Karen Habib believes there has never been a better time to marketing cable to U.S. Hispanics. Not only does cable have more interesting products and pricing to offer to Hispanic audiences, it is finally gaining market share from the satellite providers that traditionally have outspent cable in the Hispanic segment. As Eclipse Marketing Services was putting the finishing touches to the Jan/Feb 2011 issue of Nexos Latinos, a quarterly Spanish-language magazine with a circulation of nearly 1 million, Habib spoke to Hispanic TV Update about why cable is at a crossroads and why marketing to Hispanics has to be part of any media mix.
MCN: Satellite providers continue to outspend cable in marketing to the Hispanic segment. DirecTV, for instance, allocates 40% of every media dollar against the Hispanic segment. Why do you think cable hasn't followed suit?
Karen Habib: Dish and DirecTV have a long history in the Hispanic market. They've been around for a long time, and they have been very aggressive targeting the segment. They have very aggressive pricing and packaging in place, very low-entry level offers. They've done a good job building their Hispanic base and building Hispanic loyalty. But now the equation is really changing: Now most cable operators have launched pricing and packaging that makes cable more interesting, more appetizing product, like Multilatino, Time Warner's El Paquetazo, Cox's El Mix. These are packages that no longer require a buy-through and they have a very competitive prize; maybe not at the entry level but they have a whole lot to offer, with the bundle, and the Internet, international calling plans.
MCN: So cable is now more aggressive?
KH: Not only that; but now that cable has gotten more aggressive with their product, they are ratching up their marketing dollars and this is already impacting the satellite guys. The cable operators are coming in and fighting back. Think about it: The bundle penetration has grown an outstanding 185% in the past three years alone. That shows that people are taking it; and it makes sense. The Latino consumer is very value-driven, so the idea of bundling really resonates with this market.
MCN: How are MSOs communicating all these features to their target consumer?
KH: There are a lot of tactics out there and there is more of them every day -- more than a cable operator needs to do, actually. And in Hispanic, quite frankly, they're doing it with very small budgets. The problem is that the marketing is increasingly fragmented. MSOs continue to do TV spots, broadcast buys... And in the Hispanic market there is radio, which continues to play an important role. On top of that there are all these social media and online. So there is also a lot of confusion out there. How do we put everything together and make sense of all this?
MCN: Is this a concern among MSOs?
KH: We heard from cable operators about the need to communicate their message and tell their whole story to the Latino community. They wanted to talk about tiers, pricing, packaging, high-speed Internet, international calling plans, DVRs, HD. There's so much to tell, but how do you communicate all this in a 30-second spot? It's a dilemma for a marketer. It was based on that insight that we launched Nexos Latinos [in 2009]. The idea is that by having a magazine that gives them that real estate they can really describe features and benefits of their products.
Another interesting thing is that, unlike what happens in the Anglo market, many products are still completely new for Hispanics. For example, Hispanic on Demand. There is a need to inform consumers about what it is, where to find it, what their benefits are, etc. There is a need to communicate that if it says free on demand, it is really free...
MCN: Nexos is on its seventh issue now. How has it changed since it launched and where do you see it going next?
KH: We are working on our January/February 2011 issue and what's really exciting is that it is going to be a thicker magazine (28 pages, instead of 16); this is a pretty significant expansion. There is going to be much more editorial. Why? We've heard from readers that that gives it staying power; keeps it in the household, unlike standard direct mail pieces. A magazine gets more readership in the home. We are giving it that appeal. Our readers want to learn about food, recipes, celebrity gossip, technology, gadgets, etc. So hopefuly that will help us not only with retention, but also with acquisition.
MCN: Would you be open to traditional advertising for the magazine?
KH: We are looking to bring in advertisers, but we want to do that in a way that is going to be integrated into the magazine, keeping in mind that what we want is to promote the services and benefits of the MSOs. We are opening up to third party advertisers.
MCN: You have talked about the importance of the B2B market.
KH: We think there is a tremendous opportunity there, and I think MSOs are also seeing that opportunity. A lot of them, though, have separate departments handling B2B and don't necessarily follow Hispanic. But the creation of small businesses in the Hispanic realm continues to outpace the general market; so we think there is a story there.
I was reading recently about Detroit and how Hispanic entrepreneurship has played such a pivotal role in revitalizing that city. There is a great entrepreneurial spirit among Latinos, so I think there is definitely more than can be done in the B2B marketing area. Hispanic-owned businesses grew at a pace 3 times the national average between 1997 and 2007 per the U.S. Census Bureau.
MCN: Finally, what would you recommend MSOs who still are trying to figure out how to market to U.S. Hispanics?
KH: I don't think you can pursue one media instead of the other; I definitely think it's a matter of strategizing smartly and prioritizing. I do believe in what I preach about direct mail. I do encourage cable operators to use [our magazine] as a centerpiece for their strategy in terms of acquisition when you have a sale to make, to close. Now, for branding purposes, of course television, radio and online continue to be very important.
One that everybody should definitely keep an eye on is mobile marketing. It's fascinating what's happening with mobile marketing. We need to be on top of that. You are reaching people wherever they are, on their mobile device. It's a game changer. Latinos are overindexing in all these areas.