Tuesday, August 30, 2011

Black Buying Power: Watch Where You Spend Your Money


Most big advertisers don’t respect the African American consumer

By David Alexander, Special to the NNPA from Our Weekly –

How much do most big corporate advertisers respect the African American consumer—25 percent, 15 percent, 5 percent, or one percent?

If you guessed one percent you were wrong. It’s less than that—.68 percent, to be exact.


Of the $263.7 billion spent annually on advertising within the nation, less that one percent is used to target African American consumers, despite the fact that Black buying power is estimated at around $857 billion, according to the 2010 census.

Ken Smikle of Target Market News notes that “the largest single investment corporate America makes is advertising,” but only a trickle is spent targeting African American consumers, a group that has been and continues to be underestimated, underserved, disrespected and misunderstood.

Pepper Miller, co-founder of the Hunter-Miller Group, a multicultural marketing firm, and co-author of the book “What’s Black About It?” explains that one of the most common misperceptions advertisers have is that mainstream publications will reach all possible consumers. Since most African Americans speak English, they generalize, there is no need to market outside of the mainstream publications.

“Marketing is about segmentation, diversity and understanding who your customers are,” counters Miller, who has devoted many years to the field of diverse marketing. But why do advertisers feel that way when these facts are taught in most marketing classes, and when it is known that most African Americans generally distrust the mainstream media?

A 2008 study by Radio One entitled “Understanding Black America” revealed that only 13 percent of African Americans trust the mainstream media, and out of 29 million Blacks, only 2 million can be reached through mainstream publications.

In fact, there is a long history of corporations and organizations using Black newspapers for free press exposure while committing only a paltry amount of their vast advertising budgets to support the same papers that have opened up valuable editorial space to them.

A similar type criticism was lodged against Toyota by the National Newspaper Publishers Association (NNPA) earlier this year. The NNPA alleged that when Toyota’s image was hurt by devastating recalls a couple of years earlier, the Japanese car maker sought help from the Black press to restore the brand’s image and to encourage African American loyalty. The NNPA charged that Blacks stood by Toyota to the tune of $2.2 billion. However, in its $1.6 billion 2011 advertising budget, Toyota allocated only $20 million to be shared by all African American media, including newspapers, radio and television. And when Toyota ran ads thanking American consumers for remaining loyal, none of the thank-you ads ran in the African American press.

R.L. Polk & Co., an automotive marketing research firm, says African American consumers represent almost 10 percent of Toyota’s U.S. market share, with 15 out of every 100 automobile purchases by African Americans being a Toyota-made automobile.

Unfortunately, the slighting of African American media is a problem even among Black advertisers. The NAACP, the oldest and largest of civil rights organizations, ignored Black publications in advertising its annual Image Awards extravaganza. When doling out its advertising dollars for the event, the organization chose to utilize only mainstream publications. As a result, NAACP president and CEO Benjamin Todd Jealous was the target of much criticism from the Black press. Jealous claimed it was a “grave” oversight. “I am very sensitive to the need to support Black community newspapers. They are the only way to assure Black readers in a given community that you actually want your ads to reach them directly,” he said in response to the criticism.

This questionable marketing practice is also occurring in the music industry, where there are multitudes of African American performers. Despite this fact, the industry has invested few ad dollars targeting African American consumers.

This is occurring at a time when African American businesses and workers are hardest hit by unemployment and the ever-tightening economy.

Many executives in the movie industry are guilty of a similar myopia. They have operated on the assumption that African Americans will not attend a movie that does not have an African American lead and/or cast. However, a study conducted by BET this year revealed that 81 percent of movies seen by African Americans did not include an African American cast, lead actor or storyline. This same study also showed that the average African American goes to the movies 13.4 times a year in comparison to the general moviegoer who goes 11 times a year.

So the question becomes: why are these advertisers slighting their most reliable consumer?

According to a 2008 report from Packaged Facts, which publishes market intelligence on a wide range of consumer industries, Black buying power is projected to rise to about $1.1 trillion by 2012. There are currently 343,300 African American households within the United States earning $150,000 or more, as well as “819,700 individuals who earn a minimum of $75,000 per year.”

Although a number of companies have profited by marketing directly to the African American consumer, such as McDonalds, Gucci, Lexus, Lincoln, Procter & Gamble, State Farm, Infiniti, Bank of America, Wells Fargo Bank, overall most corporations and organizations have left the African American consumer out when it comes to their ad dollars.

In “Black Is the New Green,” authors Leonard Burnett Jr. and Andrea Hoffman write: “It would be foolish in the extreme not to tap into this rich buying segment, yet this is exactly what the marketing firms of companies (fail to) do all too frequently.”

Click here to read entire article: blackvoicenews.com

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