Multicultural Marketing Grows but Frustrations Mount

November 14, 2008

This article is included in these additional categories:

African-American | Analytics, Automated & MarTech | Hispanic

Multicultural marketing (MCM) continues to grow as a strategic platform for driving brand and business performance, but marketers feel stymied by a lack of funding, lukewarm executive support and inadequate metrics, according to a survey from the Association of National Advertisers (ANA) and research firm ‘mktg.’

The survey of ANA members finds that as the marketplace becomes more diverse, multicultural initiatives are becoming increasingly crucial for all categories of business. A substantial majority of survey participants (77%) currently have multicultural marketing initiatives, while 66% indicate that their company’s efforts in the MCM area have increased over the past few years.

Despite the continued growth and strategic emphasis, frustration among marketers remains high. Only 45% express satisfaction with the results of their MCM initiatives, with 26% saying they were “somewhat” or “very” dissatisfied.

MCM Barriers and Issues

Illustrating this frustration with multicultural marketing, participants noted a range of barriers and issues:

  • Only 22% of survey respondents said their firm had a high degree of knowledge and disciplined best practices. This includes the inability to consistently integrate MCM programs into the overall marketing mix.
  • 58% cited lack of adequate funding.
  • 45% pointed to insufficient internal support.
  • 34% noted inconsistent top management support.
  • 45% of respondents cited a lack of relevant metrics to measure performance.

Segment Identification

The 2008 survey? showed a substantial improvement over the previous survey in identifying market segments targeted by MCM programs. The top segments identified are:

  • Hispanic American: 95% (vs. 86% in 2003)
  • African American: 76% (vs. 60% in 2003)
  • Asian American: 38% (vs. 35% in 2003)
  • GLBT (gay, lesbian, bisexual, transgender): 24% (no data available for 2003 as this was the first year the survey polled marketers on this community)

Varied Strategic Approaches

More than half (57%) of respondents defined MCM as “narrowcasting” – creating separate messaging for distinct market segments and communicating via media that reaches multicultural consumers. This percentage is down from the last survey when 78% chose the narrowcasting definition. Other definitions include “mainstreaming,” which repurposes general advertising approaches to appeal to MCM segments (11%), and the “translation” approach (10%), which simply translates general market materials for outlets catering to multicultural audiences.

Media Selection

As in the 2003 survey, print continues to be the most favored media vehicle for reaching multicultural audiences (65%), followed closely by TV (61%), sponsorships (54%), public relations (54%), targeted radio (53%), in-store marketing (51%) and events (51%). Online advertising placed lowest (49%).

Agency Selection

In executing MCM campaigns, most respondents (55%) say they prefer a multicultural-specific agency for creative development, with about one-quarter saying they rely upon their general agency of record. However, using a specialized agency is considered the “best practice” based on satisfaction scores.

MCM Metrics

There are wide ranges of metrics employed for measuring MCM effectiveness. Brand tracking studies (55%) and sales growth/volume (54%) are used most often. Other measures include market share (41%), advertising research (38%) and brand equity measures (38%). Only one in four firms analyze ROI.

“A focused multicultural marketing strategy is vital to building brands and driving business growth,” said Bob Liodice, president and CEO of the ANA. “Our research shows that multicultural marketing programs are growing and will continue to do so in the future. However, marketers are frustrated and concerned about program quality, with less than half expressing satisfaction with their firms’ efforts to date.”

“With multicultural consumers making up two-thirds of the millennial population and Hispanics representing one-sixth of the U.S. population by 2010, the multicultural market is an increasingly sizable and influential segment,” said Frank Dudley, CMO of ‘mktg.’ “Globalization has reduced the pressure on ethnic communities to assimilate, hence making an insightful understanding of these sub-cultures critical to any effective market strategy. And still, this study’s data suggests marketers have yet to establish standardized best practices.”

About the survey: Conducted by the ANA in partnership with marketing services firm ‘mktg,’ the 2008 multicultural marketing survey is the third edition of the study, following earlier versions in 2002 and 2003. Seventy-four marketers from member companies responded to the survey, which was conducted in August 2008 in preparation for the ANA’s annual Multicultural Marketing Conference.

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