Even as companies rein in marketing spending during a sinking economy, many advertisers are likely to step up efforts to reach minorities online in the coming months, researchers say. Amid increases in the numbers of Hispanics, African Americans, and Asian Americans online, marketers are adapting campaigns to court these markets, online advertising researcher eMarketer said in a Dec. 17 report.
Of marketers that target minority groups, 95% tailor messages to Latin Americans, 76% target African Americans, and 38% focus on Asian Americans, according to a survey released in November by the trade group Association of National Advertisers (ANA) and marketing agency Mkgt. That's up from 86%, 60%, and 35%, respectively, in 2003, according to the research.
The numbers reflect increased use of the Internet by nonwhite segments of the population and the importance of making marketing messages culturally relevant to potential new customers, eMarketer says. According to the Pew Internet & American Life Project, 70% of African Americans are now online, making them the fastest-growing population of Internet users since 2003, when only a little more than half were online. Hispanics are second-fastest-growing and now boast a 79% penetration rate—higher than any other group. By comparison, three-fourths of non-Hispanic whites are online, up from 64% three years ago.
To be effective, advertisers "can't just translate their mass-market campaign into another language," says eMarketer senior analyst Lisa Phillips. "You have to have an understanding of their cultures and traditions." That approach has worked for Microsoft (MSFT). For a recent ad campaign for Windows Vista, the company noticed that Hispanics were responding particularly well to the product's parental-control features. So it rejiggered the online display ads to emphasize those features for Hispanic audiences.
Online, it's easier to measure which campaigns work with different ethnic groups, says Microsoft's director of multicultural marketing Jose Piñero. The Redmond (Wash.) software maker introduces diversity elements in its marketing one product group at a time. In 2005 only its Xbox, MSN, and retail teams had started multicultural components. Now it has 20 groups that do. The company expects that number to grow in 2009. "As more product groups begin to do multicultural marketing, online is a popular medium because it's so easy to track" what types of consumers they reach, Piñero says.
Some marketers have found that cultural niches tend already to have formed close-knit communities online, and they see this as an opportunity for their message to spread virally. That was the case with Toyota Motor (TM), which saw a blossoming Asian American film community online as a good target for its Matrix car. The company hired InterTrend Communications, an ad agency that specializes in the Asian American audience, to create a marketing mini-site online called "The Director's Chair," where it compiled exclusive video interviews with popular Asian American directors and actors, such as Harold and Kumar's John Cho. "Asian Americans tend to be technologically savvy and rely heavily on the Internet as a means of staying connected to friends [and] family, and for sources of information," says Carolyn Yian, InterTrend's associate director for consumer insights.
Agencies like InterTrend that specialize in multicultural marketing are projecting demand at least to hold steady for the next year—a promising sign in the current economic climate. "I can safely say that we'll be where we were in 2008," says Ken Cervantes, vice-president and activation director for Forty Two Degrees, the multicultural unit of Publicis-owned (PUB) Starcom MediaVest Group. "If anything, what you're probably looking at is a slight relocation of ad dollars to extend things we are doing on television into digital."
Some new categories of advertisers are looking to compete in a cultural segment where they never have before. When that happens, the advantage goes to the first-mover, says John Nash, president of Moon City Productions, a New York-based ad agency that caters to gay and lesbian markets. For example, Nash says vodka makers like Sky and Smirnoff have recently tried to court gay and lesbian consumers without as much success as Absolut, a Moon City client that has marketed toward this segment for decades.
While it's necessary for advertising to reflect cultures and attitudes of its intended audience, the importance of translating language should not be overlooked. In November, Home Depot (HD) became the first home improvement retailer to set up a full-function e-commerce site entirely in Spanish. Says Jean Niemi, a spokesperson for the company: "One of the things we realized was that home improvement for anyone in general can be difficult, so for Hispanics to go on and not do it in their own language it can be [especially] intimidating."