Clusters Count in the San Joaquin Valley

Everything about Fresno could be summed up in one word - cluster. As home to the largest producer of agricultural products in the world, California's San Joaquin Valley, the area has huge clusters of fruits, vegetables and grains.

Those are the obvious clusters. But the area has a throng of less obvious ones as well. It has clusters of rapid growth and clusters of economically and ethnically diverse people. It's these clusters that the area's cable operator, Comcast Corp., seeks to target. And it's these clusters that many advertisers try to exploit.

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The Fresno area's Hispanic population, for one, outweighs the number of any other group, including Anglos. The city itself was 39.9% Hispanic and 37.3% Caucasian as of 2000, according to the U.S. Census. What's more, the cable operator's service area is 208% more likely to include Hispanics than the top 75 market average, according to Scarborough Research. The area is also 31% more likely to serve Asians. These ethnic clusters are so strong that the city of Fresno has its website available in both Spanish and, for the Asian population, Hmong.

Ethnicity aside, the cable operator's service area has clusters of white-collar business executives as well as areas with 15% or more unemployed residents. As a major farm town, migrant workers in Fresno come and go as the crops grow. And speaking of growth, the city's population increased 20.7% between 1990 and 2000, according to the U.S. Census.

This kind of growth and ethnic diversity makes cable ripe for targeted advertising, says John Ostlund, president of Jeffrey/Scott Advertising Co. "There's a great divide between the have and the have-nots," Ostlund says. "We utilize cable because it really helps us target those ZIP codes where the customer buys the goods that our clients want to sell."

Local retailers benefit the most from Comcast, especially with cable's cheaper prices, Ostlund adds. The average cost per point for prime-time cable in Fresno falls somewhere between $90 and $95, says Mike Peters, Comcast's general sales manager for the Fresno DMA. Broadcast, on the other hand, is somewhere between $190 and $200, according to a media buyer's estimate.

Automotive companies, particularly local dealerships, are the cable operator's top advertisers, Peters says. "We have a very good relationship with them and are trying to grow the business."

To better this relationship, Peters and his sales staff of 30 use a website called Vehix.com. The site provides extra value for any dealer who buys ad time on cable because it allows them to place their cars on the site. People use the site as a research tool to find the best deals. The site, in turn, forwards any interest or leads to the dealer.

"We can load their inventory onto it so customers can search out the cars they're looking for," Peters says. "We're looking for ways to maintain the relationships we have built with our auto dealers. We think this is one of the ways to do that."

Other Comcast systems are either already using the Vehix.com website, which provides added value for the account executives, or are in the process of rolling it out, Peters says.

As for national and regional media buyers, Fresno's cable system may be overlooked - certainly for the time being. Residents within the system's coverage area are 54% more likely to not subscribe to cable than the top 75 market average, Scarborough found.

One media buyer who asked for anonymity argued that cable penetration in Fresno is too low to buy spots on Comcast. The market's demographic, however, is great for automotive ads since most people who work in the agriculture business need transportation to get to and from their job sites as well as the trucks they use in their work. The growing clusters within the market also create a larger demand for cars, the buyer adds. "They're really growing population-wise. They are starting to get a lot more chain restaurants. The little mini- malls are going up and they are putting up more shopping centers."

This growth may help lure more national advertisers, especially since the area will be home to the next University of California campus, Comcast's Peters says. "We're sitting here in one of the hot growth spots in the country," he adds.

But to help bring more national ad buys into the fold, Comcast decided on a more proactive approach. The system hired a national sales manager just a few weeks ago, in fact. "We're just big enough to be small and just small enough to not be considered big," Peters says. "We're one of those markets right on the edge. It's just such a dynamic market that it needs the help that a national sales manager can bring."

The cable operator in Fresno can definitely take advantage of the area's strong Hispanic population, says Scott Barbee, Comcast's VP and GM for Fresno. "That's a huge area of focus for us as it is related to having the right products and services and operational plans," he says.

The cable system just launched four Hispanic digital packages, ranging from $9.95 for ten digital Spanish channels to $52.99 for the basic Spanish broadcast stations, Galavision, HBO and Starz Encore Latino multiplexes and digital music channels.