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Houston offers a great deal of opportunity as well as issues for media buyers.
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Houston
The city may have a metrics problem, but that hasn't stopped the nation's 4th largest Hispanic market from building a reputation as a tech-focused media marketplace.
November 26, 2007
By Kevin Downey
Powered by a new image as a high-tech media market, Houston remains the epicenter of the energy industry, fueling a city where ethnic diversity is the rule, not the exception.
Texas' largest city and the fourth largest Hispanic marketplace in the U.S. with nearly 525,000 Latino TV homes, according to Nielsen Media Research, is also on the leading edge of technology- driven media measurement. But it' s unlikely the city will stake a claim to these bragging rights .
The Nielsen television ratings service switched in October to local people meters after using a combination of diaries and tuning meters for decades. The result has been lower average quarter-hour ratings for most stations, forcing media buyers to spend for more to achieve reach and frequency goals. (Marketing y Medios is a division of The Nielsen Co.)
Equally problematic for the same reasons, Arbitron's portable people meter ratings service, which replaced the diary service in June, has also led lower average-quarter hour ratings (but higher weekly audiences) for stations.
Urban and Hispanic radio formats have taken the deepest ratings hits upon making an adjustment to electronic radio measurement. "Some of the changes you would expect," such as a dip in ratings, said Ceril Shagrin, evp of corporate research at Univision, which has seven radio stations in the metro. "But then we looked at the changes over the summer. We made no changes in format and lost a significant portion of our audience. That doesn't happen."
The ratings haze
The PPM was tested in Houston for two years before achieving Media Rating Council accreditation and going live. Overall, quarterly average hour ratings are down 20% compared to the diary while listening among Hispanics has dropped 25%. Shagrin and other Hispanic broadcasters speculate that the drop is due in part to Hispanics carrying PPMs less often than non-Latinos. She and others also believe that Spanish-speaking PPM wearers are often exposed to English-language radio stations in public areas.
Conversely, Spanish broadcasters believe English-speaking participants are less inclined to visit stores or other areas where Spanish-language music is being played.
For a glimpse into the magnitude of the ratings differences, just take a look at how the ratings game is playing out at some Spanish-language stations:
• Univision KLTN "EsteréoLatino" 102.9 FM in fall 2006 tied for No. 3 among all stations on a total-day basis, based on listeners 12-plus. It fell to No. 8 in October with the PPM.
• Clear Channel's Spanish contemporary station KLOL "Mega" 101.1 FM slid from No. 7 to No. 9.
• Liberman Broadcasting's Mexican regional KTJM "La Raza" 98.5 FM tumbled from No. 14 to No. 21. Liberman ranks behind Univision in Hispanic station ownership in Houston, with five, according to BIA Financial Network.
Getting any young person to participate in a survey is tough. Consider that 55 % in Houston's Latino population is 18-34 years old, per Scarborough Research, compared to 34 % of the total population.
"Hispanics, even when Arbitron is able to recruit them, don't provide usable data as often [as non-Latinos]," said Shagrin. Arbitron weights the data to match the overall population where it falls short on the demographic makeup of PPM participants.
Houston, we have a PPM problem
Media buyers in Houston are doing their best to work with the new ratings data. When ratings tumble and prices remain the same, cost-per-points soar. That is, buyers can only acquire fewer spots with a client's budget.
"The lower ratings have significantly impacted our negotiations," said Lorena Cavazos, media buying director of Houston agency Lopez Negrete. "Stations and agencies are working together to find a middle ground, so not one or the other feels the impact so greatly."
Nielsen's LPM has proven to be less challenging than Arbitron's PPM partly because buyers have had more than five years' experience dealing with LPM's in other markets.
Nielsen is continuing to generate local Hispanic ratings with its diary system, the Nielsen Hispanic Station Index (NHSI). Lopez Negrete's Cavazos said her agency is using the NHSI data in negotiations. In September, Nielsen discontinued its national diary system, Nielsen Hispanic Television Index (NHTI).
Ratings are down for most Houston stations compared to those generated by diaries. However, LPMs are doing a better job of tracking all the channels people watch. "It's a relatively new change, but we're seeing the ratings spread to more outlets," said Peter Diaz, president and general manager of CBS affiliate KHOU Channel 11. He said the LPM is picking up more stations viewed by respondents than the diary, which results in lower ratings for individual stations. KHOU ranked No. 4 among Hispanics in prime time in July. "It's affecting everyone" about equally, Diaz said. Market-wide declines make it easier for stations to explain lower ratings to advertisers.
Univision's KXLN Channel 45 ranked No. 1 among Hispanics in July in prime time. Telemundo's KTMD Channel 47 ranked a distant No. 2 while TeleFutura KFTH Channel 67 was a competitive No. 3.
Other stations include Liberman's KZJL Channel 61 and Azteca America's KUVM Channel 34. Latin America Broadcasting's LAT TV's low-power KCVH Channel 30 has been in the market since May 2006 and bilingual music/entertainment digital station LATV is new to the market.
Buyers say having more outlets gives them increased leverage in negotiations with stations, but many of these smaller stations are so far generating comparatively tiny ratings.
Hispanic media provides wide presence
Houston is an incredibly competitive Hispanic media market, with several TV and radio stations and seven audited newspapers and magazines, according to Latino Print Network.
The biggest is weekly shopping guide La Subasta, which has a circulation of just under 148,000. Bilingual Semana has a weekly circulation of 125,000 and Meximerica's biweekly Rumbo de Houston, in the market since 2004, has a circ of nearly 102,000. Meanwhile, the Houston Chronicle has two Spanish-language publications, newspaper La Voz with a weekly circ of 92,000 and entertainment paper La Vibra, which has a weekly circulation of nearly 90,000.
"One thing we've seen is that the number of stations and media outlets has grown," said Lopez Negrete's Cavazos. "That has lent itself to more competition in the marketplace."
The Latino population in Houston has been soaring. There are an estimated 1.9 million Latinos, accounting for one-third the area's population, according to forecasting firm Global Insight. The Latino population will add another 325,000 people by 2012, when 35% of people in the city will be Hispanic.
The Latino population is young and 46% speak only Spanish or Spanish more than English. This is 24% above the average of 32 Hispanic markets tracked by Scarborough. Another 24% are bilingual which is 7% below the average.
These demographics dictate the kind of media that advertisers use to reach Latinos—mostly Spanish-language broadcast and print outlets. The Internet and other new media are used far less often.
The immigration flow into Houston in the past two years has led to harsh debate, as it has in most parts of the country, with just under half of Houston residents saying it's having a negative impact on the area, according to Rice University's 2007 Houston Area Survey.
Among white Houstonians, 38% say relations among ethnic groups is good or excellent, down from 50% in 2004.
The figure largely reflects continued strain among local residents resulting from the influx of people from New Orleans after Hurricane Katrina in 2005.
It's also a reflection of city residents' growing unease with immigration, said Rice University sociology professor Stephen Klineberg. "There's an anti-immigrant fervor around the country that's palpable," he said. "There's a deepening anxiety that Americans feel their own economic situation is being compromised." About 45% of people in Houston say the biggest problem with immigration is the strain in puts on public services, according to the Rice study.
But the often heated immigration debate has not deterred advertisers from targeting Latinos, said Patricia Torres-Burd, executive vice president of programming and branding at LAT TV.
Ad spending on Hispanic-targeted media jumped 6.8% in 2006 to $135 million from $126 million in 2005, according to Hispanic Business magazine.
"We have not had any negative response—it's really the opposite," said Torres-Burd. "The city is continuing to grow and our audience continues to grow. As long as you're programming properly, it will remain a viable, growing market."
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