News Analysis: Telemundo-Yahoo! deal

The number of Spanish-dominant Hispanics accessing the Internet has increased by 40% during the last twelve months. “1.3 million new Hispanics came online. Of those 1.1 million were Spanish-dominant”, Lee Vann, founder and president of San Diego, CA, based Captura Group tells Portada®. The joint venture between Telemundo and Yahoo! en español (http://telemundo.yahoo.com) is an attempt to shake up the Hispanic online market and increase online advertising inventory targeting Spanish-dominant Hispanics. These are the factors that are shaping the development of the Hispanic Internet:

  • Small but growing market

Currently, only 25% of Hispanic Internet users are Spanish-dominant, (see box below). However, this is the segment of the Hispanic Internet user population which is growing the most. “This subsegment is growing at an annual rate of approximately 40% per year”, says Captura's Lee Vann. One of the reasons for this increase is that Internet services providers have been sharply lowering the prices they charge for Internet access. The Spanish dominant segment of the market has clearly been dominated by Univision.com. The joint venture between Yahoo! and Telemundo brings together a strong entity to compete with Univision.com. Yahoo!-Telemundo will run neck and neck with Univision to attract “eyeballs” and the advertising dollars that target them. Approximately US $100 million worth of online advertising will be bought this year in Spanish-language websites.

  • Major partnerships

Yahoo! en español will provide technical and Internet marketing knowledge to the new venture, while Telemundo will provide its TV audience and cross platform advertising opportunities. Interestingly, Univision.com recently partnered with Google, meaning that the two largest general market Internet properties are now partnering with the two largest Hispanic TV broadcasters.

  • More advertisers coming into the market….

An increasing number of advertisers, particularly large companies with branding campaigns, are buying advertising in Spanish-language websites. However, according to Captura Group's Lee Vann, for the market to grow more, medium sized companies need to come into the market. “Middle tier companies will be looking at the return on investment of their online advertising campaigns”, Vann notes.

…CPMs are high...

The problem is that currently CPM's (Costs per thousand impressions) are rather high. In the last year CPMs at large Spanish-language websites have increased by more than 100%. It is difficult for many middle tiered companies to achieve a positive return via online advertising. CPM's in large Spanish-language websites (e.g. Univision.com) lie at around US $10, and for more targeted ads (e.g. a banner in the autochannel) they can go up to US $20.

…but an increasing supply of online advertising inventory may drive them down.

There is a big opportunity for publishers, e.g. Terra.com or Batanga.com but also Hispanic newspaper publishers (represented by advertising sales networks like Hispanic Digital Network) to provide more Spanish-language content and to increase the amount of online advertising inventory targeting Spanish-dominant Hispanics.

A heterogeneous market

Market Segment

Total/Share of Hispanics online

Websites they mostly visit

Number of Hispanics that are online

Approx. 16 million

NA

Spanish-dominant

25% of total (growing at an annual rate of 40%)

- Univision.com

- Telemundo.yahoo.com
- Batanga.com
- Starmedia.com

- Terra.com,
-Spanish-language magazines and newspapers, - Major Latin American newspapers and magazines
- AOL Latino
- MSNLatino

Bilingual

25% of total (growing)

-Websites under “Spanish dominant” plus bilingual websites

English-dominant

50% (reaching point of saturation)

- Yahoo.com, MSN.com, google.com (general market online media properties)

Source: Captura Group and Portada®


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Editorial Staff

Portada Staff

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