TV Azteca's sales up under new plan

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MEXICO CITY -- Mexico's No. 2 broadcaster, TV Azteca, announced a 20% increase in advertising with its third quarter results. Azteca has implemented a new sales plan called "An Intelligent Buy," which it claims will help clients optimize their TV investment using software developed by its in-house sales team.

The broadcaster aims to capture 35% to 40% of TV ad expenditures next year, according to Chairman/CEO Ricardo Salinas Pliego.

For 1997, TV Azteca had about a one-third share, but ts ratings declined significantly since last year. The divergence in ratings will likely impact TV Azteca's advertising pre-sales for 1999, especially since rival Televisa has instituted a new sales plan that aims to close its gap between audience share and ad spend share.

Azteca's ratings increased during the third quarter but still lag well below 1997 levels. Its prime-time ratings rose from 11.4 points in July, or a 19.1% share, to 13 points, or a 21% share, in September - versus a 31.1% share in September 1997.

It launched three new telenovelas during the first week of October. Prime-time ratings for the first two weeks rose to 14 points, or a 22.4% share.

For the third quarter, Azteca posted a loss of $34 million versus a profit of $45 million a year ago. Azteca attributed the loss primarily to an exchange rate loss of $55 million versus an exchange-rate gain of $10.7 million in the third quarter of 1997.

The Mexican peso devalued by 14% during the third quarter this year, TV Azteca noted, while all of its debt is dollar denominated.

Third quarter revenue was up 4% to $103 million. The low percentage increase was due to a higher TV advertising spend in the second quarter for the World Cup, said Azteca, which expects an upturn for the fourth quarter.

Copyright October 1998, Crain Communications Inc.

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