At least that's what AG Interactive, a new-media subsidiary of American Greetings Corp., is betting in a joint venture with Spanish-language TV, radio and music giant Univision to market mobile products to Hispanics, the first segment that wireless division AGmobile is entering. In mid-October the African-American market will follow in a deal with hip-hop impresario Russell Simmons.
"Hispanics and African-Americans over-index in use of data products, purchase of the latest cellphones, and average revenue per user is approximately 10% higher," said Nicholas Montes, who joined AGmobile a month ago as VP-marketing from Verizon Wireless, where he was associate director-multicultural marketing.
This week an ad blitz breaks on Univision's three TV networks. Spots created in-house will run on Univision, Telefutura and cable channel Galavision until year end. They will promote the different applications Univision Movil is selling: ring tones running the gamut from Norte¤o music to novela theme songs, wallpaper images of celebrities, e-greeting cards, news from Univision Online and a Copa Univision soccer game.
What America looks like
Next month, similar products targeted at African-Americans will be introduced under the brand Def Jam Mobile, Mr. Montes said. Products could include music such as a syncopated rap beat and scratch, and games like dominoes and Cleo, a hip-hop card game played on the streets. "In the mobile market, not all customers were created equal," he said. "You need to have multiple brands to support what America really looks like."
Univision Movil's prices, charged on the user's cellphone bill, range from $1.99 to download a ring tone to $4.99 to download as much music as you want for a month. A one-time download of the Copa Univision game costs $3.99. Revenue will be split among AGmobile, Univision and the cellphone company. Mr. Montes said Verizon is already a strategic partner and that he expects the other major carriers to be signed up by the end of the year.
Mr. Montes referred to a study by Forrester Research that found Hispanics and African-Americans are more likely to buy services, like downloading ring tones and picture messaging, that generate additional revenue for operators. For instance, Hispanic households spend an average of $54.65 per month on mobile phones, compared to $49.72 for non-Hispanic white households. And 20% of blacks and 12% of Hispanics use wireless data services, compared with only 7% of white respondents. Forrester's findings were based on a mail survey of 54,817 U.S. homes.
Forrester also reported that while 9.9% of all mobile households are African-American and 6.6% are Hispanic, they are not evenly divided among cellphone operators. Sprint and T-Mobile had the highest number of African-American households, accounting for more than 14% of those operators' customer base, while Nextel was the lowest at 6.7%. Similarly about 8% of Sprint, T-Mobile and Cingular's customers are Hispanic, with a high of 8.8% at Sprint.