U.S. Hispanic Advertising Spending by Media, 2008 - 2010: New Myers Report

Hispanic language advertising expenditures are forecast to decline 11.2 percent in 2009 and will rebound slightly with 2.3 percent growth in 2010 according to a new report prepared by Jack Myers Media Business Report. Network television accounts for nearly 50 percent of all Spanish language advertising and, along with online media, it has been the least impacted by the negative trends impacting the advertising industry. In this week's report Jack Myers Media Business Report subscribers are being provided with the industry's only detailed insights on 2009 and 2010 Spanish language advertising expenditures in network television, radio, newspapers, magazines, online and out-of-home.

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Includes World Cup Revenues
M.E.D.I.Advisory Group LLC, Jack Myers, and employees accept no responsibility for any action(s) taken as a result of this forecast.
Sources: Myers Primary Research; eMarketer Report based on HispanTelligence and TNS Media Intelligence.

Total Spanish language media advertising peaked in 2008 at $4.250 billion dollars and is not likely to surpass that number until 2012. In 2008, Spanish language media totaled only 1.82% of general market advertising. In 2009, the percentage is increasing slightly to 1.87%. In 2010, Spanish language media is projected to equal 2.0% of the investments in general market media. 2010 Spanish-language advertising will be positively impacted by an estimated $230 million in World Cup advertising, $30 million in estimated incremental government advertising in support of the census, and significant political advertising in local media.

Although the Spanish speaking population is the fastest growing segment of the U.S. with one of every four children born into Spanish-heritage households, advertisers remain reluctant to embrace this audience in their native media. There are an estimated 300 national advertisers in the mix, just a small fraction of the total number of advertisers using general market national media.

The U.S. Census, due to be released in early 2011, is expected to be an eye opener in calling attention to the tremendous growth of the Hispanic audience. Research conducted in 2007 by Jack Myers Media Business Report not only established a distinctive preference among audiences of Spanish heritage for Spanish language media but also proved these audiences reward advertisers in Spanish-language media with greater loyalty and shopping preferences.

Myers may be under-estimating growth in 2010 advertising, especially network television, if current market conditions prove to be sustained and consumer holiday spending is robust. According to industry sources, Spanish network third quarter scatter business was up nearly 50% and fourth quarter performance has been strong. In local television, the second half of 2009 has been significantly stronger than the first half, with 30% year-to-year increases in automotive industry spending compared to negligible spending in the first half. Telecom, fast food, medical and consumer packaged goods categories have also been robust. Univision dominates both national and local television advertising, followed by NBC's Telemundo network and cable networks Galavision and Telefutura.

Newspapers and magazines continue to suffer from the same trends impacting general market print media, but newspaper classified advertising is off only 15% compared to 30% to 40% drops in general market classified ads. ImpreMedia has consolidated major Spanish language newspapers and is aggressively targeting leading national advertisers. Spanish language radio is struggling with ongoing challenges to the ratings issued by measurement company Arbitron based on Personal People Meters. The Spanish audience is underrepresented and only Houston, among major markets, has been accredited. With no reliable measurement source, media buyers have been reluctant to invest in the medium.

Executives from both media buyers and sellers believe the industry is in the early stages of a tipping point in marketers' attitudes toward advertising to the Hispanic and Latino audiences in their native languages. While the industry has faced multiple obstacles, the market is being perceived as a growth opportunity during the recession. Spanish language media are sold at meaningful cost-per-thousand discounts compared to general market media and Spanish language audiences are historically more responsive to advertising messages, especially when directed to them in their native languages. There are multiple research studies demonstrating that even in Spanish speaking homes where English is the first language, Spanish media retain their popularity. On any given night, Univision TV ratings are competitive with broadcast networks, and the network often ranks #1 or #2 in New York, Los Angeles and other heavily populated Hispanic markets.

Advertisers have the opportunity to target Hispanic audiences through the websites of leading Hispanic media companies such as Univision (www.univision.com) and Telemundo (http://msnlatino.telemundo.com/ ), and targeted sites such as those hosted by Terra Networks (www.terra.com), which is experiencing significant user growth and recently hosted a New York City event to tout its growth to advertisers. Yahoo! en Espanol (http://espanol.yahoo.com/ , MSN Latino (http://latino.msn.com/ ) and AOL Latino (http://latino.aol.com/ ) are all making significant investments in content targeting of the Latino market.

Jack Myers consults with media, agencies and marketers on transformative business models and revenue growth strategies. He can be contacted at jack@mediadvisorygroup.com.