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Multicultural consumers comprise almost 40 percent of the total U.S. population, yet multicultural media investments make up only 5.2 percent of total advertising and marketing spending, according to a new study by PQ Media on behalf of the ANA’s Alliance for Inclusive and Multicultural Marketing (AIMM).
The study revealed that overall multicultural advertising and marketing spending totaled $25.9 billion in 2018. Spending targeting Hispanics totaled almost $18 billion, a 5.3 percent increase over the previous year and far ahead of the spend aimed at African-Americans ($7.2 billion, up 6.1 percent) or Asian-Americans ($722 million, up 7 percent). According to 2017 U.S. Census Bureau figures, Hispanics comprise 18.1 percent of the overall population, while African-Americans make up 13.4 percent and Asians 5.8 percent.
“This is a landmark study that clearly shows most companies are missing an opportunity by not focusing more of their marketing efforts on multicultural consumers,” said ANA CEO Bob Liodice in a statement. “The report reveals an opening for new ways to drive growth and offers a roadmap for how advertisers can compete more effectively.”
Key findings from the study were as follows:
“Multicultural media is an important concept for brands to embrace if they want to increase market share,” said PQ Media CEO Patrick Quinn, also in a statement. “Multicultural customers — African-Americans, Asian-Americans, and Hispanic-Americans — are the fastest growing demographic, but they are under-represented in media buying. Brands need to shift away from bland, generic total market messaging and concentrate on delivering culturally relevant copy in media that are being seen by multicultural audiences.”
—Television was the largest of the 12 multicultural media platforms tracked in the study, representing $7.67 billion in multicultural ad spending in 2018.
—Brand activation marketing accounted for a 49.5 percent share of multicultural media in 2018, almost 20 percent lower than the share of brand activation in overall media revenues.
—“Endemic” media buying accounted for 69 percent of revenue; “non-endemic” accounted for 31 percent. AIMM and PQ Media defined endemic media as those that generate an audience composition of a specific segment at 75 percent or above.
—National media buying in 2018 accounted for 62.5 percent of investment, but local spending grew faster, rising 6.2 percent compared to 2017.
—Multicultural advertising and marketing spending is on pace to rise 4.5 percent in 2019 to slightly more than $27 billion and is projected to increase 6.3 percent in 2020 to $28.7 billion.
As a result of the study, AIMM identified a few implications:
—There is a clear opportunity for marketers to engage multicultural consumers to drive business growth.
—Although 100 percent of total population growth in the U.S. is due to growth among multicultural segments, marketers are significantly underspending to reach these segments.
—Marketers have an opportunity to leverage digital advertising to reach multicultural consumers.
—Marketers should broaden their reach to appeal to both general market and multicultural audiences.
PQ Media tracked six advertising platforms: digital media (pure play), out-of-home, print, radio, television and other advertising (B2B mags, directories, and entertainment media). It also tracked six brand activation marketing platforms: branded & content, experiential, influencer, promotions, relationship, and retailer marketing.