Univision ban on dot-com ads riles media buyers

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Univision's decision to ban dot-com ads from its airwaves has upset media buyers and other executives at ad agencies and Hispanic Web sites.

The action, some believe, skates close to an antitrust violation. Univision denied that and defended its move, and antitrust experts cautioned it would be unusual for the courts to step in on such a controversy.

Univision at least temporarily has said it will turn away ads for Web sites as it develops its own e-commerce strategy. On the surface, the decision is similar to one by Time Warner's CNN to decline ads for rival sites. But Univision's unusually strong dominance in the Hispanic market raises questions about the impact of its move.


"Univision is treading on very thin ice," said Carl Kravetz, CEO of Cruz/Kravetz Ideas, Los Angeles, and chairman of the American Association of Advertising Agencies' Hispanic committee. "It really comes close to too much media concentration and borders on illegality. If Microsoft was doing it, they would be in front of a judge right now."

"It makes me pretty uncomfortable," agreed Allen Banks, Saatchi & Saatchi exec VP-North American media director, and a member of Four A's media policy committee. "It's a little more dicey because it is so tough to buy around them."

Univision's dot-com decision comes as the network prepares to launch its own Internet portal early next year, according to analysts and others.

Univision President-CEO Henry Cisneros, former U.S. secretary of Housing & Urban Development, said the network decided to hold off on accepting Web ads until it worked out its own Internet plans.

"It's not as if we are pulling people off the air," Mr. Cisneros said. "We were on the verge of accepting an ad and we pulled back because we had not yet sorted out where we wanted to be on this. We want to look at our long-run strategy and didn't want to [run rival ads] without sorting it out well."


Media buyers estimate Miami-based Univision may have up to a 90% share of the U.S. Spanish-language TV audience among its primary audience, which includes some primarily Spanish-speaking households whose demographic is one with a low rate of computer ownership and Internet usage. Univision is rumored to be planning to offer computers to customers who sign up for its service, a strategy that could fuel rapid growth.

"If your goal is to be in the Hispanic homes dominated by non-English speakers . . . most Spanish speakers watch TV," said Kathy Sosa, creative director at Garcia LKS, San Antonio. "If I was launching a Hispanic site and knew I couldn't advertise [on Univision], I would have to rethink my business plan."

Antitrust experts said while courts are generally reluctant to step into such situations, Univision's may be unusual.

"The question is at what point do they become an `essential facility,' " said Eleanor Fox, a law professor at New York University. "Usually under our law, courts are suspicious of such claims. But you can pass a line where you become a bottleneck."

Mr. Cisneros denied Univision has a stranglehold on the Hispanic ad market.

"There are many media in which they can do ads," he said. "There are other TV networks, print, radio and billboards. I don't think Univision has blocked anyone by saying it is not taking ads. [Marketers still] have vast access to the general public."

An estimated 80% of U.S. Spanish-language TV ad spending goes to Univision, according to Monica Gadsby, senior VP-director of Hispanic media at Starcom USA, Chicago.

Executives of several ad groups said they expect to meet soon to discuss Univision's action. Mr. Kravetz said his committee will talk about it at a Jan. 20 meeting. Adolfo Aguilar, president of Creative Civilization, San Antonio, and president of the Association of Hispanic Advertising Agencies, said his board already has discussed how to respond.

"I would hope the people in power would be intelligent and sensitive enough to conduct their business in a fashion that is fair," Mr. Aguilar said. "I hope they would realize that, from a relationship point of view, this doesn't help their relations with advertisers and agencies."


Without Univision, dot-com sites have to spend their marketing dollars elsewhere, a prospect that pleases Univision competitors.

"We wholeheartedly endorse Univision's policy," said James M. McNamara, president-CEO of Telemundo. The No. 2 Spanish-language TV network has picked up significant dot-com business. Telemundo has also swapped airtime for equity stakes in Quepasa.com and Espanol.com., which sells Spanish-language books, music and other items.

In addition to Telemundo and some smaller cable channels, marketers use Spanish-language billboards, radio ads and magazines to reach their target audiences.

But Starcom's Ms. Gadsby said, "There is no single replacement for Univision."

Analysts said one thing Univision's policy will not affect is the network's bottom line. John Graves, senior media and Internet analyst with Paribas Capital Markets, estimates Univision's ad revenue will reach $700 million for 1999, up from $577 million last year.

Mary Sutter is a correspondent for Advertising Age International

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