For broadcasters catering to coveted Hispanic viewers, the past year has been one fueled by change: With the introduction of Fusion, El Ray, and other English-speaking networks targeting U.S.-born Latinos, the market has become more crowded as Upfronts begin.

But for the Spanish-language "giants" like Univision and Telemundo as well as the smaller, more targeted cable networks, the competition has been a positive. "It’s good for everybody," says Mike Valdes-Fauli, President and CEO of Pinta, the agency for Fox Hispanic Media. "Increased competition is the sign of a robust media landscape. More channels is good for the space."

Judging from the modest growth in ad revenues this year, it appears more marketers are eager to reach the Latino community-and they are open to dividing their buys among networks that produce programming for various audiences. "We have more choices than ever," says Lia Silkworth, Executive Vice President and Managing Director for Tapestry, a division of SMG Group Multicultural, whose clients include Procter & Gamble, Kellogg’s, Kraft and Samsung, among others.

For Silkworth, there’s no silver bullet when it comes to ad buys. "I take a holistic view that there’s room for different networks. My clients want large networks with the highest ratings at the lowest cost. But smaller networks are fulfilling their reach by providing more specific programming. The trick is to make sure we’re reaching consumers."

Such thinking has to a large degree altered the way business is done at the Hispanic broadcast and cable Upfront markets. "The Upfronts are no longer about GRPS on a spreadsheet," says Tom Maney, Executive Vice President of Media Sales for Fox Hispanic Media, who represents two-year-old broadcast network Mundo Fox and the Hispanic-targeted cable channels FoxDeportes, Utilisima and Nat Geo Mundo. "We start talking earlier and the whole process takes longer," he says.

Another change in his pre-Upfront meetings: "We don’t come in and present-we listen," says Maney, whose Mundo Fox Upfront presentation will take place on May 14.

Just how have the networks’ relationships with advertisers changed in recent years? A better question may be, How haven’t they changed? "Advertisers are asking us to be a partner instead of a vendor," says Craig Gellar, Senior Vice President of Advertising Sales for NuvoTV, the first English-speaking network to cater to millennial Hispanics.
 
Depending on the advertiser, the partnership can have many facets. "In some cases we’ll create content to live on their site, or we’ll give them insights into the consumer by co-funding research," says Gellar. This year, the cable network, which is currently in about 30 million households, will hold its Upfront presentation May 12th. 

"Year over year we have seen tremendous growth in the number of advertisers and investment in revenues," says Gellar. He attributes the success to being responsive to advertisers’ interests. "They all want to know two things: How do we get closer to the consumer, and how does the content fit with our brand messaging?"
 
Sometimes it comes down to "taking over" an event. "With our ability to provide high-profile content across our networks, advertisers are looking to take advantage by owning the marquee leagues across language in both English and Spanish," says Antonio Briceno, beIN Sports‘ Deputy Managing Director. One example: "For our coverage of El Clasico (Real Madrid v. Barcelona) in March, we had a number of advertisers who wanted the full reach of this audience across both languages."

Gradually, the stand-alone 30-second spot is losing ground to product integration. "Brands want to be woven in as part of the narrative content," says Pinta’s Valdes-Fauli.

NuvoTV’s Gellar concurs. "Product integration is quickly becoming the standard." This year he relied on a newly created in-house client marketing solution team to steer such partnerships.
What Gellar believe sets his team apart from others is that they are also directly involved in programming. "At the end of the day, programming needs to connect the dots," he says.
 
One series NuvoTV’s team has been involved in is Knockout, a reality competition show that Gellar describes as "The Voice with nine boxers." The series will culminate in a live bout between two finalists, and the channel is working with a hair care advertiser to integrate its product into the show. "Perhaps one of the fighters could actually have something cosmetically done that shows brand usage," he suggests.

Orchestrating the perfect marriage of content and brand isn’t the only challenge the Hispanic networks face. "What’s new this year is the importance of using multiple platforms to tell a story," says Valdes-Fauli.

Rethinking their business model is critical, since advertisers are intent on following viewers. "People are viewing TV differently than they were even a few years ago," says Tapestry’s Silkworth. "We’re seeing TV viewership decrease, likely because viewers are moving into a digital space."

She adds that, "while no one is surprised by the migration, the numbers are starting to substantiate the changes in viewing habits."
 
2014 Nielsen data reveals that Hispanic viewers watch over 27 hours of linear TV per week. They also use apps or surf the web on a smartphone nearly 6.5 hours a week, more than all adults 18+, who clock in at 4.5 hours.

In fact, Hispanics have embraced digital and social usage at similar, and sometimes higher, rates than other groups of Americans, according to a news analysis of three studies conducted by the Pew Research Center in March 2013.

"What I’m seeing across the board is our marketplace shifting to a complete understanding of the consumer picture. We’re seeing them embrace social, digital and everywhere-TV capability," says Silkworth. As a result, "TV alone has become less interesting than TV combined with the extended reach of digital and social," she adds.

This year, FoxDeportes partnered with Heineken, the TV and online sponsor of the URFA Champions League, on an unprecedented integration strategy. The network sent instant highlights of top tournament plays via the first-ever Hispanic-targeted Twitter Amplify. "We leveraged the rights we have in the Champions League, a giant soccer tournament, and Heineken purchased the Amplify schedule with Twitter," says Fox Hispanic’s Maney.

To allow for multiplatform partnerships along these lines, the networks have had to rethink their infrastructures. "Just three months ago, I restructured my sales division to handle research, pricing, planning, activations, implementation and execution," Fox Hispanic’s Maney says. "We created a new way to do business."

Turner adds that Univision is leveraging all of its assets to make those multiplatform video opportunities available across its broad portfolio.

Among the victories that Univision will trumpet on May 13 at its Upfront presentation is the fact it continues to take share from English-language media competitors. "Last year while they were flat or down, we delivered 17 percent dollar volume growth," says Turner.

Number-2 ranked Telemundo also sees the importance of multiplatform offerings. At its Upfront on May 13, the buzz will be all about a new kind of TMI: Total Market Innovation. "The new TMI redefines how advertisers can finally bring total market strategies to life in the marketplace," says Mike Rosen, Senior Vice President of Advertising Sales.

Capitalizing on the popularity of social media with Hispanic audiences, Telemundo produced its first "social commercial" this year. "We integrated viewers into an ad for Gain detergent within an episode of La Voz Kids," explains Rosen. The integration resulted in an increase of 75% in brand affinity and an 88% lift in purchase interest, according to branded entertainment measurement firm iTVX.

"Because we own the IP, we can give advertisers the ability to post and share their branded content throughout our digital and social channels, which adds value," Rosen adds.

Many executives interviewed for this report cited movie studios as a category with growth potential, since Hispanics are more likely to go to movies on opening weekend and in bigger numbers. In an effort to attract those studios, NuvoTV is working on an emerging filmmaker platform. "Viewers will have their short films reviewed by top producers and some will make it on air. We will integrate clients into that platform, which supports the Hispanic film community," NuvoTV’s Gellar explains.

The general consensus among Hispanic networks is that they are gradually inching closer to tapping sectors that traditionally underspend on Spanish-language TV. Those sectors include travel and tourism, financial services, apparel, QSR, casual dining and pharmaceuticals.
 
In addition, many higher-end brands have recognized the importance of reaching Latinos. "One misconception is that Hispanics are of low socio-economic status, but that’s just not the case,"says Pinta’s Valdes-Fauli.

Pinta was engaged by Gucci to help them with their timepiece business surrounding the Latin Grammys last year. What’s prompting such partnerships is the same thing that’s driving sales in the Hispanic market: The fact that marketers understand the buying power of educated, affluent second- and third-generation Latinosa market that represents more than a trillion dollars in spending.

"One thing we are hearing more often is the acknowledgement that the lion’s share-and in some cases 100 percent-of advertisers’ business growth in the U.S. is coming from Hispanics," observes Telemundo’s Rosen. This accounts for continued high-level support, plus impressive year-over-year growth from categories such as wireless, auto, packaged goods, retail and auto insurance. The acknowledgement has also led the network to break new categories this year, including financials, pharmaceuticals and OTC products.
 
Another category in which the networks have made some headway: beer. "In recent years we’ve seen a big influx in terms of the beer category," says Victor Parada, Vice President of Advertising Sales for the U.S. Hispanic Group, Discovery Communications, which includes Discovery en Espanol and Discovery Familia. Discovery Communications will host its Upfront event on May 13.

Since it entered the Hispanic landscape in 2005, Discovery en Espanol’s ratings have been steadily rising and consistent, says Parada. This past year, the network successfully demonstrated its ability to integrate advertisers into original programming with the miniseries Mision Innovacion, which looked at some of Latin America’s successful businesses such as Nissan, Tyson and Pemex.

Parada is equally excited about Texas Trocas, a docu-soap about a Mexican-American family that the network has committed to for two seasons. "We have an integration deal for that show, and its many facets could also work for wireless providers, automakers and beers," he says.

As to why the Hispanic market has had difficulty cracking certain categories, "There are different variables that come into play," explains Silkwood. "No one questions the size of the opportunity. But some of these companies lack the infrastructure-they don’t have people dedicated to the focusing solely on the Hispanic market."

Also, many are asking if what they’re doing in the general market is enough to reach the Hispanic segment. "There has to be a belief that connecting with a multicultural audience will make a difference," she adds.

Many advertisers who saw the ROI for certain brands introduced others to the Hispanic market in the past year. For Telemundo’s Rosen, those companies include Colgate, Campbell‘s and Diagio, a leader in the spirits business.

Univision has also seen growth in specific brands from prior advertisers. "We have activated more than 95 new brands this year, across all major categories," says Turner. New brands include Samsung Galaxy S4, Nutella and Southwest Airlines, among others. "We have healthy activity across most categories and are actively working to activate new brands and zero-share accounts," says Turner. "There is more work to be done."

Fox Hispanic’s Maney echoes this sentiment. "Have we made inroads with e-trade or financial management companies?" he asks. "Not yet. But we’re talking to them. Fifteen years ago only a couple of automotive companies were advertising. Now everyone in the category recognizes the importance of the market."
 
Maney predicts that the total dollar volume spent on advertising will likely increase about 3 to 5 percent in the coming year, but that marketers will have more brands in the space.

"All signs point to continued health in the Spanish-language TV market," says Telemundo’s Rosen. "There is a stable economic landscape compared to years past. Plus, we’re in a World Cup year, which is a huge driver for the Hispanic market that has a residual impact."

The impact will likely be shared by networks serving up soccer coverage to avid fans, including Telemundo, which kicks off an eight-year relationship with FIFA in 2015, and beIn Sports, which provides exclusive content for La Liga, Serie A, Ligue 1 and CONMEBOL/CONCACAF World Cup qualifiers. "Our offering is unique and hasn’t been available commercially in the upfront marketplace for the past two years, so we expect to garner some early summer deals tied to our league season starting in August 2014," says beIN’s Antonio Briceno. Their Upfront is on May 12.

"I love how the Hispanic-oriented networks continue to elevate the marketplace," says Tapestry’s Silkwood. "I’m loving the impact Univision has on its English-speaking counterparts. I love to see the Hispanic marketplace expanding and evolving."

Cynopsis Ad Sales: Mike Farina | VP, Sales | 203-218-6480
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