When Targeting Multicultural Audiences

Doing It Wrong Is Worse Than Not Doing It at All
When it comes to making ads relevant for multicultural audiences, doing it wrong is worse than not doing it all.

A new study from OMD Worldwide found that ethnic groups are turned off by ads that rely on stereotypes and caricatures rather than meaningful cultural cues. "The respondents were saying, 'We want to see ourselves represented in ads, but not in a stereotypical matter,'" said Pamela Marsh, group director-primary research and insights at the Omnicom media agency.

Multicultural Consumer behavior
The OMD study, a telephone survey of 1,453 respondents 18 and older, sought to understand how ethnicity affects consumer behavior and advertising receptivity. Four different groups were represented: blacks, Asian-Americans, Hispanics and the general market (which was about 76% Caucasian in the study).

The ethnic groups agreed that messages should be culturally relevant, but they responded more positively to ads with multicultural cues, such as ethnic characters, phrases, expressions and values, than ads that were simply translations of general-market ads. "Ad relevancy is more about communicating in kind than speaking in a language," Ms. Marsh said. Cultural relevance is also important for media placement, the study said, noting that ad models created on the basis of general population statistics, such as channel planning, are likely to fall short if they do not take relevant ethnic differences into account.

How to Reach Multicultural Segments
Though all segments in the survey gravitated toward the same top four media -- TV, radio, internet and mobile -- different ethnic groups spent different amounts of time with each of them. Blacks, for instance, spent the most time with TV; Hispanics spent more time with radio; and Asians used the internet at significantly higher rates.

The study also found that black consumers place a higher premium on word-of-mouth information before making buying decisions -- particularly when seeking feedback about a product. Asian-Americans also rely heavily on word-of-mouth because they are less receptive to ads than other segments of the population, according to the study.

Marketers have a significant opportunity to influence the purchases of blacks and Hispanics, the study said, because they are more open to advertising than other groups but feel as though most marketing messages are not relevant to them.

U.S. Evolving Buying Power Markets

In prior decades, researchers primarily defined the population by age group. This worked well because of our rather homogeneous society. Today, America is evolving into a more balanced melting pot of people from different backgrounds with varied lifestyles and preferences.

How does this change affect how we define and examine our population? We have to view it through different filters called buying power markets. A buying power market is a homogeneous group of people who have increasingly defined needs and demands along with broadening purchasing power. To qualify, a group must be large enough to attract the attention of marketers, retailers and advertisers. This type of market does not stand alone; it often has influence over or within other markets. This overlap becomes apparent in the following descriptions.

Women
Women (females over age 18), the largest of today’s buying power markets, spans every generation from the matures to the echo boomers. It also crosses ethnic and sexual preference groups. Why pay so much attention to women as a whole? Because, although this group makes less than one-half of all household income, it influences over 80 percent of dollars spent. This adds up to a hefty $3.4 trillion per year. Women make more decisions than men do about cars, tires, financial services and personal computers. As buyers, they pay more than men and are less likely to haggle over price.

What future changes do we see for this market? Over the next 10 years, the percentage of women who work is expected to increase by 16 percent, while the number of working men will increase only eight percent. Women currently make up 45 percent of the total workforce; 62 percent work at least part time.

Ethnic Markets
We have three major buying power markets – black, Asian, Hispanic – emerging within our ethnic population. Today, one in four Americans is considered a minority, up from one in five during 1980. At current growth levels, 47 percent of our population will be what has traditionally been termed a minority by the year 2050.

America’s black population, currently at 34 million (12.6 percent of Americans), wields $500 billion of purchasing power. This market grew by 13 percent in the last decade. While the average household income is $14,000, households with annual incomes above $60,000 are the fastest growing income segment.

Hispanics’ purchasing power stands at $350 billion. There are currently 30 million Hispanics, 11 percent of our population. Their presence in the workforce is expected to increase 36 percent in the next 10 years compared to an increase in the national workforce of only 12 percent.

The Asian population, currently less than four percent of Americans, has doubled since 1980. These 10 million people have $150 billion purchasing power and are the fastest growing, most diverse and most affluent minority group. Their median household income is $36,000.

To attract the attention of these ethnic groups, throw out the traditional five P’s of marketing (product, price, promotion, placement and profit) and concentrate on passion, preparation, perseverance, recognition, relevance, respect and relationships.

Gay/Lesbian/Bisexual/Transsexual (GLBT) Market
America also has an emerging GLBT market that currently comprises seven percent of our population. This market is geographically concentrated with lesbians choosing to live in the suburbs and males favoring the inner-city life. These well-educated individuals boast high levels of disposable income ($200 - $400 billion) and travel frequently, both domestically and abroad.

People in this market tend to support and elect each other. While afraid of being called different, this market is proud of its uniqueness in signs, symbols and fashion. In fact, this market is often a trend setter in terms of fashion, visual arts, literature, home style, healthcare access and entertainment.

An increasing propensity for Americans to accept these individuals into the mainstream has made it easier to identify and reach this affluent and influential market.

Effects on Research
How is the emergence and evolution of these buying power markets affecting market research? Several ways—since mainstream research now considers and researches these markets as a valuable piece of the big puzzle.

The segmentation process is more complex because research results are stratified in more ways than before. You no longer rely on gender or household income delineations alone. Now, a typical stratification looks more like “women in upscale families with teenagers” or “economically challenged Asian urban families.” It is critical that we explore statistical correlations according to complex clusters.

Research tools must have more demographic categories today. For example, a person may be several races; people living in a household may not be related. Therefore, questionnaires should be designed to handle these cases.

We must explore larger samples. This is especially true in larger metropolitan markets where you must complete enough surveys (often through oversampling procedures) to permit statistical analysis of smaller or more complex subgroups. For example, your sample must be large enough to collect and compare information on wealthy women who are white, Hispanic or black all living within one geographic area.

Recognizing and reacting to change is essential for success. As the American population changes, so must our emphasis on and evaluation of key buying power markets.