MEXICO CITY: Grupo Televisa, Mexico's leading broadcaster, has announced it will review how it sells advertising after it saw ad sales slump for the second quarter in a row.
Net sales overall – covering content, Sky, cable and other businesses – were down 1.5% in the three months to the end of June; ad sales in particular fell 9.8%, following a 7.8% decline in the first quarter of the year.
Reuters noted that, as in the US, Mexico's broadcasters are facing challenges as younger viewers turn away from cable to streaming options like Netflix and as advertisers redirect spending to online ads. Televisa's own pricing structure was also a factor in some clients shifting budgets elsewhere.
While the company is aiming to reduce its reliance on advertising – the share of net sales in Q2 stood at 20.8% compared to 22.7% a year earlier – it also intends to change the way it sells advertising.
In an earnings call, reported by the Wall Street Journal, Executive Vice President Alfonso de Angoitia explained that while ratings at Televisa's flagship Channel 2 had been rising, the business had not benefited since much of its inventory was sold on an upfront basis, priced per spot, based on factors including the previous year's ratings.
"In the last few weeks, Channel 2 has been delivering more viewers than the entire universe of paid television networks excluding Televisa's networks," he said. "A single channel is having more audience than the aggregate audience of over 100 channels."
The consequence has been that clients have been able to reach their target numbers at a smaller expense.
The company indicated it was in the process of evaluating "the implementation of an alternative pricing mechanism which would come into effect starting in 2018".
What that means, said de Angoitia, is that it will "sell audiences rather than spots at a fixed price".
Net sales overall – covering content, Sky, cable and other businesses – were down 1.5% in the three months to the end of June; ad sales in particular fell 9.8%, following a 7.8% decline in the first quarter of the year.
Reuters noted that, as in the US, Mexico's broadcasters are facing challenges as younger viewers turn away from cable to streaming options like Netflix and as advertisers redirect spending to online ads. Televisa's own pricing structure was also a factor in some clients shifting budgets elsewhere.
While the company is aiming to reduce its reliance on advertising – the share of net sales in Q2 stood at 20.8% compared to 22.7% a year earlier – it also intends to change the way it sells advertising.
In an earnings call, reported by the Wall Street Journal, Executive Vice President Alfonso de Angoitia explained that while ratings at Televisa's flagship Channel 2 had been rising, the business had not benefited since much of its inventory was sold on an upfront basis, priced per spot, based on factors including the previous year's ratings.
"In the last few weeks, Channel 2 has been delivering more viewers than the entire universe of paid television networks excluding Televisa's networks," he said. "A single channel is having more audience than the aggregate audience of over 100 channels."
The consequence has been that clients have been able to reach their target numbers at a smaller expense.
The company indicated it was in the process of evaluating "the implementation of an alternative pricing mechanism which would come into effect starting in 2018".
What that means, said de Angoitia, is that it will "sell audiences rather than spots at a fixed price".
Data sourced from Televisa, Reuters, Wall Street Journal; additional content by WARC staff
