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Cesar M. Melgoza Headshot

The Multicultural Marketing Divide: Who Is the Real Mainstream Consumer?

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Most years are evolutionary, but few are revolutionary -- and honestly, 2013 was hardly transformational. In many ways, a stagnant business landscape was affected by a deadlocked political atmosphere and highly divergent perceptions of critical national issues -- such as health care and immigration reform. In other words, some embrace change; some embrace legacy -- even to the detriment of their own businesses' vital signs.

Some of the trepidation seen among business executives revolves around defining their target consumers. Whereas most of America is still made up of white non-Hispanic families, the vast majority of future growth emanates from diverse cultures -- such as Hispanic, Asian and African Americans among others. The difficulty lies partly in "marketing science" and partly on corporate legacy and priorities.

There are certainly many corporations who have increased their spending and focus on high-growth groups such as Hispanic, Asian and African American. According to Ad Age's 2013 Hispanic Fact Pack, for example, the top 10 investors in the "new mainstream" consumer spent $1.25 billion on "Hispanic media" during 2012 alone. This is up from $956 million in 2011 -- a 31 percent change year over year! At the top of the list are Procter & Gamble, McDonalds and T-Mobile, who each spent more than $100 million on Hispanic targeted advertising.

Overall, media spending growth from 2011 to 2012 was 3.2 percent, yet growth in overall Hispanic ad spending was 11.1 percent -- that's nearly $8 billion and well over three times the growth of ad spending overall. Nonetheless, the ad spending on the Hispanic segment is reportedly far below this segment's proportion of the population (about 6 percent of total ad spending, compared to 18 percent of total population) and much less than their proportion of population growth, which has been around 60 percent in recent years. As Hispanic media spending increases, will it begin to blend with the overall spend? Or will "Hispanic-focused media" continue its ascent at the current rates?

One emerging theory has been the discussion of "Total Market," which -- although somewhat vague and subject to interpretation -- generally refers to addressing multiple cultural segments (including white non-Hispanic) which roll-up into the aggregate consumer population.

The discussion is interesting, but it's also peculiar. It appears the same proponents of multicultural marketing are promoting the Total Market concept. But those previously charged with addressing the "General Market" (a term used to describe the mainstream consumer) are not participating in the Total Market dialog in any meaningful way. Therefore, despite the recent growth in spending and buying power of multicultural audiences, multicultural marketers and those examining the general market do not appear to be on the same page.

The risk of the Total Market approach is that it's also too broad -- cultural segments get blended in and compromised within the overall milieu of the marketing mix. In some ways, this seems a defensive approach for brands in order to not get left out -- "playing not to lose," if you will.

The political landscape seems to contribute to the ambivalence among marketers. For instance, the fact that immigration reform has been severely stalled in congress seems to reflect that many leaders (and the public at large I suppose) are in denial as to the emerging role that cultural segments are playing and will play in our business economy. Perhaps it's an excuse for business executives not to get more aggressive and maintain the status quo. As stated in prior blogs, I find the continued delay of immigration reform especially disappointing, given the fact that we have a multicultural individual in the White House and that 71 percent of the Hispanic vote provided a clear mandate to reform outdated immigration laws.

But I have hope for next year. I believe that as businesses and marketers, we can free ourselves of the gridlocked national perspective on immigration to recognize the importance of a multicultural audience. Here are some tangible gains to be made next year:

  • A leading Hispanic or Multicultural agency and their brand representative will dare to bring a legitimately multicultural message into mainstream media. There's even a chance that the splash will be made during the Super Bowl.
  • One or more Latino, Asian or African Americans will be appointed Chief Marketing Officer in Fortune 500 companies next year. I believe that CEO's and institutional investors get it -- they will see the same vision and want someone to lead their company to where the growth is.
  • Bicultural media will shift into the next gear as "experimental media" proves itself. Next year should see the fruits of companies like Univision/ABC's Fusion, Nuvo and MTV Tr3s -- hopefully with quantitative backing -- that lead to further investment in that potentially high-growth space.
  • Immigration reform (if and when it passes) will spur additional acceptance and momentum within the multicultural/new mainstream marketing and business initiatives.

As 2014 takes shape, the question of "who is the mainstream consumer" will be asked more frequently. This New Mainstream consumer is one who increasingly embraces its heritage and chooses to indulge in multiple media within a multicultural context. Whether marketers embrace it or not -- held back by legacy and risk aversion if they do not -- American consumers will become increasingly diverse in 2014 and will recognize the evolving face of our nation.

The time has come for CMOs to do what chairmen and institutional investors want them to: go for the growth and erode their competitors' market share -- increasingly, that means trade legacy marketing tactics for in-culture targeting.

Learn all about the future of marketing at The New Mainstream Business Summit, March 11-13, Miami, Florida.