Spanish-language advertising expenditures grew 6.1 percent in 2005, or more than double the rate of English-language ad spending, according to a report from TNS Media Intelligence.
The figure comes as good news to Los Angeles-based Univision Communications and Entravision Communications, two of the largest Spanish broadcasters in the country.
For fiscal year 2005, Univision reported a 9.2 percent increase in net revenues. Nearly 60 percent of the new revenues came from TV, which accounts for about 70 percent of the company’s revenue base. The company’s other divisions include radio, Internet, and music.
The announcement in February that Univision’s board had “decided to begin a process to explore strategic alternatives to enhance shareholder value” has set the stage for competitive bidding by acquisitive media conglomerates, although the announcement had no time line or promise of an eventual sale. However, in the company’s final earning release for 2005, chairman A. Jerrold Perenchio referred to the positive ad market in saying the company’s “strong momentum and positive growth prospects, the scarcity value of our assets, favorable market conditions and increasing interest in Spanish-language media, led us to conclude that now was the right time to evaluate our options for maximizing shareholder value.”
Entravision owns 48 TV stations and 52 radio stations, mostly Univision affiliates, making the company dependent on Univision’s fortunes. Entravision also owns Vista Media, a Hispanic-focused billboard company. Entravision reported revenue growth of 8 percent during calendar 2005.
“We are benefiting from a vibrant Hispanic market that continues to expand in terms of population, purchasing power, and importance to advertisers,” declared Chairman Walter Ulloa in the company’s fourth-quarter 2005 earnings announcement, adding that “these trends are fueling our growth.”
Total Spanish-language media spending in 2005 was $4.2 billion, according to the TNS report. By comparison, English-language media spending came to $143 billion, with a 3 percent annual growth rate. Fast-growth segments included Internet ads (13 percent), cable TV (11 percent), outdoor (9.8 percent), and Sunday magazines (8.2 percent). Spot TV registered the largest percentage decline at -9.5 percent.
For 2006, TNS predicts Spanish-language network television spending will increase 10 percent, the best growth rate of any medium. Entravision guidance indicates first-quarter revenue growth of “mid single digit percentages.”
Univision expects high single-digit growth for its divisions except for music, where growth has slowed. But overall, chief financial officer Andrew Hobson projects “continued strong operating performance in 2006 due to our competitive positioning, increased commitment by advertisers to Hispanic audiences and our upcoming World Cup coverage.”
