For three years, a little-heralded local television station's 6 p.m. newscast has been the most-watched news show among adults, beating out even its Big Three network-affiliated rivals.
In May, the station's 11 p.m. news won the time period among the demographic group that advertisers seek out the most, 18- to 34-year-olds, according to the Nielsen Media Research survey.
So if KMEX-TV Channel 34's ratings are so great, why is it having such a hard time convincing mainstream advertisers to buy advertising time?
During prime time, when KMEX is typically the fourth-rated station in the L.A. market, it typically charges only $1,000 per Nielsen rating point for a 30-second ad, according to Dennis MacCauley, the station's general sales manager. Its Big Three competitors, meanwhile, are able to charge about $16,000 per prime-time rating point, he said.
Why the gap? Opinions are varied and numerous, but most industry observers agree on one thing: Big-ticket advertisers do not understand the buying power of the Latino consumer.
"There's a lot of misperception that (Latinos) don't have any money," said Anita Santiago, owner of Anita Santiago Advertising Inc., a Spanish-language ad agency based in Santa Monica. "It's the best-kept secret. They have tons of money Latinos are the No. 1 buyers of homes in Los Angeles. I'm baffled."
There are 5.5 million Latinos in the L.A. television market, according to Nielsen, meaning Latinos make up 38 percent of the population of L.A. and Orange counties. The buying power of U.S. Latinos is growing at three times the rate of inflation, and is expected to reach $348 billion this year, according to a recent study.
KMEX does not release its annual revenues, but MacCauley said the station takes in less than half as much as comparably rated English-language stations in the L.A. market.
KMEX and its parent, Century City-based Univision Communication Inc., are on a campaign to boost ad revenues by generating awareness of the buying power of Latino consumers among advertisers.
Univision has begun putting billboard advertisements near the headquarters of Fortune 500 companies, and earlier this year it appointed one of the nation's highest-profile Latino leaders, former Secretary of Housing and Urban Development Henry Cisneros, as president of the network. Cisneros soon afterward said his first priority was to bring in more advertising dollars to the network.
"He's opened many doors for us," said MacCauley. "You can imagine, as former Secretary of HUD, it's a little easier for him to call up a CEO of a company and see him than it is for me."
While Cisneros serves as a powerful bridge between the mainstream and Latino population, Univision and KMEX still face a substantial challenge in getting corporate CEOs to understand the spending habits of Latinos.
"The reality is that a lot of the clients are still sitting on the fence," said Rosa Serrano, senior vice president for the multicultural group at media buying service Western International Media. "The understanding of the Hispanic market isn't there yet ... I've seen a lot of resistance to understanding it."
The source of the resistence, says Serrano, is a perception that most Latinos are menial laborers and don't go to restaurants or buy new cars.
"It's a very negative stereotype propagated by the media. It's what a lot of people are exposed to," said Serrano.
Some in the industry speculate that part of the problem involves converting ads from English to Spanish.
MacCauley recounted a meeting with a major supermarket chain that KMEX had been courting as an advertiser. The company backed off, stating that it didn't have enough money to do it right in other words, it didn't think it would be worth paying the cost of converting its existing, English-language advertising into Spanish.
There remains a significant gap between the amount of advertising dollars spent on mainstream TV and the amount spent on Spanish-language television nationwide, not just at KMEX.
Last year, $354.2 million was spent on Spanish-language TV advertising in the top 10 Latino markets, according to HispanTelligence, the research department of Santa Barbara-based Hispanic Business Magazine Inc. That figure is dwarfed by the $35.6 billion spent on overall broadcast TV ads nationwide in 1996, according to the Television Bureau of Advertising.
L.A. is by far the biggest Spanish-language TV market in the country. Spanish-language stations here pulled in $124 million in 1996, more than double the amount spent in the No. 2-ranked Spanish market, Miami-Fort Lauderdale, according to HispanTelligence.
Although advertising time on Spanish television is under-priced relative to mainstream stations, the gap has narrowed in the last two years because of higher ratings, MacCauley said.
In addition, attitudes are changing among advertisers. Compared to five years ago, when local advertisers on KMEX were restricted to a select group of local merchants, now the station's list of leading advertisers includes mainstream giants like Procter & Gamble Co., General Mills and retailers like Target and Robinsons-May.
Ingrid Iannotti, a media buyer with Anita Santiago, agrees that mainstream advertisers have made significant strides in their recognition of the importance of the Latino consumer, compared to just a few years ago.
Wells Fargo Bank is one of a number of large corporations that made the jump into Spanish advertising last year. "Their awareness level absolutely went up, and it proved to them that this market gives them immediate results," Ianniotti said.
Wells Fargo's money wire service, "InterCuenta Express," pulled in a 1,000 percent increase in sales after its ads played on Spanish-language TV and radio spots, she said.
"They had to pull (the ad) from KMEX because their 800 line could not handle all the calls," said Ianotti. "They were amazed."
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