TV: Elephant in the Room

It's the big enchilada of the Latin advertising market both in Latin America and the U.S.The elephant in the room. Even in the emerging multimedia world, TV amounts to almost 75% of the overall Latin Advertising markets in dollar volumes. Says Enrique Dussan, VP Director Communications Planning at Wing in Miami, “Television is a doorway to a home, it's a way into the Hispanic living rooms and their family life.” Television media targeting Hispanics and Latin Americans has come a long way. Jacquie Hernandez Fallous, COO of Telemundo tells Portada that there have been two striking changes over the last 10 years. High Definition TV, which Telemundo offers, as well as content specifically targeted to U.S. Hispanics, not just Spanish-language content but culturally relevant content.

As an example she cites “Mas sabe el Diablo”, a telenovela produced in NYC and exclusively produced to feel US Hispanic”. As Wing’s Dussan notes, “the Hispanic market is experiencing what the general market lived in the early eighties but with the difference that the Hispanic market is now a lot more sophisticated and technologically advanced so it is changing in gigantic steps.” Dussan buys media for companies including Goya and US Bank. He adds that “the old canard that only soap operas work is not longer true; Hispanics live in a multicultural universe where they have access to an array of programming appealing to various audiences. And it is working; they are watching and receiving these alternatives openly. These new alternatives provide also opportunities for advertisers to reach other segments very cost effectively.”
Still two Giants:

Univision and Telemundo still clearly dominate the market. According to Dussan, “Univision on one hand has worked to solidify is position in the market with a wining formula that has kept their leadership while they solidified solidified their overall negotiations incorporating all their companies under one roof to negotiate, Univision, Telefutura, Galavision and Univision.com offered a number of alternatives to cross promote in different platforms for a true 360 approach. On the other hand Telemundo has also proven its winning formula that has given them a strong second position. In addition, the weight of the General Electric group behind Telemundo has greatly contributed to solidify Telemundo as well as their cable channel Mun2. Both Telemundo and Univision have not only grown as companies but also attracted their Hispanic audiences and now they are competing head on with the general market networks for eyeballs and shares.”

While Univision and Telemundo still dominate, the market is definitely more fragmented than it was in the eighties and nineties due to the increase in offerings of both cable and satellite TV. Karen Habib, the recently appointed director of the Hispanic division of Eclipse Marketing Services, a Morristown, N.J.-based cable marketing company, says that “I have to acknowledge that cable has been moving aggressively in the right direction, both on the programming and pricing front. They are launching more networks, and their packages and pricing are becoming more competitive. Satellite and cable operators have a lot more on their plate. There is much more Hispanic content now than ever before. Now you have networks targeting the acculturated, bilingual market; operators have better bandwidth and offering VOD.”

As Luis Silberwasser, SVP and GM US Hispanic Networks at Discovery puts it, “I think the most significant development and change, both in U.S. Hispanic market and in Latin America, has been the emergence of cable and satellite television as a viable platform to provide more options for viewers and make television more attractive.

What we have seen in both marketplaces is that cable/satellite has not only opened up and expanded the variety of programming choices but also paved the way for richer higher quality channels in many different genres. As a result, we have seen audiences that were once exclusive to broadcast/freeto-air migrate to pay-tv channels. This trend will continue as there is still a lot of growth potential given that the penetration of cable and satellite has significant room to grow. Only in Colombia and Argentina it is higher than 50%, and in the US Hispanic market, Spanish-language tiers are only present in one third of Hispanic homes.”

New Entrants:

There have been many entrants among cable and satellite TV providers. One of these is DirectTV, the satellite TV giant which has 1.1 million subscribers in the U.S. Hispanic market (out of a total of 16 million). It also has an impressive subscriber base in Latin America, under which it includes the Puerto Rican market, where it has 6 million subscribing households (average household size is 4.5 persons). The only countries it is not present in Latin America are Bolivia and Paraguay.

A spokeswoman at DirecTV tells Portada that programming is one of the main differentiators, particularly sports programming. Both cable and satellite TV content providers have a revenue structure that skews towards subscriptions. Advertising often amounts to less than 10% of total revenue for cable and satellite companies.

A recent entrant in to the Latin TV sector is History en español, a division of A&E Television Networks (which is owned by ABC, Disney and Hearst). In the U.S. the History channel reaches 3.5 million Hispanic homes (out of a total of 97 million U.S. homes). Joel Celestin. VP Advertising Sales, History en Español at A&E Television Networks, tells Portada that the channel will be Nielsen rated in 2010. In 2009 he is also selling advertising, mostly in the Insurance, Automotive and Finance categories, into the general market History Channel Hispanic audience. “They are more likely than the average Hispanic to be college graduates as well as more acculturated and bilingual”, Celestin notes.

For the Latin American market, advertising in The History Channel is sold by Miami based Olecom, which reaches more than 21 million households in Latin America. Olecom also sells other A&E properties including The Biography Channel. The History Channels program is distributed by HBO in Latin America.

Fox Sports en español (FSE) has been another important entrant into the Latin cable TV market. The News Corp., through subsidiary Fox Panamerican Sports, owned sports programming giant entered the Hispanic market in 1996. It understands itself as the standard bearer in the U.S. Spanish-language television marketplace. It features live telecasts of the best soccer leagues in the world, exclusive coverage of the most important Latin American club soccer tournaments, alongside Major League Baseball and combat sports.
ESPN Deportes Television is a strong competitor to FSE in sports programming. Launched by Disney in 2004, it reaches approximately 4 million Hispanic cable households. It is devoted to serving the Latino sports fans —a fan base, it esteems, that has been historically underserved— by offering high-quality, culturally relevant sports programming.

To Discovery’s Luis Silberwasser “Discovery en Español in the U.S. and Discovery Channel in Latin America have emerged as the leading factual networks in their regions, because they provide high quality programming that is not only entertaining but insightful, informative”. In Silberwasser’s opinion, “this has been a positive development for the advertising industry because they are now able to optimize their media buys, targeting different audiences /different demographics, usually in a more cost-effective manner rather than simply putting all their eggs in one basket via broadcast.”

When Fragmentation Helps:

“While fragmentation of the audience viewing traditional television formats is continuing, the consumption of broadcast content on all platforms, including traditional television, is clearly growing”. This is the main conclusion of a study recently released by Accenture. The consulting firms´ conclusions are certainly also true for the Hispanic market. “Having fragmentation has helped. When a novella is created it runs on Mun2 and at Telemundo.com”, says Jackie Hernandez Fallous, COO of Telemundo. “Everything is multimedia. You can watch online, Mun2 (cable), on your mobile phone. Even read it in books.” Hernandez adds that audience fragmentation through multimedia platforms provides Telemundo a unique selling proposition through integration of platforms, brand integration and product integration. “We don’t just sell on a CPM basis but through a marketing platform with multiple touch points that generate a lot of engagement”, she adds.

Wing’s Dussan agrees, “we can’t see television as a stand alone media any more, it is a channel with multiple points of contact and the secret is to maintain all those touch points covered”. He provides an example: “Television plays a very important role in Goya's media mix as it offers the possibility to showcase the brand in endemic environments such as cooking segments etc and to move into online extensions with recipes and other forms of consumer participation. The fact that Television offers high reach is also ideal for the brand and has proven results in terms of awareness and purchase intent.”

Content, the Big Differentiator:

One thing has remained the same in the evolution of TV targeting Latin Audiences: Content is King. “Content is the competitive advantage and the big differentiator”, Hernandez Fallous notes. “Telemundo produces and creates its own content. That is why we have increased share. And we are able to distribute it over the Internet, cable and the phone.” Discovery’s Silberwasser agrees,” when it comes to content the key element and differentiator is that we deliver the highest quality programming when it comes to factual television. Our programming looks to spark the curiosity of viewers everywhere and Discovery en Español in the US Hispanic market and Discovery Channel in Latin America bring the best of the Discovery content from all over the globe, produced with the highest production values in the industry. We also complement this with an outstanding array of original production programs with content that is relevant and is about topics of interest to Latin American and Hispanic audiences such as our recent “El Rescate Perfecto” production about the successful rescue of hostages, including a presidential candidate, in the Colombian jungle. We look to nourish our audiences’ thirst for knowledge while entertaining them.

The Growth of Direct Response TV:
Another clear trend in the evolution of TV targeting Latin audiences over the last ten years is the growth of Direct Response TV. SpongeTech(R) Delivery Systems, Inc., announced recently that it will begin marketing and advertising its products in Latin America. The company will establish a Direct Response Television Marketing program in various regions of Latin America. The company has retained Miami based advertising agency Omni Direct Inc. to lead the marketing campaign in Latin America.

Mercury Media, a Santa Monica California based direct response media agency, recently opened a Hispanic Direct Response unit. The new unit will provide account planning and campaign management services for Hispanic clients, while Mercury Media will handle analytics, media management and tracking for the Hispanic campaigns. Mercury En Español will introduce campaigns that include online, phone and mobile advertising components as well.

Existing Mercury clients started crossing over to the Hispanic market in 2008, when the company first ventured into the arena, Miyares said. The agency's client roster, which has grown from two to twelve, includes Conair, InStyler, Safeway Insurance, Magic Bullet and Youthology. The new practice has two dedicated employees and the company expects to add three to five additional people in the next year, said Marcelino Miyares, Jr., director of Mercury En Español. At least six more clients, including existing Mercury clients, are expected to test the Spanish language advertising realm in the second half of this year, Miyares said.
Another agency that recently entered the Latin Direct Response TV market is Eclipse Marketing Services, a direct marketing service provider for the cable and entertainment industries, has formed a new Hispanic marketing division and named Karen Habib as director of Hispanic marketing to lead it.
 

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