Selling local advertising on Spanish-language cable channels has never been the first, or easiest, task on cable operators’ agendas. But it should be moved up a few notches, because there’s real money at stake. Although some Time Warner Cable and Cox systems, among others, are making a play for those ad dollars, millions of dollars will remain lost to operators unless they make their case to ad agencies with qualitative data in hand, in the absence of ratings information. Most Spanish-language channels aren’t in enough homes to be rated by Nielsen. The Cabletelevision Advertising Bureau, which distributed a Latino sales guide among 3,000 advertisers, ad agencies and operator reps two years ago, does not track local Spanish ad revenues, and MSOs are reluctant to make their numbers public in any forum, a CAB official notes. But Andrew Capone, SVP of new business development for spot cable TV advertising rep firm National Cable Communications, is happy to offer his outlook on local Spanish ad revenue—and it’s a provocative one. "We’re aiming at tens of millions of dollars for next year and 2006," Capone says. Automotive, pharmaceutical, financial services and quick service (i.e. fast-food) restaurants are the product categories most likely to be big contributors to that market, Capone says. "They have specific multicultural efforts under way to capture their share of the Hispanic audience." If Capone’s assessment of the Spanish-language local ad sales market is to be accepted at face value and operators get serious about going after those ad dollars, then they’ll have to win the support of agencies targeting the Latino audience. Many are divisions of large, established ad agencies, such as New York-based The Bravo Group, which is the Hispanic marketing services unit of Young & Rubicam. Others are independently owned and focus solely on the Latino market. For the most part, these agencies are skeptical about spot cable. They are interested buying ads on cable, but two obstacles prevent them from spending their dollars in a big way: ratings and distribution. Galavision is one of the few Spanish cable channels measured regularly by Nielsen and other research companies. Additionally, some networks appear on analog lineups in certain markets and on digital in others, or show up on Latino digital tiers everywhere. For some ad agencies with blue-chip clients willing to spend on Latino media, that distribution pattern is a minus when exploring local cable expenditures. The Bravo Group’s major clients include Sears, AT&T, Mazda and McDonald’s. When it considers spot buys, local cable doesn’t enter the picture, even though the content is attractive. "Distribution and penetration are still limited to some degree," says Gloria Constanza, SVP and media services director with The Bravo Group. "When you talk [about] Galavision or Fox Sports en Espa�ol, most national advertisers want to buy them through network avails. They don’t see the need to buy locally." When local cable sales reps meet with Bravo to pitch deals, "they don’t have the positioning," Constanza adds. "I don’t see much aggressiveness on their part. You need to be creative to make the case without ratings. Take an angle that makes your argument attractive and convinces us this is the right place to spend our money. We want to be involved and we need the right material." Because many Latino nets are not rated, "you need to follow reach and specific delivery," says Silvia Malo, account director at Reynardus & Moya, a New York-based independent Latino agency whose roster of clients includes pharmaceutical company Schering-Plough and ITT. Operators and rep firms must offer more qualitative research, says NCC’s Capone. "But we know our customer base, we understand their behavior, and we’re certain we can make a compelling case for reaching upscale Latino homes," he says. Emphasizing the Audience Two decades ago, cable operators were unable to sell any local advertising on Spanish-language TV, which amounted to one broadcast network—Spanish International Network—and premium cable movie channel Galavision. The more than 40 million U.S. citizens of Latino descent have a far more bountiful cable TV menu from which to choose these days. Galavision, now a Univision Communications property, is advertiser-supported, joined by an assortment of general audience and niche channels running on basic lineups and, increasingly, Latino-centric digital tiers. A potpourri of Spanish-language channels such as ESPN Deportes and History Channel en Espa�ol, and the two or three minutes per hour most of them set aside for local use, have created an opportunity for operators to make substantial dinero off national spot or local ads—and grab shares of a $3 billion-plus annual Latino media outlay, according to research firm TNS Media Intelligence. Without ratings or substantial Latino tier penetration to showcase, operators pursuing a piece of that $3 billion pie are emphasizing audience makeup when closing deals. Time Warner Cable’s systems in Harlingen, Brownville and McAllen, Texas, covering more than 115,000 basic customers in the state’s fabled Rio Grande Valley, are on track to finish 2004 with Spanish local revenue at least 75% up from 2003, the company says. A year ago, only Fox Sports en Espa�ol avails were for sale; now Fox Sports, Galavision and mun2Television offer local avails. When making agency presentations, Time Warner Cable sales executives in Texas note the absence of ratings immediately, and then distribute data showing how upscale and affluent their Latino subscribers are. "We get more qualitative, stressing our ability to reach the most qualified candidate for their products," says Jeff Gregg, media sales general manager, Time Warner Cable Rio Grande Valley. "It takes a lot of time and a lot of meetings." Local avails on mun2—either Spanish or English—cost $50 on the Rio Grande Valley systems, while a Fox Sports’ avail costs less than $40, according to Gregg. Last fall, Fox Sports coverage of Mexican League soccer picked up local sponsorships from General Motors, Ford and Dodge auto dealerships. So far, auto dealers are Time Warner Cable’s best targets for Spanish ad revenue, followed by furniture stores. Waiting for the Research At Cox’s Arizona and Southern California systems, ad salespeople make their case to Latino advertisers and agencies by stressing upscale reach at a far lower cost than broadcast. Cox sells avails on Galavision and mun2 in the region, with other channels offered from market to market. The area includes Phoenix, San Diego, Tucson and Flagstaff. "You get around agency or advertiser concerns by selling the targetability of a channel," says Cox regional VP Mike Miller. "Most agencies buy national spot through Univision, Telemundo or Azteca America. So we go for local business from local firms not hung up on ratings, who just want the target audience in the most inexpensive way." Miller estimates that his region will see a 15% rise in Latino local sales this year, and come through with another 15% increase in 2005. As with Time Warner Cable’s Texas systems, car and car parts dealers are the leading local avail buyers, with restaurants and banks not far off the pace. Both Comcast Spotlight and MSO interconnect cooperative NCC intend to make 2005 the year national advertisers make a splash in the Latino local avail marketplace. Before Thanksgiving, Comcast Spotlight recruited former Univision national sales VP Philip Woodie to direct multicultural sales projects. His top assignment, according to Spotlight strategic alliances VP Andrew Ward: Turn Fortune 500 companies into avid local spot clients. Woodie will keep Capone and NCC abreast on sales outside Comcast markets. Ultimately, Spotlight will expand the Latino local avail push to include digital tier networks, video on demand, interactive TV and high-speed data services. The same model will be applied to advertising targeted to Asian-Americans, African-Americans and other ethnic groups. Ward says this scenario will be realized by the end of 2007, if not sooner. "This is going to become a more precise, more accountable multicultural world," Ward explains. "We’re in the first inning of a nine-inning game to create a more engaging environment, where that consumer is in control of what they watch and when through VOD, broadband and ITV." At some point, more research demonstrating audience reach and viewership must emerge, Ward says. While Comcast Spotlight develops research tools, Capone and his NCC colleagues are making agency rounds with their report "Effectively Reaching Hispanics With Spot Cable," an overview of local cable advertising and survey of which Latino networks have local avails open in the area. Of NCC’s 100 interconnects, 20 are located in markets with a significant Latino population. A number of national auto, fast-food and wireless phone advertisers have made local interconnect deals through NCC since the presentation was launched last fall, Capone says, and multicultural account managers now are employed in all major NCC markets. The more campaigning operators do—and research they provide—on behalf of Latino local sales, the sooner agencies like The Bravo Group will come around to brokering deals. "Digital itself is a huge opportunity," Constanza says. "We’ll see a lot of growth in that area. The important thing is to make the buy very efficient." The Hispanic Cable Makeup HISPANIC CABLE HOUSEHOLDS REPRESENT A $379.6 BILLION MARKETPLACE YIELDING… Source: Simmons Research 2003 Hispanic Study (covering Latinos age 18+)

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