Marketers aiming to increase their companies’ focus and spend on effective multicultural marketing are not going about it correctly. Some aren’t going about it at all. And when they do have a “strategy” in place, it is often agency-focused, tactical, and all about advertising campaigns, not a long-term strategy.
Unfortunately for a lot of companies, the CEO and board don't see the value, according to a new survey from the Chief Marketing Officer (CMO) Council and Geoscape, “Activating the New American Mainstream.” The survey found that half of the 150 North America-based senior marketing executives polled feel there actually is some level of support for multicultural engagement strategies from the senior levels of the organization, but it isn’t coming from not from the top.
Sixty-six percent feel they have support from the CMO, and 70% feel they have the support of brand management for multicultural marketing initiatives. But over half say the CEO does not share that opinion. When asked to rate commitment levels, only 20% of marketers felt that multicultural strategies were mandatory and unanimously embraced across the organization, and just over a quarter believed that the multicultural market was “mission critical” for the organization.
About one-fifth of those polled said they invest in excess of 15% of overall marketing budgets to engaging with multicultural markets: 28% spend less than 5%. And while over half do see their multicultural market investments increasing over time, only 15% believe this increase will be significant; 2% anticipate a decrease in investment.
Hispanics currently represent 18% of American households, but were responsible for nearly half of the growth in consumer spending from 2013 to 2014, per Geoscape. Asian-American and Hispanic markets accounted for two-thirds of the total economic spending growth.
Liz Miller, SVP of marketing with the CMO Council, tells Marketing Daily that tapping a multicultural agency isn’t enough; a perspective shift within a company is mandatory. “We are short-changing what multicultural should be. Quite frankly it isn't about a campaign, but much more; it needs to be part of the conversation about data and personalization.”
More than half of respondents (54%) said their multicultural efforts are deployed through a total market approach, where all multicultural segments are integrated with pooled resources. Other responses revealed a focus on specific multicultural segments, with 17% targeting Asian-American and African-American consumers with separate resources but one strategy; 9% targeting Hispanic, Asian-American and African-American consumers with separate resources and dedicated strategies; and 7% targeting only Hispanic consumers with separate resources. So even among those who are implementing multicultural efforts, the majority (71%) are doing so through a shared approach.
Miller says that an authentic strategy goes far beyond communicating with customers. “Are we asking the right thing of our data? Are there norms and behaviors that, if we understand them, can lead to new products and new opportunities for revenue optimization? We have relegated multi-cultural to advertising and communications.”
She argues that without a multicultural commitment within the marketing organization, the company may well launch a successful campaign, and acquire customers from diverse ethnicities, and then have no idea how to retain that customer, continue the communication, and measure lifetime value, beyond campaign ROI.