Stacy Crespo, manager of biz development and strategic marketing, shares some strategies for reaching the urban and U.S. Hispanic markets.

Editor's note: This case study presentation was recorded at the iMedia Summit in Florida in May.

Rebecca Weeks: Good morning, I am Rebecca Weeks. I am the content director of iMedia Summits. This morning we have heard from thought leaders speaking about how interactive is leading all forms of media to be held more accountable. And, now we are going to get a little bit more granular as Stacy Crespo teaches us how to target specific demographics to reach our consumer ROI goals.

Erin Patton (president of The Mastermind Group): Stacy is manager of business development and strategic marketing for Motorola's iDEN Subscriber service, which is the Nextel/Sprint combination now. But, forget all of that. The reason she's cool is because she goes to the Hamptons every year with Russell Simmons, and like hangs out with all the really cool people. And, on a serious note, she really has been the person at Motorola who has been able to take that product and that brand and place it in the urban market in a way that has really been impactful and helped to drive sales, and at the same time build a brand. And, so she deserves a great deal of credit for pulling together a humongous partnership, which she will now talk to you about. Stacy Crespo.

Stacy Crespo: Thank you so much.

First of all, I think it is really important to talk a little bit about our division. Motorola, as you might realize, is a huge, mammoth of a company. The division I work for, iDEN, is a smaller division. iDEN stands for integrated Digital Enhanced Network, and that is the technology that supports a cell phone to do cell phone calls, as well as that Direct Connect -- that little chirp that you guys are all so familiar with and probably call the Nextel phone. So, that is the difference.

We started this division in '92, and we are lucky enough to be located in Southern Florida and not in the Chicagoland area. We are doing really well, and as most of you know there is an upcoming merger with Sprint and Nextel, if everything goes well with the FCC this September. So, it's a win/win for Motorola because, you know, we manufacture the product, so more business for us. And, with Boost Mobile as our pre-paid customer, and post-paid with Nextel, right now it's about a 17-million subscriber base.

Now, the objective that we used in our multicultural strategy was to take advantage of the brand loyalty, because we realized we had a huge brand loyalty and brand equity in niche markets. So, we looked at our brands like the Swiss Armies of the world and, you know, created some new and different products. Maybe some of you saw the red Swiss Army phone? One of the markets that I was tasked with looking at was the urban space, and I will talk about that. But, another thing we realized was, Nextel was so focused on B2B, we realized that there was definitely unused network for weekends and evenings. We weren't really focusing on consumers too much -- we were doing so well on B2B. So we thought, why not use some time, and you know, innovative resources to look at this and expand our portfolio, and look at some new channel strategies? So, this is what we did.

In looking at this market analysis … I think this was a great comment here: "Urban markets are not impenetrable markets in need of penetration, but sites of tremendous growth and opportunity." They are buying our product. As an advertiser/manufacturer, it is our responsibility to go out and see what we can do to attract these new customers. And, on a macro level, again, it is not so much about black, white, yellow, green -- it is everything. It is geographic. It is the mindset. These consumers, they use phones. They are on the phones. And, they are replacing phones at a more regular pace than your average consumer, which is obviously very attractive for us.

Okay, now this is a strategy we took. When looking at the urban youth, versus the Hispanic, the difference here … obviously, we wanted to make sure that for the U.S. Hispanic market, Spanish language was key. But, for urban youth, we wanted to actually create a handset specific to this market, and fully integrate it. Not just a faceplate. We realized individuality was key. So, we wanted to look at creating the hardware and software to be fully integrated, and we wanted to partner with somebody that already was really strong and respected in that marketplace that could help us enter into this marketplace and give us that credibility; but also a way to promote it. So we needed somebody who has the credibility and respect to get us the promotion in media, online and offline. That was a really difficult task. 

Fashion was also key, because we wanted to position it not only as a feature-rich communication device, but also as a fashion accessory, because when you think of it, people use it all the time, and the highest end, the slickest … look at the RAZR nowadays.  Everybody wants the RAZR because it is so thin, and hot, and so, you know, we wanted to get to that level, and all roads led to Russell Simmons. 

I talked to folks like P. Diddy, who else? A lot of other brands that are top of mind, top ten urban brands. But Russell Simmons had his hands in so many different buckets -- the music and fashion markets, as the godfather of hip hop, and as a huge Motorola fan. He was always on the phone. So, it was very credible that he was supporting our product, because once again, we were marrying our brands, so it had to be credible. And, another thing was really important. We had to find a brand that enhanced and complimented our brand. We didn't want a brand that exactly mirrored our brand, because then what value would it offer? So, Russell at that time was celebrating the company's 10-year anniversary, so they were already doing lots and lots of promotion, so we could piggyback on what they were doing and it definitely proved to be successful.

And, on top of it, the channel strategy was very attractive. We were able to sell the phones through their flagship stores in New York, on their websites, and we did quite a bit of email blasts.

These are the products. Hopefully, you have seen some of these. The distribution channels, like I said, you know, Phat Farm channels, they are proprietary channels, but then, the second … in 2003, we were at Magic promoting the phone, and we were actually planning on doing it again, primarily in Baby Phat channels, and the Magic Show. If you are not familiar with it, it's the Vegas show where they showcase all the apparel, and the first day of the show, that Monday, it was on the front page of the Women's Wear Daily -- a deal that Kimora did, Kimora Lee Simmons, Russell Simmon's wife did with the editor. And, Bloomingdales called us and said, "We have got to have that phone." So, luckily enough, you know, with all of the press we got on that, we ended up being nominated for an ACE Award. And, that award is interesting -- we didn't win it, but we were up against a Manolo Blahnik shoe and a purse -- first time ever for a cell phone, so that's a pretty big deal.

And, then our third phone was the second addition of a Phat Farm phone. And, as you see, the units went up each time. So, the business model was to start slow and as we found the bigger channels … that was the third product which did go through Nextel. Because Nextel, you know, they had to warm up to it, because they were B2B, so they wanted to see if it was working. And, then they bought into it. 

And, now the current phone that is out in the market -- the Diamond phone -- hopefully you have seen it, and not through that email blast that says you win a free Diamond phone, that is illegitimate. It is doing really well. We are selling it now through TELUS in Canada, and in Bloomingdales, and shortly it will be pre-paid -- over the summer -- so, it is doing quite well -- the ROI on the whole program has been 10 to one.

And, here is editorial. Again this is editorial, because what we have tried to do is make this as organic as possible. These are ads, or editorial, that Baby Phat has done. Motorola has done none of this. You know, this is based on relationships.

This is a fashion show, New York fashion week, where they organically place it on the models as a fashion accessory. And, now you are beginning to see a lot more of our competitors doing things like this. And, here it is, again, the integration online. Where they are selling it, and the ad … this is an ad that is part of their media buy in which they included the creative on the website. 

Okay, now moving on to the U.S. Hispanic market initiative we have done over the past few years. This is a hard egg to crack, just because the Hispanic population is so diverse. I want to break down the population a bit to give you an idea. So, if in fact, we wanted to do something, you know, Cuban focused for Miami, then maybe we would upset the Mexicans over on the West Coast, so it is a really difficult thing to do. So, what we tried to do is identify some commonality. What we came up with are these three buckets that kind of cover all Hispanics -- Family/Culture, Music and Sports. This is the marketing mix that I came up with, and as you see interactive media is pretty much our foundation. And, here, unlike with the case study that you saw with Phat Farm where we used interactive as a distribution channel, here we are actually using it for advertising brand awareness.

Yahoo en Espanol!, in this case, has been our partner of choice up until now. You will see how it has just been really a great partnership. That is how I like to think of it, because we do not use an agency. This is all client direct, and they have just been really willing to go the extra mile with us. As they launched Launch.com, for example, they were the first ones to call us and work with us. 

What I have also tried to do is to overlap -- like World Cup, or let me give you an example: In 2003, Telemundo was doing "The Bachelorette," and the voting was done on Yahoo en Espanol!. So, again, traffic is driven from offline to online, so constantly layering and supporting one thing after another. Hispanic Heritage Month. Constantly trying to, you know, show the continuity that way, which I think is very important as more of you begin to do that.

And, here are our results. I'll give you a little bit of background: Nextel, our main service provider, had not done any marketing initiatives in this space until last year. So, over the last few years, as you note in the bio, their gross ads went up quite a bit. And, just, this data -- this statistic is just Q1. So, this is huge for Nextel. This is pretty remarkable. Again, considering it is a B2B business. And, our CPMs -- which are pretty much what we use as a measurement -- again, a pretty significant milestone. And, this year, they have decided to begin working together with us. So, it is going to be more like the traditional co-op marketing. And, maybe many of you have seen the Nextel Ya campaign that is out. We are excited about that. Obviously we understand that it was more of like a pilot project that we needed to prove that it would work and then they would come on board, so it is a great compliment that now they are on board and will support the efforts.

Okay, so just some words of wisdom, having done this for several years. This morning, we were talking about these boxes, thinking out of the box. I actually think we need to just stop this "in and out of the box" talk. You just have got to create a new one. You know, the U.S. Hispanic market really does require some new and unique messaging, and maybe, messaging done by somebody with a unique intuition of, and respect for the community, like someone with my background, because that is really important. 

And then, identify short lists of key partners that have those mutual goals and objectives, because that way, I think the partnerships and alliances really work better. It is more of a strategic partnership and less of clients and ad buys and things like that. I think you will get your goals and objectives met more effectively, than not.

And, this I think is so key. If nothing else, you guys walk away with this: When you call a cell phone, you get a person. When you call a landline, you get a building, or a place. Moving forward, cell phones are going to be the new real estate for advertisers. We are seeing that now with text messaging and things like that. And, I think advertisers are starting to get that, but the ones who have risked it and taken advantage of it, they have definitely seen a lot of success. 

And, then, content is king. I don't think a lot of people realize how you can pre-load content versus downloading. So, as a manufacturer, we preload the Java games, and things like that. The Java games could come with some product integration for advertisers, that kind of thing. And, you know, with the Baby Phat and Phat Farm handsets, Kimora Lee Simmons had a .wav file with her voice on it that was preloaded. So, every phone had that .wav file on it. So, there are a lot of different ways you are able to use that different content. I guess that is it. Hopefully, it was useful. If anybody has any questions, I'll be around.

(Applause)

Weeks: Those are some impressive results. Thank you, Stacy. Thank you.