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Thursday, January 26, 2017

New American Reality: From Assimilation To Cross-Cultural Interdependency

Monday, May 16, 2016

Multicultural Marketing: No Longer an Option, But a Necessity

Multiculturalism and its impact on the U.S. marketing industry.

When the world woke up on December 21, 2010, many in the marketing and advertising world were faced with the realization that America's multicultural population was making a shift. This was the day when the U.S. Census conducted the first press conference titled The New Portrait Of America, which proudly announced that by 2050 the U.S. majority population would be represented by minorities. Fast forward two years later, the date was adjusted to 2044, and as of 2017 the shift is believed to arrive much earlier. The Census also confirmed that 38% of Americans are multicultural, 40 million are foreign-born and Hispanics represent 18% of the population.

After the initial hype died down, major ad agencies around the country returned to their comfort zone and continued along with business as usual. However, seeing the obvious potential, marketers (clients) had a different idea. Equipped with data that followed the U.S. Census 2010 release, they began building internal multicultural centers of excellence and hiring small and nimble multicultural agencies to reach Hispanic, African-American and Asian-American consumers. A few years later, the advertising giants caught on to the phenomenon and started shuffling around their business models. Today, most of the major multicultural players have either been acquired by the big guys or closed up shop, leaving less than a dozen independent agencies still in business.

While the multicultural market was booming, misunderstandings on how to market to the non-mainstream consumer had become widespread.

Total Market conundrum

In 2010, to help explain multicultural marketing, Jeff Bowman, former Ogilvy executive, introduced the term Total Market.

According to The Association of National Advertisers (ANA), Total Market is "a marketing approach followed by corporations with their trusted internal and external partners which proactively integrates diverse segment considerations. This is done from inception, through the entire strategic process and execution, with the goal of enhancing value and growth effectiveness. In marketing communications this could lead to either one fully integrated cross-cultural approach, individual segment approaches, or both in many cases, but always aligned under one overarching strategy."

In essence, it is an all-inclusive approach to marketing where multicultural consumer insights are included at the strategy formation stage--not up for consideration at a later stage of planning.

The idea of the Total Market was not new as many clients have discussed it internally and with their agencies in the past. According to ANA, 54% of U.S. marketers adapted this approach, including Walmart, McDonald's, Wells Fargo and Western Union. In practice, these brands were looking for common denominators that cross-over between White, Hispanic, African-American and Asian consumers and then used a variety of media vehicles to communicate the message, where necessary, with cultural nuances.

In-language creative

The obvious question is, if we are looking for common denominators, do cultural nuances matter? Moreover, does language in which we communicate matter?

At a time when 85% of Americans are English-proficient, marketers and agencies have been questioning whether it makes sense to communicate to ethnic groups in their native language. Are the more than 1,000 in-language U.S. media companies (across TV, print, radio and digital properties) necessary and should we rely more heavily on the English-language sources?

According to AdAge's Hispanic Fact there was $7.8B spent on Hispanic media in 2016, representing 5% of the total U.S. ad spend. Research shows that in-language media is, at least in the eyes of American advertisers, still an important vehicle to reach multicultural consumers.

When it comes to in-language messaging, Courtney Jones, VP of Multicultural Growth and Strategy at Nielsen, references Nielsen's recent study "The Bilingual Brain." Utilizing Nielsen's neuroscience technology, Nielsen, Univision and SMG Multicultural collaborated to study language preferences and their impact on advertising to bi-lingual millennials. According to the report, when comparing the neurological effectiveness of identical advertisements in both Spanish and English, the Spanish-version performed the same or better than its English counterpart. Of the eight ads tested, no English ad performed significantly better than the same ad in Spanish. Jones reveals that the results prove that bi-lingual millennials appreciate in-language messages, especially when a brand is trying to use emotion in advertisements.

Tide took a risk and went the extra mile with its Abuela campaign using both English and Spanish in the same commercial, which aired on CNN in 2013. Albeit controversial for the general audience, according to The Latino Rebels blog, the spot was well received by the Hispanic bi-lingual community.

Cross-cultural interdependency

The next stage in the multicultural evolution might be the idea of cross-cultural interdependency. Because most multicultural consumers do not live in isolation, new cultures are formed all the time. From fusion restaurants, such as Mexi Kosher in LA and NY, and new TV offerings to startups like DramaFever (owned by Warner Bros), who discovered that Hispanics represent a significant portion of their audience thus they created an online offering of Korean and Latino dramas with Spanish subtitles.

To provide additional support to their clients in the perishable food industry, Nielsen acquired Perishable Group , a division responsible for identifying new trends and tastes of the multicultural nation. According to Jones, as the nation's demographics change, tastes change as well.

For example, Nielsen has been working with one of its clients on studying pork belly, which has been a food staple in many Asian cultures. According to National Pork Board, pork belly has become very popular among chefs across America and is being seen as an upward trending product for the wider total market audience. The ability to predict wider trends with other products is what American fast-moving consumer good companies are looking for.

Nielsen and EthniFacts also developed Intercultural Affinity Segmentation model to help clients size the opportunity within various multicultural groups. One example in their research looked at a product's Hispanic size of the prize using traditional segmentation models and found that the growth potential was 15.5% of U.S. households. Using the intercultural affinity model and including adjacent consumers of other races and ethnicities, the potential grew to 42.5% of households.

Whether marketers are using SimmonsNielsenAudience M, or any other tool to determine their multicultural opportunity, one fact remains constant - America's diverse population will be playing a much more important role in the world of marketing and advertising.