January 2008 - Channel Crossing: U.S. Hispanic

U.S. Hispanic Market: DRTV’s Final Frontier

By Steven Daerr

If you’ve been in the business for more than 15 years, I’m sure you often reminisce about the good old days. If you haven’t been in the business long enough, I’m sure you’ve heard those who have speak nostalgically about that bygone era-the days when direct response advertisers could air on major cable networks and generate $2 and $3 CPOs, in long form, with high-ticketed products. The days when national cable airings could deliver 100 percent ROIs or better. Success on the front-end was easy and it seemed the world was our oyster. But as the old timers will tell you, “those days are over.” Or, are they?

There now seems to be at least one glimmer of hope, one last remaining vestige that has emerged in the last several years that’s caused many to stop and consider the possibility that the good old days may be here again. I’m referring to the U.S. Hispanic market and advertising via direct response on Spanish stations and cable networks. Are the days of great ROIs possible again? The answer is yes, and not only is it possible, it’s being achieved!

One year ago, we made a commitment to introduce several of our existing products to the Hispanic market via DRTV. Today, we have shows ranking in the top 5 on IMS (Spanish), and we are enjoying low media rates with targeted results and weekly ROIs reminiscent of yesteryear. The Hispanic DR market is relatively untapped and U.S. Spanish television seems to be a channel of distribution that is still very much in its infancy stage. Hispanics constitute the largest minority group in the U.S. Their purchasing power is unquestioned. It currently exceeds $700 billion and is expected to grow to $1 trillion by 2008.

As with all DRTV, there are challenges to achieving success. A major issue, in the past, with marketing to the Hispanic consumer was low sales conversions to calls due to the fact that the Hispanic consumer did not have credit cards and COD options offered as an alternative purchasing method were usually a breakeven proposition at best. Today, more Hispanic Americans use credit cards than ever before. Call-to-order conversions may still range roughly 20 to 30 percent lower with Hispanic consumers, but with strategic upsell positioning and load-ups, you can achieve higher upsell percentages, and thus, run higher breakevens than with your Anglo campaigns. In addition, companies now specialize in integrating COD programs into your Spanish campaigns. Leads captured from non-converted calls can be converted to COD through aggressive outbound telemarketing, adding, on average, 10 to 15 percent to your breakeven.

The costs to enter the market are reasonable. Translation costs are roughly $5,000 and for as little as $5,000 to $10,000, a campaign can be tested effectively on both a local and national basis. Weekly media budgets, after rollout, can potentially exceed $50,000. CPOs are substantially lower than that of an Anglo campaign and with the potential for phenomenal ROIs, it’s-if nothing else-certainly worth exploring.

Steven Daerr is media director at Sylmark Ideal Media, LLC. He can be reached at (323) 938-9200, x1543, or via e-mail at [email protected].


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