The San Diego company is launching its campaign as a new study finds Hispanics second among U.S. ethnic groups, behind Asian Americans, in the percentage with access to the Internet. The Latin pitch also comes as new Spanish-language Internet portals are competing with Yahoo! Inc. (Nasdaq:YHOO) and America Online Inc. (NYSE:AOL).
"As we looked at this market and all the products and services we offer, it became a very significant market for us," says R. Todd Bradley, Gateway (NYSE:GTW) senior vice president. He estimates that PC purchases by Hispanics next year will be between 1.5 million and 2 million machines -- equivalent to the college-student market.
"Hispanics are very open to new technology and embrace technology," says
Ekaterina Walsh, an analyst at Forrester Research Inc. in Cambridge, Mass., who
surveyed 100,000 U.S. households. Forrester predicts that 43 percent of Hispanic
households will have access to the Internet next year, up from 36 percent currently.
The bulk of PC purchases by Hispanics are equally split among four
companies: Compaq Computer Corp. (NYSE:CPQ), Gateway, IBM Corp. (NYSE:IBM) and Apple Computer Inc. (Nasdaq:AAPL), says Walsh.
Investment growing The new TV ads, developed by Vidal, Reynardes & Moya, the Hispanic marketing
arm of Interpublic Group of Cos.'s McCann-Erickson, will begin in November on
the Univision and Telemundo television networks. The campaign also includes
local radio spots and product ads in Spanish-language newspapers.
The ads retain Gateway's folksiness while adding a strong dose of family
aspiration: One connects Gateway to a family's goal of encouraging a child who
aims to become a pilot. In another, a Latina uses a Gateway portable PC as the
narrator says, "Wherever your dreams take you, we're there."
The ads emphasize the company's Spanish-speaking sales and technical help and
each finish with the theme "Tomarlo Personal," which means taking it personal.
"The appeal in this market is no different from our mainstream market. Hispanics
want to educate their kids, want quality products that are well supported and
available in their language," says Bradley.
As part of its push, Gateway will sponsor the Tapas portion of Miami's
Hispanic Heritage celebration and hold small-scale fiestas at its Gateway
Country stores. The firm also plans to be involved in computer programs at
predominently Hispanic elementary schools in Phoenix and San Gabriel, Calif.
Tackling the language barrier A leasing program brings PC and Internet access to as low as $30 a month.
Initially, the PC bundles will include Spanish-language versions of Microsoft
Office or Microsoft Works plus five family-oriented pieces of software from
The Learning Co. Next year, Gateway is expected to add Spanish-language pages to its
Gateway.net Web portal site and links to Spanish-language portals.
The Hispanic campaign is a first not only for Gateway -- which doesn't yet
sell in Latin America -- but also for the PC industry. Dick Thomas, senior vice
president at Miami's Strategy Research Corp., a division of Market Facts Inc.,
says direct-sales companies such as Gateway are ideally suited to a Hispanic
initiative.
"Hispanics are one of the segments of the population that can be easily
identified by surnames for direct marketing," says Thomas. With an estimated
8.9 million U.S. Hispanic households, direct marketing is the least costly way
today to reach the group.
Gateway isn't the only high-tech company to recognize the potential of a
dedicated marketing campaign. Spanish-language portals, such as quepasa.com of
San Antonio and Yupi.com of Miami, have recently been joined by Argentina's
Elsitio.com and Starmedia.com, owned by New York's StarMedia Network Inc.
"What's happened in the Hispanic marketing industry in the past year is just
remarkable," says Dolores Kunda, president of Lapiz, the Hispanic marketing
division of Leo Burnett USA.
'As we looked at this market and all the products and services we offer, it
became a very significant market for us,'
-- R. Todd Bradley, Gateway senior vice president
Gateway's Bradley hopes to break out of the pack with a campaign targeting
Hispanic households and small businesses. The company is budgeting a relatively
modest $2.5 million for television and radio advertising campaigns between now
and December. But if the company achieves its goal of becoming the clear leader
in the segment, its spending on Hispanic marketing could rise to $25 million
next year, the company says.
The company plans to have bilingual staffers available on the phone and
Internet as well as at stores in San Diego, Los Angeles, San Francisco, Chicago,
Houston, San Antonio, Dallas and New York. By next year, some 500 bilingual
employees should be available, up from about 100 currently.
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