Hispanic Pay TV: A Big Marketing Machine

Paid subscription TV for Hispanics is a big business. In fact, advertising/subscription marketing budgets of Pay TV companies are a major force in the Hispanic advertising market. DirecTV Group was the 18th largest advertiser in the Hispanic market in 2008, with a measured advertising expenditure of $78.3 million. In addition, it was the leading advertiser in the Spanish-language spot TV category. Miami based DMG Solutions who buys direct response media for DirecTVMás lures potential subscribers through direct response advertising receiving many thousand of phone calls per month. There are more than a dozen major media and telecommunications companies vying for the Hispanic consumer, OPT-IN for free to Portada Magazine and e-letters here: they range from satellite TV providers like DirecTV and Dish, to MSO's like Comcast and Time Warner Cable to Verizon FIOS, which is a bundled communications (Internet, telephone, and TV) service which operates over fiber optic communications networks.

Dish Network ranked nr. 9 among Hispanic Advertisers in 2008 with $35.7 million, according to NS Media Intelligence (nr. 19 among newspapers and 13 in Spanish-language Spot TV). Time Warner able ranked Nr. 12 in Spanish-language spot. ($12.918 million) and Cablevision nr. 18 Spanish- language spot ($9.49 million). “Pay TV looks at the Hispanic market as an added cost in two areas. Marketing and channel space (bandwidth).Programming targeted to Latinos uses bandwidth that otherwise would have been allocated to the general market”, says Joseph Schramm, Managing partner at Schramm Sports & Entertainment Inc. According to Schramm there needs to be a clear return from the marketing activities. “The pay TV provider needs to be able to see that they can access revenues - from advertising and subscription fees -that would equal those that would have been generated by the general market. Likewise, the investment in Spanish language marketing efforts needs to pay off for attracting Hispanic customers.” In Schramm's view, “cable TV companies are currently actively looking to close the gap. “The Hispanic market is increasingly a highly competitive marketplace for the cable TV companies. In 2010-2012, you will see a significant increase in marketing efforts to attract customers to Hispanic programming tiers with full Triple Play service.” However, Schramm continues, efforts will truly reach a higher impact only if the telephony companies focus marketing efforts in this market as well. Content To meet the increasing demand of Hispanic Pay TV subscribers, cable and satellite operators have allocated increased bandwidth for Hispanic programming launching an ever-growing array of channels that specifically appeal to their Hispanic segments, like, Fox Sports en Español, GolTV, MTV Tr3s, CineLatino and Canal Sur.

Hispanic programming tiers are more robust, and Hispanic On Demand and HD programming is roliferating. This translates to higher ratings and advertising opportunities. There are also plentiful sponsorship opportunities for Hispanic marketers in 2010, with big-ticket events like the FIFA World Cup South Africa™ and the Billboard Awards in Puerto Rico coming up. Due to their sports oriented content ESPN Deportes, Fox Sports en espanol and Gol TV, are in a particular good  situation to profit both from audience and advertising increases at the upcoming 2010 Soccer World Cup. However, there still seems to be space for more niche content. At least that is what Karen Habib, Director of Hispanic Marketing at Eclipse Marketing Services, thinks: “I find it unbelievable that there's still no Hispanic home decorating network or food channel! I'd also like to see more Hispanic comedy … tastefully done.” Advertising Vehicle? Subscription TV can be a great medium for advertisers. As magazines, local newspapers and digital media properties, they often provide venues to connect national brands to local audiences. According to Marcelo Salup, Media Director at Miami based DMG Solutions, “Any national signal (TV, Satellite and cable) will have the highest response ratios you've ever seen; this is a direct result of the number of peoplereached.”

Advertising in Pay TV vehicles can be highly targeted and cost-effective.” By considering the targets' level of acculturation, language dominance, and income level, and customizing your message accordingly advertisers will find an eager and receptive audience among Latinos.”, says Habib. Still, the industry's share of the advertising pie remains small. Research analyst Deana Myers at SNL Kagan calculates that cable networks received a mere 4 percent of the advertising investment in Spanish-language television in 2007, or about $122 million compared to $3 billion for all Spanishlanguage television. The share of other Pay TV providers, including satellite TV, is not likely to be much larger. One of the main reasons for the still relatively low expenditure is that Hispanic marketing budgets continue to present a challenge. As Habib notes “In difficult economic times, it's often the first area to be cut. Companies need to understand that the Hispanic market represents their greatest growth potential, and that Hispanic Marketing, properly executed, can be the best use of their marketing budgets.” Since Hispanic marketing should be more targeted to areas with high Hispanic audiences, spot buys on Cable TV would be our recommendation. Advertisers could select the niche channels that appeal most to their targets and are best suited or their products and services.” The Print - Marketing Liaison... In their marketing efforts Pay TV companies often use direct mail and custom publishing strategies. This is the case of DirecTV with its DirecTVMás programing guide, which produces the Hispanic custom publication with the highest circulation.

DirecTVMás programming guide is distributed bimonthly to more than 900,000 DirecTV Hispanic subscribers across the country including the main Hispanic DMA's. It is mailed to subscriber homes for free as part of a strategic loyalty program that has enabled DirecTV to connect with its customers in a culturally relevant and insightful manner. The book contains a TV guide as well as relevant and informative content about sports, lifestyle, finance and entertainment. Los Angeles based en ESPANOL Publishing Group develops 100% of the content of DirecTVMás guide. “The project has its own assigned team of writers, designers, contributors and producers who together create a compelling balance between culturally relevant content and striking editorial designs,” says Michaelle Fastlicht, owner at En Español Publishing Group. “The team work alongside DirecTV's programmers to identify the programming highlights and special events. EnESPANOL  also bares the responsibility to produce the actual piece, working with printers around the country to look for the latest printing, binding and insertion trends. We have created a solid and successful production infrastructure that permits us to pass savings on to our clients.” ...Third Party Advertising Although DirecTVMás did not allow third party advertisers at first, the attractive circulation and customer profile has been sought after by interested advertisers. In 2010, the Mas guide will for the first time, open its pages for third party advertisers. “We are confident that both service providers as well as retailers and financial institutions to name a few, will be amongst our founding advertisers. We will work closely with them to develop cross promotions and “out of the box” solutions to better benefit from this attractive audience,” Fastlicht notes. “We will take every measure to ensure a quick and responsive ROI. We are launching strategic readership studies to better acquaint our advertisers with our readers, their interests, habits, trends and spending patterns. The studies will be made available in a “tailor made” fashion, this means that our advertisers will be able to order specific and custom developed studies based on their particular marketing needs,” she concludes. Eclipse Marketing is another player in the Hispanic custom publishing sector.

The New Jersey based company assists cable operators and programmers to engage their customers and prospects with market-specific, targeted bilingual campaigns. For example, Eclipse created the Nexos Latinos, a quarterly magazine which is designed to entertain, educate, and create relevant value for cable products through informative and interesting articles featuring Latino celebrities and stories of interest. Cable operators include upgrade and acquisition offers and have seen positive results. The magazine was launched in the fall of 2009 and distributed nationwide.

The main aim of the publication, published by Eclipse Marketing, is to entertain as well as educate Hispanic audiences on a wide array of cable products, from Video On Demand and HD to High Speed Internet and digital phone. “We work with the cable companies on a local basis to customize the magazine for each market.” Cable customers include Comcast and Time Warner Cable. The magazine is also printed independently in each market. The first issue had a page count of 16 pages. For the April issue Habib expects at least 20 pages. The magazine is open to Third Party Advertising. Local Market Customization Nexos Latinos is customized to local markets “Local market customization involves customizing the pricing, packaging, features and benefits offered by a cable operator in a given market. We can also mention local, community events in the magazine, as well as incorporate many of the cable company's branding elements.” The magazine can either be mailed to Hispanic households, which is its predominant form of distribution, or inserted in local newspapers. “Our inaugural issue was inserted in such local newspapers as Viva Colorado in Denver and El Mundo in Las Vegas,” says Habib. She also tells Portada that in smaller markets or when there are budget constraints (direct mail is expensive) cable operators often find it easier to insert the magazine in Hispanic newspapers.


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