Worldwide Advertising: Country Profiles - Spain/After a slump in advertising revenue in the early 90s, agencies are again enjoying a boom. And with the rise of digital TV and teenage magazines, the prognosis now looks very good. By John Parry

Spain does not expect a repeat of the spectacular late 80s boom when the economy grew more than 5 per cent annually in three consecutive years. Even so, GDP is estimated to grow by 3 per cent this year, the country is well in line with Maastricht’s targets to join EMU with the first group of European Union member states, inflation is at its lowest since the 60s, the stock market is charting a series of record highs and business optimism is increasing.

Spain does not expect a repeat of the spectacular late 80s boom

when the economy grew more than 5 per cent annually in three consecutive

years. Even so, GDP is estimated to grow by 3 per cent this year, the

country is well in line with Maastricht’s targets to join EMU with the

first group of European Union member states, inflation is at its lowest

since the 60s, the stock market is charting a series of record highs and

business optimism is increasing.



’Agencies have been doing good business since mid-1996. The market is

bullish,’ Lawrence Sudlow, the managing director of Sudlow Media,

says.



The Madrid agency has established a Spanish buying centre jointly with

another shop, Eureka.



Despite this optimism, advertisers have to be resourceful. Caution over

unemployment (Spain has western Europe’s highest jobless tally according

to official figures) has kept consumer spending increases below the

economic growth rate.



Advertisers have become very demanding since prices were slashed in the

advertising industry recession in 1993 and 1994. ’Agencies sold the

shirts off their backs,’ Sudlow says. ’Advertisers haven’t forgotten -

now the challenge is to find ways of improving our service without it

costing more.’



In the long term, use of the Internet and the take-off of digital

television will help advertisers to target more accurately, Marina

Perez, the editor of Control, a Spanish advertising and marketing

magazine, explains. Spain’s first digital TV group, Canal Satellite,

started broadcasting this year. The Internet clocked up 800,000 users in

Spain at the end of last year.



On average, each household has at least one TV - Spaniards are not, by

and large, regular readers. According to a survey by the media research

organisation, the EGM (Estudio General de Medios), from April 1996 to

March 1997 38 per cent of Spaniards claimed to read a daily newspaper,

while 37.3 per cent read a monthly magazine and 36.7 per cent a

weekly.



The EGM cites the sports newspaper, Marca, as the leader, with 2,635,000

readers over the same period, followed by the national general daily, El

Pais, with 1,470,000, and the Periodico de Catalunya, a Barcelona-based

daily, with 1,026,000 readers.



Leading national newspapers have not enjoyed a significant increase in

their combined readership in recent years, while El Diario 16, one of

the six major national dailies, is struggling to keep readers and

overcome its debt problems. Provincial and regional newspapers are

gaining ground, perhaps because the trend towards regional autonomy in

Spain for Catalonia, the Basque country and the 17 other autonomous

regional governments, is becoming more marked.



TV advertisers want more proof of their campaign results, since the cost

of ads has begun to rise again after a plunge of 80 per cent two years

ago when channels saturated their screens with cheap airtime. ’Then, the

stations were virtually giving away slots but, since the introduction of

the European Union directive in Spain (which placed hourly limits on

advertising time), advertising charges are rising and are much more

realistic,’ Perez explains.



TV research is covered by Sofres, a French-owned company, and by

Infoadex, a Nielsen/Duplo Spanish joint venture. The EGM, the

circulation analysis by Oficina de Justificacion de la Difusion, and the

business readers’ survey, Dirigentes, owned by the Recoletos Group (in

turn controlled by Pearson), are the main sources of information about

print media. Sudlow says: ’The OJD needs developing, especially for the

trade press. Although foreign influence has had an impact on the methods

used in Spanish media research, there is still room for

improvement.’



If Spanish children’s love of TV is any indication, audio-visual media

have a promising future, according to a survey published in April by

Central Media. Four- to 12-year-olds spend, on average, more than three

hours a day watching TV.



Newspapers have been full of what has been coined ’la guerra de

television digital’ (the digital TV war), so called because the

government is trying to halt progress of the first group in order to

allow a rival consortium, which includes the state broadcaster, to get

off the ground on equal terms.



The Canal Satellite grouping, headed by the media magnate, Jesus de

Polanco, began broadcasting in January and has stolen a march on the

rival consortium, led by Telefonica and the state network, RTVE (Radio

Television Espanola), which isn’t scheduled to start its service before

the summer. Meanwhile, the government is trying to slow down the advance

of Polanco’s group by casting legal impediments in its path.



The stakes are high in digital TV - the two groups plan to invest at

least dollars 560 million between them over the next three years. Yet,

in the long term, advertisers should benefit from the growing acceptance

of the medium. Rosemary Reid, an independent foreign TV executive based

in Madrid, says: ’The advance of digital TV is at a very early stage,

but advertisers plan to benefit from cheaper rates and better

targeting.’



One of the most important trends is the rising level of readership among

teenagers and young adults. ’They are reading more magazines and we are

seeing the launch of more special interest magazines,’ Sudlow says.

Earlier this year Grupo Zeta launched Conocer, a lifestyle magazine

aimed at 20- to 30-year-olds. Interest in foreign influences,

particularly English-language voice-overs and titles, is high in this

group.



Euro-enthusiasm remains very strong here. Spaniards want to be

identified with the EU. They are equally keen to absorb American fashion

and culture, to help reaffirm their new cosmopolitan identity.



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