The convergence of a changing demography, new technologies and a fragmented media ecosystem has transformed marketing as we know it. Yet marketing to a diverse audience continues to lag significantly, bound by an outdated paradigm and a total market strategy that has failed to address an increasingly diverse marketplace.
I’ll be discussing this with a panel of marketing leaders at a special webinar on October 8. We’ll take a critical look at the past, present, and future of marketing to multicultural consumers and advances a strategic framework of how marketers can take their business to new heights in the 21st century.
A 2018 study conducted by the CMO Council found that approximately 67 percent of U.S. marketing executives surveyed said their CMO had high-level support and buy-in for multicultural marketing efforts, but less than half said their CEO did not believe multicultural consumers were critical to their growth plans. This lack of top-tier support translates into a de-prioritization of multicultural programs across corporate America. The study also found:
- About half (51 percent) of marketers in the U.S. reported having too many competing priorities within their organizations;
- Only 20 percent of marketers deemed multicultural strategies mandatory and unanimously embraced across their organization, and
- Just over 25 percent believed that multicultural consumers were mission critical for their organization.
Are you surprised by these findings?
Marketing in the United States is at a crossroads. The U.S. advertising and marketing industry is encountering an unprecedented inflection point spurred by the convergence of demographic and business forces that will require all corporations to reconfigure their marketing capabilities. Those that adapt will not only survive—but thrive. Those that don’t will become obsolete and suffer the consequences.
Corporations have two options: Follow the status quo and ignore change at the risk of monetizing the current business paradigm, which over time will lead to self-fulfilling failure, or adapt to the changing environment and develop new capabilities that can serve as the basis for self-fulfilling success.
In my recent book, The Big Shift, I outline a strategic framework that brand marketers can use to navigate through this inflection point and grow their business with U.S. Latinos and other multicultural consumers in the 21st century. Drawing from dynamic capabilities literature, it proposes that companies must adapt, renew, or reconfigure their current resources and capabilities to industry — that must align with a multicultural America.
The framework is based on a number of key factors:
1. Understanding paradigms and what drives Latino marketing. The Hispanic Marketing Paradigm is a set of concepts and beliefs, including best practices, research methods, and industry standards that have shaped marketing to U.S. Latinos for more than three decades. The Hispanic Marketing Paradigm is an outdated model and companies that do not make the sufficient and necessary changes are likely to face business declines.
2. Understanding the bicultural Latino. For more than 30 years, the U.S. Latino advertising and marketing industry (ad agencies, media publishers, and trade associations) has depicted Latinos as a linguistically and culturally homogeneous niche segment. This is an oversimplification of the Latino demographic. I believe that marketers must replace the collective, Spanish-language-centric view that has defined Latino marketing for decades with a broader, more nuanced approach that reflects the duality of the entire Latino population.
3. Create new models to improve media ROI. A new media buying and planning methodology for U.S. Latinos, the Nativity-Based View, is based on data science. Our research has found that nativity (not language) is a better predictor of what Latinos consume in media. Between 70-80 percent of Spanish-language linear television does not reach Latino millennials, and an estimated $1 billion dollars have been spent in Spanish-language television attempting to reach this demographic. The Nativity-Based View challenges the central notion that Spanish-language television is the “best way” to reach U.S. Latinos.
4. Question in-culture marketing in a multicultural America. Popularized in the early 1990s, in-culture marketing has served as the foundation in Latino marketing, promoting the “best way” to target Latinos was in Spanish-language media and by leveraging culturally-relevant insights. Moving forward, I advocate that rightsizing the cultural silo and elevating the multicultural population front and center of mainstream marketing. This means activating on brand-level insights that drive growth across all ethnic and racial groups. Think of it as total market with multicultural consumers at its core.
5. Develop measurement with granularity. Traditionally, U.S. media ad spend has been aggregated and calculated by adding all consumers together. This concept focuses on the Ethnicity-Race View (ERV), a new measure that reports KPIs by ethnicity and race. As the mainstream reaches a multicultural tipping point, marketers will need to develop new measures to account for all segments of the population.
6. Challenge our mental models and develop dynamic organizational capabilities, respectively. These two factors address important intra-organizational relationships. The link between mental models (i.e., the model that governs how people view the world) and organizational capabilities is a key part of the framework, which helps address a number of issues that affect process and strategy within corporations. I propose that corporations will need to make a shift in how they operate in order to achieve a strategic fit between their internal resources and capabilities and the opportunities in the external environment.
Adapt or die
America is a multicultural nation, right now. Today, New York is 68% multicultural. Los Angeles, 73%. Miami, 90%. The business case for diversity is well-documented. The biggest barrier toward change in the advertising and marketing industry is change itself. Change is disruptive and oftentimes fatal to those organizations whose business model lags the changing demographic and business landscapes.
Brands win or lose market share at the hyperlocal level—where consumers and products meet. There are leaders, followers, and laggards in every business category. With the help of a strong framework and proof points, corporate America will be ready for a multicultural America, no matter where they are today.
2020 © Dr. Jake Beniflah. All Rights Reserved.