Univision Policy of ‘Not-Com’ Controversial

Most television networks are awash in “dot-com” advertising. But on Spanish-language giant Univision, you won’t see any. And that’s despite a burgeoning category of Spanish-language Web sites and portals hungry to reach the network’s vast audience.

Wary of would-be competitors, Univision is declining all dot-com advertising while it develops its own online strategy. That policy has sparked controversy because Univision’s dominant market position sharply reduces dot-coms’ access to Spanish-language TV.

The Los Angeles-based network has 92% of the prime-time audience that watches TV in Spanish, according to Nielsen Media Research.

“English-speaking viewers have 60 or 160 choices of channels to watch, but in Hispanic media, there is no question that most of the power and most of the viewership is concentrated in Univision,” said Carl J. Kravetz, chief executive of Los Angeles-based Cruz/Kravetz: Ideas and chairman of the American Assn. of Advertising Agencies’ Hispanic committee.

Univision President and CEO Henry Cisneros declined a Times interview request. But in a Dec. 6 article that quoted Cisneros, the trade magazine Advertising Age said Univision was holding off on Web ads while it defines its strategy. Advertisers are free to turn to other outlets, including competing networks, billboards, print and radio, Cisneros told the publication.

Univision is expected early next year to launch its own Internet venture but has consistently declined to comment on that project.

Univision isn’t the only media outlet to turn down ads from potential competitors. Time Warner’s CNN has declined ads for sites it views as competitors, among them Salon.com. But Univision’s ban is notable in that it covers all dot-coms, from portals to e-commerce sites, according to companies whose ads have been rejected.

Critics say the network has a community obligation to educate viewers about the Internet and help close the digital rift that separates Latinos from nonminorities.

“This really does create a blockage of information to a specific set of consumers,” Kravetz said.

Univision has held fast to its ban as the Latino Internet category explodes. New York-based StarMedia Network Inc., a Spanish- and Portuguese-language portal, was the first to go public last May, followed by Phoenix-based start-up QuePasa.com. Others such as Yupi.com have gained prominence, and new sites are sprouting daily, focusing on everything from sports to personal finance and entertainment. Yahoo, America Online and Prodigy have also branched into Spanish-language cyberspace.

For Univision to turn away the advertising dollars those companies represent may seem startling. Some Latino ad executives, however, are calling it irresponsible.

“They’ve left at least $50 million on the table. They’ve missed out on an opportunity to grow a category, and they’ve missed out on an opportunity to help millions of Latinos,” said Lionel Sosa, CEO of San Antonio-based Garcia LKS, whose clients include QuePasa.com.

Sosa said many Univision viewers are first-generation immigrants most likely to be left behind in the digital revolution. “Keeping them from having the information that every other American has because you want to have it all--I’m not sure how moral that is,” he said. “There is a difference between wanting to be the biggest one and being the only one.”

Others have taken a softer approach, calling the ban a business decision--albeit controversial--that is Univision’s to make.

“In their quest to create a product in that category, they are doing what they feel will better ensure success when they enter the market,” said Adolfo Aguilar, president of San Antonio-based Creative Civilization and president of the Assn. of Hispanic Advertising Agencies.

The impact of the ban on Latino dot-coms is unclear. QuePasa.com has an exclusive arrangement with the Telemundo network, which has the remaining 8% of the Spanish-language TV market and owns QuePasa shares. But Sosa said QuePasa first sought an affiliation with Univision. In addition to ads on Telemundo, QuePasa’s strategy includes heavy outdoor advertising on billboards, bus shelters and subway cars, with plans to expand to English-language TV next year.

“They have forced us to look for alternative media that we have found to be extremely efficient,” Sosa said of Univision.

Spanish- and Portuguese-language portal StarMedia already runs the highest number of its U.S. TV ads on Fox’s “Ally McBeal” and “The X-Files,” said co-founder and CEO Fernando Espuelas. The Univision ban is part of the reason, but the strategy runs deeper. “We think our user base is bilingual and skews more affluent,” Espuelas said.

To be sure, some are profiting from the ban.

“Our doors are open for all Internet advertisers, and we are working with them, not only to provide traditional spots but also more strategic program and product integration campaigns,” Alan Sokol, Telemundo’s chief operating officer said in a prepared statement.

InternetMercado, a Los Angeles-based bilingual magazine that stresses the fundamentals of the Internet, is doing its best to capitalize on the ban. The publication, which will launch this month, has placed ads in Advertising Age promoting itself as a Univision alternative, said Marcelino Miyares, president and publisher of JSA en espanol, whose publications include InternetMercado.

Losers in the equation, however, could be Latino ad agencies that had hoped to grow new business with the advent of Latino dot-coms, much as general market agencies have. According to figures released Monday by Competitive Media Reporting, dot-com firms spent $1.37 billion on advertising in traditional media--excluding the Internet itself--in the January-September period, up from $349.1 million a year ago.

A blackout by Univision, Spanish-language media’s 800-pound gorilla, could prevent such profits flowing to Latino agencies, analysts said. An estimated 80% of all Spanish-language TV ad spending in the U.S. goes to Univision, according to Chicago-based Starcom USA.

Univision’s shares eased 31 cents to $91.50 on the New York Stock Exchange on Tuesday.