Media economy
Harsh times for Spanish-language TV
By Kevin Downey
Mar 2, 2009 - 8:47:07 AM

The ad recession could not have come at a worse time for Spanish-language networks like Univision and Telemundo.

Ad spending had begun to stagnate even before the worst of the economic crisis hit last fall. Now, the recession is making a bad situation worse. Media buyers expect ad spending in this summer’s upfront to be down from 2008, when advertisers spent roughly $1.6 billion.

In the first three quarters of 2008, spending was just better than flat to the year-earlier period, according to TNS Media Intelligence. In the past, Spanish-language TV regularly posted double-digit increases.

Media buyers says it’s early to make predictions but that current conditions suggest this year’s upfront isn’t likely to be a good one for Spanish-language networks.

"This is due to a combination of factors," says Leticia Juarez, vice president of media and promotions at Castells & Asociados in Los Angeles. "We have been in a recession for some time. In Spanish-language media, we don’t see the increase in ratings that we used to that would have a significant impact on budgets. And budgets, in general, are coming down."

Prices are also coming down because ad demand is weak.

Moreover, ratings are slightly up, which pumps more inventory into the market. That further shifts the supply-demand equation in favor of buyers, who can take their time negotiating favorable deals.

Key ad categories such as automotive are slashing budgets. And some advertisers that consider Spanish-language TV to be a secondary medium are cutting it out of their budgets.

All this leaves media buyers little reason to jump into upfront negotiations. Prices are good right now and may continue trending down. Moreover, many advertisers don’t want to rush into making huge financial commitments.

Buyers say virtually every advertiser is focusing on getting the biggest bang for every dollar, meaning media buys are being scrutinized.

Unless the economy makes a sudden change, it’s likely upfront negotiations will unfold in an orderly fashion over the next several months.

But there are some bright spots in Spanish-language TV that will keep upfront spending from tumbling.

The Hispanic population is continuing to grow. And some research studies have shown that Hispanics pay more attention to commercials than non-Hispanics.

"Given that the Hispanic population is exploding, and we’re going into a year when census information is coming out, we’re talking to advertisers about this being the year when they don’t decrease and hopefully increase their spending," says Jacqueline Hernandez, chief operating officer at Telemundo. "I think there’s potential for that, but it’s going to have to be based on results because every dollar is coveted."

Several ad categories are bumping up spending, including fast-food restaurants and pharmaceuticals.

And ratings are decent. Univision has a 1.5 rating among adults 18-49 this season through Feb. 22, flat to last season. Its audience is up 12 percent, to 3.9 million viewers.

Telemundo has a 0.5, up from a 0.4 rating, and its audience is up 11 percent, to just under 1.2 million viewers.

There are also advertisers buying Spanish-language TV for the first time, although the number of newcomers is slowing down. Each year, there are fewer advertisers that have never advertised on Spanish-language TV.

This maturing of the Spanish-language TV market is largely behind the slowdown in ad spending in 2008, including last year’s upfront.

"It wasn’t a horrible year," says Juarez. "But, typically, we see the Spanish-language upfront showing significant growth. Last year, there wasn’t the growth that was expected."