Research
Expect higher pricing for Hispanic TV
By Kevin Downey
Apr 3, 2007, 10:46

So much attention heading into the upfront market has been devoted to the expected impact of Nielsen’s new media measuring tools on negotiations.

Far less talked is about what to expect when the Hispanic networks come to market.

What buyers can expect is higher prices in the $1.6 billion Spanish-language upfront this spring.

Prices are expected to rise because of new Nielsen data that for the first time puts the Spanish- and English-language networks on equal footing, and that will give the Hispanic networks the leverage to ask for prices comparable to those paid to the English-language networks.

In the past, the Spanish-language networks received perhaps 70 percent of the price paid for comparable audience delivery on English-language networks. That gap has been gradually closing but remains for some networks.

“This transition is really a positive evolution for the entire industry because it recognizes the growing impact of Hispanic viewers and the importance of the Hispanic-targeted networks in the overall television landscape,” says Adrienne Stephenson, media supervisor at Tapestry, Starcom MediaVest Group’s multicultural division.

In September, Nielsen will finalize its dismantling of its Nielsen Hispanic Television Index, which since 1992 has measured the Hispanic networks separately from the English-language networks, in favor of an all-inclusive system that allows buyers to compare all networks side by side.

Among other things, it will give Hispanic networks greater exposure, notes Bob Turner, president of network sales at Azteca America.

“More clients will be using this [data] because some did not have access to NHTI,” he says. “Now that we’re included in the general survey, they all have access to it, and because of that more advertisers will be using it.”

Rosa Serrano, senior vice president and group account director of multicultural at Initiative, agrees.

“Those accounts that have not yet advertised to the Hispanic market will find a more compelling reason to invest when they see the audience, on an apples-to-apples comparison, is very strong,” she says. “This is bigger than when NHTI first launched.”

Spanish-language networks have long been pushing for the new measurement in part because it will put a spotlight on the discrepancy in prices paid to reach Spanish- and English-speaking viewers.

Media buyers say the audience delivery used in calculating cost-per-thousands isn’t much different between NHTI and Nielsen’s national people meter study, meaning the transition should be relatively smooth.

“The effect will take place in preparing for the upfront,” says Isabella Sanchez, chair of the media committee at the Association of Hispanic Advertising Agencies. “There are differences between NHTI and NTI in terms of how many individuals are reported to be viewing programs. The differences are not significant but they are not the same.”

Meanwhile, prices are also expected to increase with Univision’s new owners aggressively working to pay off the $13.7 billion price tag paid last year for the multimedia giant, including $1.4 billion in debt.

Media mogul Haim Saban and a group of investors last week won final approval to acquire the company. The new owners aren’t expected to change programming right away, instead sticking with shows Univision receives under a long-term deal with Mexican production company Televisa.

Despite the changes taking place in the Hispanic market, media buyers say this year’s upfront won’t be much different from prior ad-selling seasons. It’s also expected to be quite healthy.

Merrill Lynch analyst Jessica Reif Cohen last week projected the Hispanic networks will see an 8 percent bump in spending, to $1.56 billion, compared to a 3 percent increase for English-language networks, which are expected to pull in $8.69 billion.

Tapestry’s Stephenson says Cohen’s forecast sounds about right.

“We have a lot of advertisers that are now recognizing the importance of these viewers, so advertisers are dedicating a little bit more of their budgets to Hispanic,” she says. “And Univision has a couple of large soccer tournaments this year and sometimes advertisers come into the upfront for those properties.”

The other major changes that will affect the media buying process are commerical minutes--ratings based on ads rather than the shows they air in--and the introduction of delayed viewing data, reflecting the viewing of shows by VCR. But those two changes are not expected to take full effect until next year's upfront.