The advertising recession that hit many tech giants and media companies in the fourth quarter of 2022 has created concerns in the industry, with many giants reporting a decline in their advertising revenue. However, some experts are optimistic that the Hispanic advertising sector may be shielded against this trend. The U.S. Hispanic market is the third-largest growing economy in the world, and there is a strong rationale for advertising targeting Hispanic consumers to increase at a much higher rate than overall U.S. advertising.
One of the publicly quoted Hispanic-targeted media companies, Entravision Corporation, has shown significant revenue expansion. For the nine months ended September 30, 2022, the company’s revenue was up 25% year-over-year, with growth in the digital segment and strong political advertising revenue in their television and audio businesses. Consolidated adjusted EBITDA also increased by 12% year-over-year.
Wade Davis, CEO of Televisa Univision, believes that the value proposition that TelevisaUnivision has to offer in a down market represents hundreds of millions of dollars to the company. Currently, only about one-third of television advertisers advertise in Spanish, and Davis believes that the ability to capture low- and zero-share advertisers, even in a down market, should continue to be a tailwind for the company.
In the past, multicultural and Hispanic advertising budget line items have often been cut by corporate America during recessions. However, the U.S. Hispanic market is the third-largest growing economy in the world, and there is a strong rationale for advertising targeting Hispanic consumers to grow at a much higher rate than overall U.S. advertising.
Entravision and TelevisaUnivision are expected to announce their Q4 2022 financial results on February 23 and March 3, respectively. These results will provide a clearer picture of how the Hispanic targeted advertising sector evolved in Q4 2022 and how it will develop in 2023.
In conclusion, while the advertising recession has created concerns in the industry, the Hispanic advertising sector may be shielded against this trend. With the U.S. Hispanic market being the third-largest growing economy in the world, there is a strong rationale for advertising targeting Hispanic consumers to increase at a much higher rate than overall U.S. advertising. It will be interesting to see how the two publicly quoted Hispanic-targeted media companies, Entravision and TelevisaUnivision, perform in the coming months.
