The Big Five TV networks are expecting to receive a record $9.5 billion at the upfront ad market this year. But they're going to be giving up some of their commercial dollars to fast-growing Spanish-language broadcasters Univision and Telemundo, which are expecting their own upfront haul to be, well, mas macho.
When the official selling season begins — after all the major networks present their 2011-12 schedules to advertisers next week — expect the two Hispanic networks to take in between 15-20 percent more ad dollars than they did in last year's upfront.
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In total, it’s expected that Univision will rake in about $1.3 billion, while Telemundo will tally about $450 million.
(Pictured: Telemundo's popular telenovela "La Reina del Sur.")
A good portion of those added dollars will come from new advertiser brands, but there will also be money moving from the English-language networks into Hispanic.
Why?
Because while primetime ratings in the advertiser-coveted 18-49 age demo are down for all five major English-language networks this season, ratings and viewership are up for the Hispanic networks.
What’s more, the results of the new census show that there is a potential audience of about 50 million Hispanics in the U.S. and many of them can be reached through the two Hispanic broadcast networks.
David Lawenda, president of ad sales for Univision Communications, told TheWrap that the awareness of advertisers about the growing importance of Hispanic television has resulted in his network bringing in 150 new brands over the past year, and he expects that to continue in this upfront.
"We belong in the same [media buying] conversation with the Big Four broadcast networks," Lawenda said. "We are no longer a niche network."
In the recent February sweeps month, Univision on 22 nights had higher ratings than at least one of the Big Four English-language networks in the 18-34 or 18-49 demos in primetime.
And Telemundo had its best first quarter of the year in 2011 in its history in viewers, averaging 1.2 million in primetime per night. It also had its most watched April primetime.
Telemundo's current 10 p.m. novela “La Reina del Sur” has peaked at more than 3.3 million viewers and on several nights has drawn more than 2.2 million 18-49 viewers to edge out Univision in that hour.
And Univision's 9 p.m. novela “Teresa” (pictured) premiered on March 30 with 4.9 million viewers and 2.7 million 18-49 viewers.
It has outdrawn both ABC and NBC on certain nights since in those demos.
While Telemundo is not a threat to take a lion's share of dollars away from Univision, it is making its own inroads. Once commanding below a 20 percent share of primetime Hispanic audience, it’s now averaging about 28 percent, compared to Univision's 72 percent in the 18-34 and 18-49 demos.
Telemundo COO Jackie Hernandez agrees that the Hispanic networks are now being viewed as more of a first option by many advertisers who traditionally advertised only with the English language networks.
"Advertisers are looking at the total market and the total viewers," she told TheWrap. "They are no longer looking at the Hispanic networks as simply Hispanic viewers but part of their overall market strategy."
A strong selling point for Telemundo has been that for many years now, it has been producing its own novelas, which has allowed it to integrate products into the shows.
"We believe we've cracked the code in integrating products seemlessly into our novelas," Hernandez said. "And as the ratings for our novelas go up, we are also bringing in more dollars."
Hernandez sees more financial services, pharmaceuticals and consumer electronics advertisers moving into Hispanic television in this upfront.
Hernandez also told TheWrap that as part of the NBC Universal family, Telemundo is working with NBCU to find ways to tap into the 91 million Hispanic viewers who are reached by NBC and the NBCU cable networks. That could include creating culturally relevant content across the networks or coming up with ways to market themselves together by sponsoring events.
For its part, Univision has a started a client development unit that is specifically dedicated to bringing new brands into the fold.
Over the past year, advertisers and brands in categories like consumer packaged goods, auto, soft drinks and wireless/telecom have moved dollars from English-langauge broadcasters into Univision, Lawenda said.
In addition to that, he expects increased spending in this upfront from categories like movies, quick service restaurants, pharmaceuticals and financials.
Danielle Gonzales, executive VP of Tapestry, the largest multicultural media agency in the U.S., whose clients in Hispanic TV include Procter & Gamble, Allstate, General Motors, Burger King, Best Buy and Kellog's said she sees more clients joining the "Hispanic train" at a steady pace over the next three to five years.
And each network has its own attributes from an advertiser point of view, she said. "Most clients buy both. You need Univision for reach, but you can get better pricing with Telemundo, which can be more flexible with its integrations and custom ideas."
Also part of the picture during these upfronts, Telemundo will get to sell 2012 Summer Olympics inventory (sister network NBC has English-language rights), which should boost its upfront ad total, while Univision will not have the World Cup inventory to sell like it did last year.
But Lawenda believes that will be made up in increased demand and with new advertisers. "I think advertisers see the train leaving the station and they want to be on board," he said.
Both Univision and Telemundo had changes at the top in recent months but those are not expected to impact upfront selling in any significant way.
At Univision, Joe Uva's contract as CEO was not renewed, while at Telemundo, longtime president Don Browne announced his retirement. And also at Univision, Peter Lazarus, who, as executive VP of network sales, oversaw the upfront negotiations, left the company.
Univision will search for a new CEO, but in January, the company had brought in former NBC Universal head Randy Falco as executive VP and COO, and he is familiar with upfront negotiations.
Day-to-day negotiations for Univision this upfront will be handled by Maelia Macin, Univision's executive vice president of network sales.
At Telemundo, Jackie Hernandez is still in place as COO, and she has always taken an active role in the upfront negotiations.
In December, previous Telemundo head of ad sales, Mike Rodriguez was given a new position, and has been replaced by Dan Lovinger, who was most recently senior VP, MTV 360 brand sales and integrated marketing.
Tapestry's Gonzales said the changes will not make much difference to the advertiser clients regarding the upfront, but it could effect the pace of the negotiations a bit. "We were familiar with Peter and Mike, and they were familiar with us, so it will take a little while to familiar with the new people," she told TheWrap. "But that's probably not going to impact anything but the pace."