For the most part, MSOs have grown broadband with a one-size-fits-all message of higher connection speeds. But that’s about to change. Cable operators looking for new areas of growth for broadband, phone and other products are spending more time crafting marketing messages that resonate with specific consumer segments, such as seniors and Hispanics. In many cases such targeted marketing now supplements bigger and broader branding campaigns. Last year, Cox Arizona VP of marketing Tony Maldonado saw a rise in the purchase of high-speed Internet by Cox customers in Spanish-speaking homes. These homes had seen broadband growth rates begin to outpace video and telephone (video and telephone have a far larger installed base), even though Cox had not specifically marketed broadband to that audience. "By the end of 2004, we finally said this market is now ready for [broadband], so we’re devoting more time to marketing that product to Spanish-language customers," says Maldonado. At this point, campaigns targeting the Hispanic segment are far more prevalent than campaigns aimed at seniors. "For the older user I would say there is a lot more that ISPs can be doing," says Joe Laszlo, senior analyst at Jupiter Research. "They haven’t generally been a conscious target of ISP marketing efforts." That also may be changing, if slowly. The Marketing Power of Seniors Jupiter Research expects older Americans will be one of the fastest-growing broadband segments over the next four years. By 2010, Jupiter forecasts 20 million seniors will use broadband, up from 10 million today. But they don’t have a lot of advertising targeted to them. "We have not targeted [the senior segment] thus far," Maldonado says. But he concedes it’s an obvious opportunity. Cox Arizona soon will test direct mail pieces that will speak specifically to seniors. Right now about 36 billion Americans are over 65. But 51 billion people are in prime Baby Boom years—45 to 59, according to Census 2000. Further, Americans are living longer, says Cohorts president and CEO Scott Schroeder. That means a longer span of monthly revenue for marketers. Seniors have maintained loyalty to service providers more than other groups in the face of increasing competition—a fact that could be a boon for cable marketers as they introduce products. "You’ve counted on your cable provider for this service, now we can also give you service X and Y. That’s a message that resonates well," Schroeder says. It’s important not to fall into the trap of marketing to seniors as if they are one homogenous group. Cohorts identifies four distinct consumer segments among adults 65-plus (and as many as 13 different segments within the Baby Boomer category) such as mature couples, modest-income grandparents and fixed-income grandmothers. In New York City, the mature consumer is savvy and not as afraid of technology, Time Warner Cable marketing VP David Goldberg says. That means there’s not as much of a need to highlight a service’s simplicity as there may be in other systems. Pricing is a huge factor for fixed-income segments. Seniors are especially sensitive to price increases, making value a motivating factor for this group. It also helps to get the message seen in the right places. For older customers, Time Warner Cable of New York City sends direct mail pieces touting channels that may appeal to them, including networks that highlight travel, finance and investing. It seems obvious, but another way to reach the senior group is to advertise on shows that skew to the 55-plus demographic, as the system did for a recent high-speed data campaign, Goldberg says. The Right Message "It’s all about sending the right message to the right household," says Pamela Euler Halling, Insight’s SVP, marketing and programming. The MSO is complementing its overall branding "simple is better" campaign with a specific market segmentation strategy from marketing specialists Cohorts. "Through their household-level information we’re able to pinpoint with more confidence the senior segment or the Hispanic segment or young adult households with children." Insight’s customer base in the Midwest skews a bit older than the general population. In Ohio, for example, 13.3% of the population is 65 and over, according to Census 2000, compared with 12.4% for the United States overall. Just by changing the wording and photos on direct mail pieces targeted to the older population, sometimes called Zoomers, Insight developed messages that resonate with seniors, such as highlighting the Internet’s abilities to send and receive photos of grandkids. Laying the Groundwork for Hispanic Marketing in Arizona Cox Arizona has had full-time Hispanic video marketing in place for five years. It’s also had full-time Hispanic marketing efforts for phone set up for three. "We do not approach the Latino segment in terms of running a campaign now and again," Maldonado says. Rather, his system’s goal is to have its Spanish-speaking customers feel at ease with their cable operator. That means a start-to-finish customer experience in their native language. Spanish-speaking CSRs are available 24/7. Since early 2004, the system has been sending bills in Spanish. And field techs are typically bilingual. The pace of growth of personal computers in Spanish-speaking homes has been outpacing the general market lately, due to the lower base and the higher numbers of homes in the general market that have computers. In Arizona, Spanish-speaking homes were taking high-speed data service, even though it wasn’t being marketed specifically to them. In 2004, while the system sold more video and more phone, the largest year-over-year increases were in the high-speed data product. Cox is at the point where it is test-marketing high-speed data. A bilingual test campaign started last month and will run through August. Overall the system increased customer penetration in Spanish language homes in 2004 by about 1.2%—a significant number given that it’s a new market segment. "The bundle is a very effective tool against Spanish-language households as well as the general market," Maldonado says. Across the country, in New York City, about 27% of the population identified itself as being of Hispanic origin in Census 2000. Whereas the vast majority of the Arizona Hispanic population—some 80% to 85%—is Mexican, in New York, Puerto Rican and Dominican heritages dominate. To boost its digital phone penetration among those segments, Time Warner Cable set up a broad marketing campaign that included broadcast, outdoor, radio, newspaper and one medium where it knew it had a captive audience with plenty of time: the subway. "In a city like New York, it’s so cluttered with advertising we have to really do as much as we can to get our message out there," says Time Warner Cable creative director Therese Berkowitz. Despite its cost, Berkowitz says broadcast is the most effective medium to reach the Hispanic market, since most of the varied population is part of the mainstream. "When we do broadcast for the mainstream market we see a lift in all areas," she says. Still, the system has the ability to target down to the ZIP code level and makes use of that capability in direct mail and direct sales efforts that overlay broader branding and product messages. In the telecom sector in general and in cable, in particular, there’s typically been a mind-set to market to everyone in the system’s footprint. Although that is still the case, cable marketers are starting to get smarter about understanding specific segments. "They’re trying to understand how is the senior consumer different from the other younger different kind of demographic base segments that they’re also marketing to," says Cohorts’ Schroeder. "They’re talking in their language, if you will." They have to. With DirecTV, EchoStar and, soon, telcos, nipping at their heels, "there is more urgency," Insight’s Euler Halling says. "We realized that some of the strategies that DirecTV and Dish have employed have really been very effective for them. We are now starting to break out our audience base perhaps a little further than we have before."

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