Despite Hispanic Spending Power, Half of Marketers Fail to Support Multicultural Marketing Initiatives
Although Hispanic consumers may hold $1.5 trillion in buying power, half of U.S. marketers have failed to establish multicultural marketing initiatives within their organizations, according to a new report.
The Chief Marketing Officer (CMO) Council and Geoscape released a new study on Sept. 1, which focused on the different aspects of marketing to multicultural demographics, including how organizations have maximized strategies and the best ways to engage increasingly diverse customer segments.
"Activating The New American Mainstream," the new CMO study, found that 50 percent of marketers still don't have multicultural marketing initiatives established within their organizations, which is surprising considering tremendous multicultural growth in terms of population and spending power.
There also seems to be disagreement within organizations about the importance of multicultural efforts. While 67 percent of CMOs see the value of such efforts, just 55 percent of CEOs share that opinion.
CEOs and boards have failed to prioritize or fund efforts to connect with non-white consumers. Additionally, they've resisted implementing chief marketing strategies known to brands that are looking to engage with multicultural groups - such as offering culturally relevant information in a personalized method - that could grow their business.
Meanwhile, Hispanics contribute to 50 percent of consumer growth, while representing 18 percent of American households.
Together, Asian-American and Hispanic markets account for two-thirds of total economic spending growth. Asian American, African-American and Hispanic markets are massive, and those multicultural markets will grow by nearly 130 million in under five years, according to Geoscape. This will occur as the non-Hispanic white population declines, dipping below 50 percent of the total U.S. population by 2042.
Disinterest in prioritizing multicultural engagement within the top-levels of companies can sometimes be credited to there "being too many competing priorities" (51 percent).
However, only 20 percent of marketers surveyed indicated that multicultural strategies were necessary and an established part of their organization. Also, one-fourth believed the multicultural market is essential to a firm.
Twenty percent invest less than five percent of funds into multicultural programs, and 20 percent invest an excess of 15 percent of overall marketing budgets. Fifty-three percent indicated that they're growing their investment into multicultural markets in the future. Additionally, two percent plan to decrease investment in said markets.
When it comes to deploying individualized marketing strategies for specific ethnic groups, just 16 percent of marketers have launched individualized initiatives based on cultural behavioral patterns and insights in order to seek deeper levels of engagement.
Experts have said that it's important to steer away for the niche campaign and to offer a personalized customer experience, which observes culturally distinct behaviors and interests. Successful campaigns can no longer be won by simply replacing images or text, or swapping out languages. It's important to target consumers in ways that consider cultural nuances, preferences and unique cultural behaviors.