday nights, the Univision novelas have
steadily outdrawn the English-language viewers in the 18-34 demo for several
years and that has extended to other nights among both 18-34 and 18-49 demo viewers.

Zubi says unlike on the English-language broadcast networks,
where it's harder to reach younger viewers through most primetime programming,
primetime novelas attract many younger people.

"Novelas draw [a larger] 12-24 audience than the
English-language primetime shows do because younger Hispanics grew up in homes
where novelas were a staple and they continue to watch as a family," Zubi says.

FOX JOINS THE FRAY

What impact will the new Spanish-language broadcast network
MundoFox, the partnership between Rupert Murdoch's News Corp. and Colombian TV
company RCN, have on the advertisers?

Agency executives and their advertiser clients are
optimistic about the impact of MundoFox on the marketplace, believing that
reaching bilingual Hispanics with programming other than the traditional
novelas will give them a bit of a broader reach. And having the financial
backing of two major media companies helps the perception that MundoFox is
poised to succeed.

"It's a great concept to reach out to bilingual Hispanics," Fuller
says. "While Hispanics are very loyal to the programs and networks they watch,
there are opportunities there. We are watching it closely to see how it works."

"We have several clients who bought time on the new network,"
says Windover.  "We did our own ratings
projections and were conservative with our estimates and with our initial
spending. MundoFox has the potential to do well."

Cruz also finds some optimism in RCN's place in the
equation. "RCN produces shows in Colombia in Spanish that are similar to the
comedies and dramas that are produced to the general market audiences in the
U.S.," he says. "It will be interesting to see if the bilingual Hispanic
audiences tune in. But we've invested in MundoFox for our clients, much like we
do in all the Spanish-language networks beyond Univision and Telemundo like Azteca,
Estrella, ESPN Deportes, Fox Deportes and Discovery en Español,
among others."

Silkwood is even more bullish on MundoFox. "It will
eventually be a major player in the marketplace. We are definitely supporting
them and our clients have invested in the network."

And Zubi says, "Anytime a new network comes on board, we
take a serious look at it. We want to get in there with our clients and have an
early presence, to be charter partners."

While the agencies believe that reaching out to bilingual
Hispanics with programming with similar sensibilities to English-language TV
shows is a potentially smart move, they are not as keen on using
English-language TV to try to reach Hispanic viewers.

"Among the highest-rated general market primetime shows,
only small percentages of their audiences are Hispanic," says
Cruz. "So, reaching Hispanics through Spanish-language television is still the
best way to do it."

Fuller agrees. "The most watched general market shows by
Hispanics are The Voice, American Idol, Dancing With the Stars and America's
Got Talent
. And only 11% of The Voice's audience is Hispanic."

Advertisers wanting to reach more Hispanics are notably choosing
to sponsor Spanish-language versions of the English-language reality show hits.

Last week, Univision announced that Nescafe Clasico, Target,
Honda, State Farm and Verizon have signed up for brand integrations for the new
season of Mira Quien Baila 3 (Look Who's
Dancing)
, the network's version of Dancing with the Stars.

And while Fox airs half a season of NASCAR on its broadcast
network, NASCAR recently announced that it has entered into a separate deal
with Fox Deportes to televise 15 races on the Spanish-language sports network
next year, including the Daytona 500.

The most recent upfront saw increased spending in several
categories on Hispanic television, according to the media buyers. Among the
most active categories was automotive, where most of the major automakers, both
U.S. and foreign, increased spending. Other strong categories were fast food
restaurants, retail, soft drinks, packaged goods and health & beauty. Much
like on the English-language networks, the discussed but then abandoned merger
of AT&T and T-Mobile had led to some soft spending in the wireless
category, but that has picked up again. "The telco competition for 4G LTE is
expanding, and more money is going to be spent by all the companies promoting
that," Cruz says.

Overall, ad spending is up, but there are still national
advertisers strategizing about jumping into Spanish-language television.

"So much money is wasted in many [general market] marketing
plans and sometimes money even goes unspent," Cruz says. "It doesn't take much
money to run a test campaign in one market to see what it generates in sales."

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