TelevisaUnivision: Ad Pricing Gap Has Narrowed

For many years previous leaders of Univision have complained of a pricing gap between what U.S. advertisers pay for Spanish television versus English language competitors. But following last year’s merger with Mexico’s Televisa, new TelevisaUnivision CEO Wade Davis says the reconstituted U.S. ad sales team has pretty much eliminated the gap as far as new advertisers are concerned.

“For people who have been long-time Spanish language advertisers, unfortunately the way Univision was selling historically really was focused on price, not the value proposition. So the real discount from a gap standpoint is with the legacy U.S. Hispanic advertisers. That gap can range from anywhere between a 20% discount to a 40% discount,” said Davis in answer to an analyst’s question during his quarterly Wall Street conference call Thursday following release of the company’s fourth quarter and full year 2022 financial results.

He then praised Donna Speciale, president of the company’s U.S. ad sales, and her team. “As we bring on new advertisers to the platform, the gap is almost zero,” Davis said. And he added that for the Vix streaming business CPMs are generally on par or at a premium.

He also noted that Vix, after launching last year, is already past its maximum loss period and will turn profitable this year. Beginning in 2024 it will contribute to earnings.

CFO Carlos Ferreiro reported double-digit revenue growth for 2022, with adjusted EBITDA up by $4 million despite heavy investing in streaming. Consolidated revenue grew 13% to $4.7 billion. Advertising revenue for the year grew 10% to $2.8 billion, driven by strong upfronts in both the U.S. and Mexico.

U.S. advertising revenue increased 10% to $1.8 billion, reflecting growth in both linear and streaming, as well as record mid-term political revenue. In Mexico, advertising revenue increased 9% to $1 billion, and also benefitted from World Cup advertising revenue which increased 9% relative to the prior World Cup.

For the fourth quarter, total revenues were up 22% to $1.45 billion, with the U.S. up 28% to $963.2 million and Mexico up 11% to $490.3 million.

Total advertising revenue grew 10% to $849.7 million in the quarter, comprising 14% growth in the U.S. to $494.1 million and 4% growth in Mexico to $355.6 million.

“We achieved record mid-term political revenue and we finished the year strong,” Ferreiro told the analysts. He noted not only the political haul, but new clients and improved pricing as reasons for the U.S. growth.

Davis had noted in his opening remarks that TelevisaUnivision’s ad performance “bucked the market trend and accelerated into the end of the year, with 14% growth.”

“According to data gathered by Magna, this is double the growth in the overall [ad] market, excluding search. For the full year we grew 10%, led by our national business, which grew 12%,” Davis said. Local was up 8%.

But he still sees a huge opportunity for more growth.

“We talked about the U.S. Hispanic market being [equivalent to] the fifth largest economy in the world. Within the universe of advertisers in the U.S. who spend mainly on television, only about half of them are currently advertising to our audience in Spanish. It is remarkable that there is an economy inside the U.S. which is the size of the U.K. and half of the active advertisers have not even begun to tap into this market,” the CEO noted.