Integrating Multicultural Capabilities into your Agency

Multicultural Marketing in the Digital Age:

October 17, 2010

Overview

• Introduction

• 3 multicultural market forces

• 2 industry trends

• The big [multicultural] takeaway

• Your opportunity and challenge

introduction

a little about me

• I’ve been working in advertising for the last 10 years

• My background :– Economics– Digital technology– Management consulting

• I kind of stumbled into this business…

Jose

… and I’m one of the few people you’ll meet that runs a successful ad agency that never

worked in advertising before.

my story explains a lot

• 1998: I left a consulting career to start a Hispanic-focused dot com

• Since that day, I found myself in the middle of a transformation of the advertising industry

my agency

• I started Sensis in 2000 2 days after shutting down my dot com

• Sensis was started to address a small gap I saw in the ad business during my dot com days

• During the last 10 years I’ve realized that “that little gap” was actually bigger and more transformative than anything I could have ever imagined in 2000

Sensis story

clients I’ve worked with…

agencies I’ve gotten to intimately know…

But everything about me and Sensis always comes back to a simple story:

What happens when digital and multicultural get so big and transformative that they can no longer be nicely packaged

as marketing specialties?

3 market forces

The growth of U.S. multicultural market

let’s start with some definitions

• Multicultural markets = various minority groups

– Hispanic– African American– Asian American– GLBTQ– Other

• Middle Eastern, European, South Asian, Native American, Disabled, …

Minorities makes up over 35% of the U.S. population

65%

16%

12% 5% 2%

WhiteHispanicBlackAsianMultiracial

Multicultural America

Source: U.S. Census Bureau

Multicultural buying power

2008 2013$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$951$1,491

$913

$1,213$269

$429

AsianAfrican-AmericanHispanic

In billions… with a “B”

How did we get here?

• Unprecedented immigration spurt of the 1980s– Similar to that of the early 20th century– Both have fundamentally remade the ethnic

landscape of the U.S.

• 83% of U.S. population growth during last decade came from minorities**

* Source: Professor Jacob Vigdor, Duke University**Source: Brookings Institute

By 2048 the minority will be the majority

Source: U.S. Census Bureau

in 13 years 50% of Americans under 18 will be minorities

Source: U.S. Census Bureau

Multicultural consumers are changing the general

market

They are young

Young consumers that are:

shaping popular culture

color blind

They are shaping the mainstream:

setting trends in food, fashion, and music

Salsa and ketchup

"leading with ethnic insights"

Multicultural consumers are themselves changing

A majority are now U.S. born

Multiracial Americans are now the fastest growing U.S. demographic group (5.3 million)

And digital is changing the game…

Multicultural and digital

• early adopters of new technology• leading consumers of online content• highly receptive audiences for online

advertising

Hispanics and Digital

• 24.6 million consumers – More than half (54%) of U.S. Hispanics use the Internet– Internet access growing at a faster rate (13% since 2004)

than among any other group

• Total purchasing power of $900 billion• The mobile device is an important point of Internet

entry for Hispanics– They are heavy “data plan” users – Over-index in advanced mobile usage

• Hispanics spend more time on social media sites than their general market counterparts

African Americans and Digital

• 30 million African-American online– Nearly 80% of all African-Americans are

online

• They are also among the early adopters of the mobile Internet

Asians and Digital

• 14 million Asian Americans online– Internet penetration nearing 80%

• market is complex and difficult to reach,  due to the wide range of original nationalities, subcultures and languages. 

• Internet provides the greatest opportunity for micro- and macro-targeting consumers in this market.

2 industry trends

Ethnic ad agencies have fallen behind

Ethnic ad agencies are stuck in the analog era.

Digital is passing them by

• Only 5% of all Hispanic media spend goes online

Digital is a division

• Most ethnic ad agencies still treat digital as a division

– “Digital Director”

Lack of sophistication

• Most media spend goes to Top 3 “ethnic” digital platforms– Hispanic:

– African-American:

– Asian:

– GLBTQ:

Large general market agencies are building

multicultural capabilities

In the last 12 months

Draft FCB has formed a multicultural unit

Home Depot has moved their Hispanic business to their general market agency, The

Richards Group

Burger King moved their Hispanic advertising to CP+B

The big [multicultural]

takeaway

My thesis

New definition of “full-service”

Multicultural marketing will become an integrated capability of full service agencies

A disruptive change

Rapid, chaotic change usually means an opportunity for businesses that can see and

exploit it

New business models will emerge

• Remember Napster?– The record industry tried to fight

it

• Apple finally figured out how to exploit it– Tower Records died – iTunes was born

Future advertising will look different

Future advertising will look different

• But if you play close enough attention, you’ll see it’s already out there:

What this means for you

A huge opportunity

Adapt to this new model – embrace and integrate multicultural capabilities

Starting tomorrow

• Leverage what you already have

• Make multicultural understanding and/or background part of your new hire evaluations

Starting next quarter

• Stop outsourcing multicultural work to other agencies

• Make digital your entry point

It’s all about digital

This is where ethnic ad shops are opening the door for you…

Digital Entry Points

• Social– Multicultural over-indexing in social media

• Mobile– Multicultural early-adoption of mobile technologies

• Digital media– Hispanics & African-Americans spend more time

online than with any other medium

A bigger challenge

You need to quickly figure out and make multicultural an integral part of your agency

How quickly?

• Depends on what type of agency you are (and hope to be)

– National?– Regional?– Industry-focused?– Discipline-focused?

THANK YOU!

@jrvilla

www.linkedin.com/in/josevilla

www.thinkmulticultural.com

jrvilla@sensisagency.com