Finding Bandwidth and Marketing to Hispanics a Challenge

Linda Hardesty

When it comes to targeting Hispanics for cable, there are two big challenges: how to market to this ethnic group; and how to fit Spanish-language programming on fully-occupied bandwidth.

The bandwidth dilemma will be alleviated somewhat with more digital rollouts, but the marketing issue may be a tougher nut to crack.

A senior Galavision executive who, per company policy, requested anonymity said, "I think that they (MSOs) have a lot of things going on. The fact that they don't have people who speak the language or understand the culture makes it intimidating. Operators have to find where the Hispanics are whether they hire a database marketing firm or a Hispanic agency to help them. Another simple thing would be hiring bilingual employees. Having people like that at the MSO level certainly brings a level of attention that might otherwise go unnoticed."

Virginia Gray, VP-marketing for Cox, said, "This (Hispanic marketing) is something we're really just going to start getting into. We do quarterly direct marketing campaigns, and I think in our last one we did translate into Spanish the Anglo version of our campaign."

But simply translating English messages to Spanish can be tricky business. Tom Morrison, EVP-business development for Handshake Marketing, a company that specializes in the Hispanic market, warns, "Being a bilingual speaker is not the same as being biliterate." Morrison said there are numerous examples of hilarious and not so funny errors made in Spanish-language advertising derived from translations.

Another hurdle for marketers is the fragmentation of the Hispanic market. "The hard thing is, you say 'Hispanic' but a lot of it depends on where their country of origin is," said Gray. If it's Mexico, that's one set of programming, but if it's Puerto Rico that's different. You almost have to look at it on a market by market basis."

Morrison admits there is fragmentation in the Hispanic market, but he doesn't think it's that big of a problem. "If you look at ABC, NBC and CBS, do you think there are language and cultural differences among viewers around the country?" asked Morrison. "Hispanic is a census word, but that doesn't mean there isn't a common thread." To find the effective approach, Morrison said, "You want to be with someone who's been around the block."

Gray said Cox doesn't have a separate multicultural marketing department, and she hedged when asked if Cox's marketing department has any ethnic employees. "We don't have a multi-cultural expert."

Doug Seserman, VP-marketing for AT&T Broadband & Internet Services, said his group does not have a separate multicultural marketing department either, "but within our acquisition campaign specialists we do targeted efforts at ethnic groups. The two ethnic groups that we focus on are Hispanics across the country and Asians in the Bay area."

However, Seserman laughed when asked which markets AT&T is particularly targeting for Hispanic marketing. He said, as a result of joint venture agreements, "We're trading out a lot of our Spanish markets."

What constitutes a Spanish market is open for debate. One objection given by operators for not carrying Spanish-language channels is that the audience for such programming is not large enough in a given market.

The Galavision exec said, "In essence most cable networks are niche services. Whether it's Sci-Fi or HGTV or Animal Planet or BET, the question is: How much of this market wants this service?" Galavision looks at markets where 5% or more of the total population is Hispanic.

"I know our affiliate sales team is really pushing to get into all of the top Hispanic DMAs," said the Galavision spokesperson. "And I think that we've got a few pockets here and there, and where we're not on, it's typically a case of the parent company owning a competitive service, whether it's GEMS or Canales n. And for that reason, they give carriage to their own networks first."

Operators who want to carry more Spanish-language programming, but don't have Hispanic marketing expertise, can use turnkey materials that networks provide.

"We spend a lot of money, and we recognize that most systems don't have Hispanic marketing experts at the local level," said the Galavision exec. "It's our job to make it as simple as possible for them to reach out to the market, whether it's through cross-channel or bill inserts or direct mail or consumer promotions or sweepstakes, or whatever to help them touch the community and attract more subs to cable. And that's where we come in and try to make it: add water and stir."

But AT&T's Seserman is somewhat leery of turnkey marketing materials. "If you're selling a service that's tied to one particular programmer, like the International Channel or Jade, then it can be very effective," said Seserman. "But if you're selling the basic cable message, then a generic piece of creative that just happens to be in Spanish from a cable network isn't communicating the message that's really relevant. You need to tell a more full story of all that's available on cable and how that plays a role for a particular ethnic group.

"We have a balanced hybrid model between corporate and in-field in terms of how we implement marketing campaigns," Seserman continued. "Certain campaigns that are very national in nature, the strategy would be developed here and actually executed out of here." But he said in terms of local acquisition campaigns to sign up Hispanics, the responsibility lies at the local level.

"We worked very closely with Liberty Media in the development of Canales n," said Seserman, "but the job of acquiring a Hispanic household in a market where we've launched Canales n, that's really the field's responsibility. So what I do is just try to understand where the priorities are for growth in the business. We've definitely identified Hispanics as very underpenetrated relative to non-Hispanic households."

In terms of marketing tactics, David Jensen, VP-Liberty Media, who developed the Spanish-language digital tier, Canales n, said: "In general, the broader the tactic, the less successful it is, which is happy because those are the more expensive tactics. Radio and TV don't work very well. We find that concentrating on rifle-shot marketing - telemarketing and direct mail - is a lot more effective."

Of course the whole issue of marketing to Spanish-language viewers is moot if there's no room on the programming lineup for any Spanish-language channels.

But Cox's Gray pointed up the problem for cable: "We have limited bandwidth. We do have the ability through adding channels on our digital tier to add more ethnic programming in general. The only hard thing is requiring someone to pay a price that's premium. In other words, they're going to have to buy basic cable then buy our digital product."

However, Jensen doesn't think it's a problem for MSOs to sell Hispanics a premium product.

He said the recommended retail for Canales n is $9.95. Add that to the cost of basic at $11-$13 on average, and "you can be in and out of the cable company's door for around $20. That's pretty customer friendly," said Jensen. "And even if you require an expanded basic buy-through, which MSOs are free to do, Spanish-speaking customers still see a strong value in the product."

Canales n has corporate carriage agreements with Comcast and AT&T.

Comcast is selling Canales n on top of its expanded basic in Union, N.J., "and they're just blowing the doors off the system with this product," said Jensen. "Actually some of our best markets are markets nobody would think of as a Latino cultural center, such as Salem, Ore., cities in Iowa, Illinois and Minnesota. These are towns that have zero Spanish product. So for them, this product is a cultural oasis."

Seserman said Canales n is selling well for AT&T, too. "We're finding we're able to sell both existing cable households and upgrade them in the digital platform as well as drive new cable penetration to non-subscribing Hispanic households."