Planning for 2014: Don’t Do it for the Multiculturals, Do it for the Money
Decision makers always want to know how to get the biggest ROI from multicultural markets, and that answer is simple: if brands truly invest— allocating time, money and assets to the effort—the market will provide them the biggest return.
With the summer speeding by and companies finalizing their planning strategies for 2014, considering how to allocate budget dollars towards multicultural efforts is good food for thought. More and more brands are acknowledging the ever-growing multicultural consumer presence in this country. When the 2010 US Census was published, minorities made up 35% of the national population (with Hispanics making up 16.7% of the US population). As many companies have already noticed, this particular population growth translates directly to the consumer market. In 2012, for example, the estimated purchasing power of Hispanics was $1.2 trillion. This number is expected to reach $1.5 trillion in 2015. Those who plan to invest can tap into that enormous spending power.
“Don’t treat multicultural efforts like the middle child, paying attention to it after you’ve spent time with the other kids and when it’s only convenient for you,” says George L. San Jose, president and chief creative officer at The San Jose Group. “In order to win the multicultural dollar, brands have to plan to invest in the market as well as follow through with that plan. Otherwise, those consumers will fall through the cracks just like the forgotten middle child.”
Hispanics and other minority groups such as African Americans and Asians will not be minorities for long, a fact that renders the decision to allocate a significant portion of a brand’s budget toward multicultural efforts very wise, if not necessary. In recent years, many companies have taken advantage of this opportunity by increasing multicultural spending and creating campaigns geared toward minority consumers. The results, overall, have proved successful.
One notable example of a successful multicultural marketing strategy comes from Walmart. In 2012, the world’s largest retail corporation announced plans to double its multicultural ad spending as part of a company initiative to “blow up the multicultural budget.” This strategy enabled the company to move multicultural spending out of silos and into the individual business units in order to make multicultural efforts part of everything it puts out. According to Globe Newswire, Walmart leads all retailers in 2013 with over $65 million annual spending on Hispanic marketing. The company’s efforts have not gone unnoticed: Walmart was recently awarded the first ever “Marketer of the Year Award” by the Association of Hispanic Advertising Agencies (AHAA). The award was presented at the AHAA’s annual conference and given to Walmart for its innovative ad campaigns targeting Hispanic consumers. Other brands with successful multicultural marketing strategies are McDonalds and Pepsi, both of which have won several Multicultural Excellence Awards in various categories from the Association of National Advertisers.
The take-home message here is clear: minority groups represent an increasingly fundamental portion of our country’s population and a crucial percentage of consumers. Ad campaigns geared specifically toward multicultural consumers have yielded overwhelmingly positive results, as made evident by companies such as Walmart and McDonalds. Needless to say, brands have an important consideration to make when finalizing their budgets for 2014.