Section 4 - Case Studies
Tecate Campaign
JCPenney
Paragon Cable
Honda
House Foods

Lincoln Mercury
El Pollo Loco
La Opinion
Dinero Seguro
Harris Bank

 

Paragon Cable San Antonio

Foreword
Until the mid-to-late nineteen nineties (with the growth of "direct-to-home" satellite services), one might have assumed that cable television systems had no direct competition. In a broad sense, however, they do compete for dollars with many other forms of entertainment. One of the interesting aspects of this case was this realization and the incorporation of this competitive element in the creative strategy and executions, especially as it relates to the attribute of "value".

Most cable systems had reached the point of market penetration (70% and higher) where signing up new subscribers became difficult and costly. Since Hispanic cable penetrations generally ran anywhere from 10% to 25% below non-Hispanic subscription levels, many systems had come to recognize this market as an area of considerable opportunity. In some franchise areas, in fact, in order to grow, the majority of the new subscriptions had to come from Hispanic residents and/or other low-penetrated market segments.

Another interesting aspect of this campaign was that spots were created in both languages, airing on local Spanish and English-language TV stations in the market. The San Antonio DMA is over 50% Hispanic. The goal of this marketing effort was to cover the entire market, reaching non-Hispanics as well as Hispanics–be it in Spanish or in English.

Although this meant that not all of the new subscribers could be categorized as "Hispanics," based on the cable system’s analysis (of neighborhoods where the new "sign-ups" came from, of surnames and of the number of phone calls handled in Spanish), the majority of these new subscribers was, indeed, Hispanics.

Marketing Background
While the cable industry has flourished, Hispanic subscription rates have not kept pace. One reason for the disparity has been the issue of perceived value of cable service. A common Hispanic reaction is, "Why should I get cable if I can watch free TV?" Two Hispanic consumer misperceptions identified by Cartel Creativo were that…

There were few added offerings (or, at least, few worthwhile offerings) over and above what one could currently watch on "over-the-air" channels. Having never subscribed to cable, many Hispanics had limited knowledge of what programming services the local system carried.

It was perceived as a luxury. A cable subscription was expensive. As mentioned, many had no firsthand cable subscription experience. It was not unusual for these Hispanics to estimate a subscription in the $30 or higher range.

In spite of these misconceptions, one enduring fact stood out – Hispanics love television. As documented by Nielsen ratings, Hispanic households spend significantly more time using television each day. And, with larger households (and as supported by a number of other research sources), they spend disproportionate dollars on entertainment. In addition, Hispanics are attuned to learning about new, family-oriented entertainment vehicles. One of the enduring objectives had to be to change their negative perceptions, in a nice, friendly way.

Based on this information, Cartel Creativo created an acquisition campaign for Paragon Cable of San Antonio. It was decided to kick off this campaign in July, historically a slow cable acquisition period.

Tracking and Measurement
Paragon Cable has the ability to accurately measure the results of their advertising campaigns by utilizing "campaign codes" for each new campaign. As consumers call in, give the appropriate code and order cable service, Paragon is quickly able to assess effectiveness of each new advertising/marketing effort.

A new cable client is not "tallied" until after service has been installed in the customer's place of residence.

PARAGON CABLE AD BRIEF

Overview
According to SMRB (Simmons Marketing Research Bureau), national cable penetration stood at around 70% for the general market, at 47% for Hispanics. In San Antonio, low penetrated areas were identified in the south, east and west sides of the market. Paragon saw tremendous market potential in these (largely Hispanic) areas.

Non-subscribers fall into two general categories: former subscribers (including many who sign-up and cancel periodically) and non-subscribers who have never had cable. This latter segment dominated in these identified neighborhoods/areas, and was the segment specifically targeted for this advertising effort. For Paragon Cable–in terms of expanding their customer base–this segment represented a significant opportunity for growth.

First-time subscription is a big step for the consumer. Pushing someone to take that step required a compelling, informative and logical approach. There was "inertia" to overcome, and in a sense, a form of complacency. On the other hand, the experience of the system and the agency suggested that, although these prospects may kick, scream, scratch and bite before subscribing, once "converted", once exposed to the variety of programming services (and the inherent value), they would just as passionately maintain that subscription.

Communication Strategy
The principal misconception advertising had to overcome was lack of perceived value.

The benefits advertising had to communicate?

When competitive factors were weighed, other forms of entertainment were more expensive. Cable was affordable, personal innovative, even inspiring. It could expand your world.

The goal was to communicate that:

Cable was not an unattainable luxury,

As a form of entertainment, it represented an excellent value,

And, in fact, Paragon Cable was the best source of entertainment in town.

The aim was to drive the consumer to consider Paragon Cable, to come to the realization that, the combination of programming offerings and low price (value) represented something very special ....something they had been missing out on. The existing mindset ("I can watch my favorite programs just fine with my antenna; and besides, cable is too expensive") needed to be attacked. This issue of inertia/complacency was key. The communication needed to be compelling enough to get them to act.

Campaign Objectives
A specific objective was defined at the outset. This objective: To increase the number of Paragon Cable subscribers by 3,500 homes in July 1997 and 3,500 more homes in August. A secondary goal was to retain these new customers "forever".... to make them "cable addicts".

Target Audience

Adults (with a female skew) in households with at least $24,000 annual income

Primary demographic: 25-34 years of age

Secondary demographic: 30-54 years of age

Media
The logical vehicle for reaching potential cable subscribers was local television. Spanish and English versions of the spots were created, airing on both Spanish and English-language stations in San Antonio. The spots ran during July and August, with "heavy" media weight. Direct mail supported the TV. Orders were handled by customer representatives who answered in both Spanish and English.

Creative Execution
The advertising needed to be bold, arresting-enough to affect behavioral change (to overcome this element of complacency), while sticking to "the basics". Importantly, to ensure memorability and the ability to cut through "clutter," spots had to avoid being dull and boring. A lighthearted comedic approach was used to show the absurdity of not having cable. The message: "Get it!" (Get hip/get cable). In Spanish, "Conéctate"! (Get connected/get connected to cable).

Commercials built their foundation around three basic themes:

The great value of cable

Better reception

Great programming

The first spots (airing in July) especially emphasized the $12 introductory rate.

Key copy points were:

Basic Cable is available for only $12 a month.

Nobody should be/need be without cable.

No more excuses.

Nobody should be watching a fuzzy picture.

You’re missing out on a lot. Without cable, you’re the equivalent of a "nerd".

 

Results
New "connects" for July exceeded the 3,500 goal by +213%. They surpassed the previous July total by +57%. And, in spite of the focus on the low cost basic service package, most of these new customers opted for more: Two-thirds included one or more premium services in their subscription (HBO, Showtime, Cinemax, Disney, etc.)

Interestingly, the campaign from the prior July featured a premium package offer (while this new one featured the basic package), yet the number and proportion signing up for premium service in this new campaign exceeded the year-ago numbers.

Results for the August campaign were similarly successful. The goal of 3,500 new subscribers was exceeded by +203%. It represented a +405% increased compared to the prior August … and, again the number opting for premium service far exceeded the prior August total.

Paragon was extremely happy with these results. To quote Paragon’s marketing director at the time:

"This is one of our most successful acquisition campaigns ever. We have nearly achieved year-end goal and it’s only September! Much of this growth is attributable to the strategic campaign Cartel Creativo created which ran in the months of July and August; two months that have been historically low in new connects."


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© 2002 Isabel Valdés - To contact the author, email: isabel@isabelvaldes.com or call (650) 322-1922
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