Latino Localism Could Bolster Ad Revenues

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Thirty years ago, Spanish-language programming was practically nonexistent on American television. Today, Spanish-language content can be found all over the media landscape, including on over 650 radio stations, in hundreds of newspapers and magazines and on network and cable television.

But is making customers buy digital pay packages before reaching Spanish-language programming a winning cable strategy?

LESSONS LEARNED

Cable’s initial success in Latino markets came from basic practices that continue to be relevant today. We spoke the language in our marketing materials and through our sales and customer-service representatives, and we responded to the requirement to be a part of the community through participation in community events. These factors continue to represent essential components for successfully marketing cable to the Latino community. Latinos are watching Spanish-language programming. Some facts:

  • 82% of Hispanic households are multilingual; 89% of these households watch Spanish-language TV (Source: Horowitz Associates);
  • 29% of these households watch it “all of the time” (Meneses research);
  • In Los Angeles, the finale for a telenovela recently finished first in primetime and garnered a 10.4 household rating and 16 share.

What does this suggest about Latino viewership in cable households? These homes are watching the local broadcast affiliates of networks such as Telemundo and Univision, given the relatively low penetration of Hispanic tiers. They’re not finding the price-value relationship required for making the leap to Hispanic tiers because they require additional equipment and content purchases.

Here lies an opportunity: Increase digital penetration in Latino households by including popular Spanish channels on the lowest possible tier, differentiated from the content on the local Spanish broadcasters, and provide the best opportunities for local-advertising insertion.

Adding a Spanish-language cable network to a lower tier creates the opportunity for local-advertising alternatives to broadcast radio and television.

Last year, Spanish-language TV represented $1.2 billion of the estimated $2.7 billion upfront market. That’s a very significant percentage of the $3.5 billion Latino advertisers spend today. These advertising allocations will continue to rise with the growth of this market. Hispanic households will grow to 25% by 2050, according to U.S. Census Bureau projections.

Additional analysis of dual-language households reaffirms that while the primary language for third-generation Hispanics is English, their culture remains Latino. National radio groups are responding to this demographic with a new format, “hurban” (Hispanic urban). In fact, the number of local Spanish radio stations is projected to reach 700 by year-end, and ESPN has responded by launching ESPN Deportes Radio, a full-time network that will debut this fall.

BEING IN THE COMMUNITY

Getting local businesses in the Latino community to advertise is also one of the best ways to continue growing cable ad revenue. These advertisers, who are established members of the community, illustrate the local operator’s ties to that community through their brands’ appearances on the cable system.

We have an opportunity to benefit from the brand affiliation of these community leaders on our cable channels and to attract their sizable advertising budgets. If we do not capitalize on this opportunity, the local Spanish-language broadcasters will remain unchallenged until there are more Spanish-language channels on lower tiers.

Additionally, local events remain a critical component for increasing digital sales in the Latino community. With a flagship Spanish channel on expanded or digital basic, the system’s ad sales, community relations and marketing departments can combine resources to demonstrate the ties that are critical for inching up cable penetration in the Latino community.

For example, in a recent study: 74% of Hispanic women and 66% of Hispanic men would be more likely to consider purchasing a product after participating in a live marketing event (source: Jack Morton Worldwide).

Participating in a live event would make Latinos more receptive to future advertising about the product, representing a boon for local advertisers participating in the event as well as the cable system.

ESPN Deportes is sponsoring local affiliate events in an effort to provide cable systems and their advertisers with more local-event opportunities. ESPN Deportes provides co-branding opportunities including support for a local advertiser’s in-store promotional events, including appearances by ESPN Deportes athletes and commentators, to leading Hispanic advertising agencies.

SUPERIOR VALUE WINS

Cable’s success in serving Latino households will come from widely viewed Spanish-language entertainment channels which feature programming of interest at a lower price point and more widely distributed package.

All the drivers are in place — quality content, growth of Hispanic households and increasing advertising budgets — to create what has the potential to be a highly profitable business within the next few years. This solution draws from cable’s proven success in packaging its product to serve the needs of each community and tapping into popular ad-supported content to create an attractive price-value relationship for its customers.

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