A Latino Market That's More in the Main

Cable World, Oct 14, 2002

Byline: ANDREA FIGLER

As you stand outside of Time Warner Cable headquarters in San Antonio, Texas, you can't help but notice something quite extraordinary - a pair of 50-foot-high brown and white cowboy boots sitting smack dab in front of a shopping mall just a few blocks away.

While a bit ostentatious, these boots serve as a good symbol both of the local cable operator and its market - adventurous, independent and true to the American spirit. After all, this is home to the Alamo, where the battle to liberate Texas from Mexico took place.

In fact, though San Antonio is home to a large Latino population - half of TWC's subscribers are Hispanic, according to Scarborough Research - from a business perspective the city is treated more like a general market where ethnicity is not a driving force.

"You would think that San Antonio would be very Hispanic, but it's very acculturated," says Lorena Cavazos, a senior associate for the advertising agency Bromley Communications, one of the largest Hispanic ad agencies in the U.S. "I guess, in San Antonio, you don't have very many first generations. You have a lot of second and third generations, which accounts for the acculturation."

That's one reason why advertisers look at San Antonio as a general market, says Chancey Blackburn, GM for San Antonio's ad sales and regional VP of ad sales for Time Warner Cable's Southwest region. Home Depot buys spots on the cable system's 44 networks, Blackburn explains.

The system's top advertising categories also are typical general market advertisers for cable. Local auto dealerships rank first. Retail, media, financial companies and grocery follow, respectively. The price of ads ranges from $25 per spot for a broad rotator on a niche network to $2,000 for a broad block across several networks, Blackburn says.

Chris Caldwell, media manager for BrivicBriggs Media Inc., a media planning and buying agency that covers Texas, says that although the market is acculturated, you can't ignore the Hispanic demographic. If he were to buy ads on cable, he would choose English speaking programs that skew Hispanic. That way, any client can save by producing just one ad in English.

Right now, Caldwell steers clear of cable ads in San Antonio when it comes to his client, Texas furniture chain Lacks Furniture Co. With smaller cable operators scattered on the outskirts of San Antonio, buying ads to reach the entire DMA on cable becomes cumbersome, he says.

Rotators on cable are also a bit misleading, he adds. System representatives oftentimes price a cost per point on an average of the ratings throughout the span of time in which the ad rotates, say 6 p.m. to midnight. But, typically with cable, the cable system usually runs a rotating ad at the least desirable time rather than between 7 p.m. and 10 p.m. when the higher-rated programs air, Caldwell says. Therefore, a buyer pays for the higher-rated shows without getting the benefit of those additional eyeballs, he says.

Besides, sales results have been good for Lacks via broadcast advertising, Caldwell says. "If it's not broken, why fix it?" he asked rhetorically. "If sales are growing great, why change the mix?"

But, he adds, he will buy cable if local avails open up for TLC's Trading Spaces in the San Antonio market next year. The home-improvement show, which generates good ratings for cable, is a perfect fit for a furniture store in the city. He tried to buy some time this year, but the show was already sold out.

To make Time Warner Cable's advertising mix more attractive in San Antonio, Blackburn takes advantage of the synergies provided by parent AOL Time Warner. She is currently working with an undisclosed financial company to create an advertising package that gives the company a presence on AOL, air time on the cable system and a one-page ad every quarter in one of AOL TW's financial magazines such as Fortune.

In step with its advertising clients, the cable operator, formerly known as Paragon Communications, tends to approach San Antonio as a general market. When it comes to marketing new products, Bill Prestridge, VP of engineering in San Antonio, steps in. He's in charge of the system's advanced services.

As of the end of August, the system had just under 68,000 high-speed Internet subscribers via Road Runner, Prestridge says. While AOL and Earthlink make up the rest of the system's high-speed clients, they are a small minority in comparison, he adds.

In order to bring consumers this service, Prestridge had to upgrade the system to 750 MHz. The hybrid fiber-coax upgrade, completed in 2000, cost about $110 million and took about six and a half years, he says. Now, all consumers can access high-speed and digital cable service.

And San Antonio consumers want digital cable. The market's consumers are 34% more likely to subscribe to digital cable than the rest of the country, according to Scarborough. As of the end of August, 27% of the system's 332,300 basic cable subscribers were digital subscribers, Prestridge says.