As the general upfront TV market nears completion, the Hispanic upfront market is just starting. The reason for that is that most advertisers make general buys before making niche buys. But with the
growth of Hispanic TV and the increasing Hispanic population, as confirmed by recent census figures, it may not stay niche for long.
Last year, Univision, the largest Hispanic network, sold $501
million in the upfront market, up from $425 million the year before. Ninety-two advertisers made buys, up from 79, which is one explanation for the growth. New categories such as financial were added,
although traditional categories were the biggest buyers, according to Tom McGarrity, president of network sales.
Another reason for the growth was that Univision significantly raised its rates.
Hispanic advertising used to cost "a dollar a holler," as the saying goes, but the growth of Univision permitted it to raise rates, so it is now more aligned with general market prices, according to
Jorge Percovich, general manager of Media Planning Group, the multicultural buying division of Havas Advertising. "There have been big increases two years in a row," he says.
This year,
Univision's rates might not jump because it will offer combo deals in association with the second network it will launch on Jan. 14, 2002. "They have to get advertising committed to the new network,
so they're doing combo deals that give you an advantage," Percovich says.
The new network, as yet unnamed, will offer movies and other programming to counter other Hispanic networks that run
novelas, Spanish language soap operas, in prime time.
Univision is confident for this year's upfront because of the new network and because it has exclusive broadcast rights for World Cup soccer,
which runs from May 31 to June 30 next year. McGarrity says this is the first year for cross platform sales, with the company selling both major networks, the Galavision cable network and local
stations it owns in Hispanic markets. Advertising will also be sold on Univision.com, the Internet portal.
Univision is far ahead of the other major U.S. Hispanic network, Telemundo, with prime
time ratings as high as 90% at some times, according to Nielsen figures. But Telemundo is growing too, having recently purchased Gems Cable and renaming it to Mun2 to compete with Galavision. It has
also purchased independent stations in Los Angeles and Dallas. Meanwhile, more competition is coming from TVAzteca, a Mexican network coming to the U.S. later this year. A soft launch, market by
market, is planned, according to Percovich.
McGarrity says the Hispanic upfront hasn't really started yet because the general upfront is still in progress. But it's winding down, so he believes
the Hispanic upfront will start next week, after the holiday. It should last until August.
Percovich notes that the rules for the Hispanic upfront are different from the general. In the general
upfront, buyers are only committed to the first 25% of their buy, with the rest optional. With Hispanic, buyers must commit to the first 50%. Meanwhile, scatter prices are sold at a premium by
Hispanic networks to encourage upfront sales, whereas general networks sell it at market prices based on supply and demand. The reason is that Hispanic TV needs to assure more dollars are committed
because they are more liable to lose advertising, since advertisers cut niche spending first.
Percovich hopes this will begin to change this year. "With the growth of the Hispanic market,
advertisers may not want to cut the niche first."