The Ethnic BarrierHitting the niche markets of Asians, Hispanics and African-Americans is tough 11/21/2004 07:00:00 PM Eastern
Having established itself in the general market, local cable television is pecking at niche markets, trying to lure viewers and advertising dollars away from big-city broadcast stations that thrive on ethnic audiences. Getting a slice of a slice won’t be easy.
Of primary interest are Hispanics in such markets as Los Angeles and Miami, and Asians in other top metropolitan areas. But while cable systems, rep firms and interconnects (which allow advertisers to put their local spots on several area cable systems) are actively touting cable’s geographic targeting and ethnic tiers, it will take a long time for local cable to pose a threat to ethnic-targeted broadcast stations.
The number of ethnic-targeted cable networks has skyrocketed in the past few years, from two—Galavisión and BET—to more than 100. But the vast majority of these networks still don’t have large enough audiences in the local markets to attract much attention from advertisers.
The abundance of Hispanic broadcast stations in markets like Los Angeles makes it difficult to sell local cable ads within Hispanic cable networks.
“My experience may be atypical, but to my knowledge, [local ethnic cable] is not a medium that’s being widely used by advertisers,” says Monica Gadsby, CEO and managing director at Tapestry, the multicultural division of Starcom MediaVest Group. “The reason is that there are few options, and the options are still struggling to establish themselves on the national scene, never mind trying to establish themselves on the local level.”
Still, while there are relatively few ethnic-targeted cable networks drawing big audiences in local markets and only a handful that are actively selling local ad time, cable systems, rep firms and interconnects are jumping into the ethnic market. They typically offer advertisers a combination of ethnic cable networks and general-market networks in neighborhoods with a high concentration of Hispanics, Asians or African-Americans.
“We’re probably looking at about 100 [advertisers] right now in various stages of development, from the early stages of presenting the opportunity to close to closing,” says Deborah Cuffaro, vice president of news and multicultural sales at National Cable Communications (NCC).
Adlink, the Los Angeles interconnect, offers advertisers customized tools like its Adtag and Adcopy systems to split commercials into general-market and ethnic-market spots that air simultaneously in different geographic regions.
“Most people think of Adtag and Adcopy along the lines of what has been presented in the past, where auto dealers might advertise their high-end product in Beverly Hills and a pickup truck in a rural area,” says Rick Oster, executive vice president and general sales manager at Adlink. “It’s just a shift in thinking to say this is a powerful tool to slice and dice the market by ethnicity.”
But there are obstacles. While the Asian population in the U.S. is growing fast—up 72% in the 1990s, to 11.9 million—some media buyers say that the multiple languages spoken within the population make it difficult for cable to reach a sizeable audience.
“The Asian market is so fragmented that it’s hard to tie everybody together with programming,” says Steve Lee, chief operating officer of Los Angeles-based 3AM Advertising & Marketing. But local cable is making some headway.
Content is key. In the past few years, the number of Hispanic cable networks has zoomed to 69, according to media-buying agency Magna Global USA. Among them are Mun2, NBC Universal’s bilingual network; Fox Sports en Español; CNN en Español; the soccer-focused GolTV; and the new English-language Sí channel.
“Not a lot of advertisers necessarily look at cable, but it is something we’re starting to look at because you’re seeing in the Nielsen numbers that there is a following on some of these [networks],” says Sofia Escamilla, media director at La Agencia de Orci, which buys ethnic cable spots for such clients as Honda.
Direct-broadcast satellite (DBS) led the way, targeting ethnic viewers in the late 1990s. DirecTV launched its Para Todos tier in 1999, and it now runs 45 Hispanic networks, including feeds of Latin American channels.
Cable systems like Comcast started offering ethnic tiers around the same time as DBS. And because DBS doesn’t insert local commercials, the cable industry capitalized on a competitive advantage.
“In the high-density Hispanic markets—such as Los Angeles, Dallas, San Antonio and Miami—you have advertisers that are traditional English-language advertisers that have recognized this as a good-sized customer base,” says Dan Casey, executive vice president of media sales at rep firm WorldLink. “And there are also locally owned businesses that have decided to use Spanish-language creative to target the Hispanic marketplace.”
Cable also has 41 Asian networks, including International Channel, which has programs in 20 languages but targets English-speaking Asians in prime time. In addition, ImaginAsian debuted this month in San Francisco.
Unlike other ethnic channels, most Asian networks are filled with inexpensive ads from local merchants and carry virtually no national advertising. That’s changing, but slowly. “Nationally, Asians are 4% of the population, but in San Francisco it’s 24%, in Seattle it’s 16%, and in New York it’s 10%,” explains Bill Georges, vice president of ad sales at the International Channel. “Advertisers, especially regional and local advertisers, understand that, and national advertisers are focusing on those areas.”
“There should be more broadcast stations in areas with high Asian populations,” says Thomas Pyun, vice president of ad sales at ImaginAsian. Instead, cable operators are jumping in.
African-Americans account for 13% of the population, and there are a handful of networks targeting them, including broadcast networks that, like UPN, have focused heavily on black-themed shows. More African-American–targeted cable networks are emerging, including TV One, a lifestyle network that premiered in January.
Targeting ethnic groups with local cable simply makes sense, says Cynthia Perkins-Roberts, director of network marketing development at the Cabletelevision Advertising Bureau.
“The mere fact that ethnic groups tend to live in concentrated areas,” she says, “means local cable is the primary targeting tool to reach consumers in those markets.”