The recording industry was one of the earliest to appreciate the value of producing distinct lines for different minority groups. The 1921 Columbia Records catalog included a separate "race" category of jazz and blues, which was marketed to black Americans.
By the mid-1930s, the African-American market began to be recognized by marketers as representing a group of consumers with different brand preferences and consumption patterns than the white majority. To tap into that market, advertisers set out to display concern for the black consumer, using black spokespersons to sell products and tailoring messages to meet the needs of the market. It was not until well after the end of World War II, however, that the African-American market received any national notice.
In 1952, Sponsor, a media magazine, began publishing an annual black issue designed to bring the Negro market to the forefront. In its sixth annual black issue, Sponsor reported that, regardless of advertisers' awareness of minority groups among the mass audience, most national advertisers tended to use general mass media rather than minority-oriented media to reach this particular market segment. They reasoned that the general media reached everyone. However, advertisers did not account for differences in consumption patterns and emerging demographics of the minority market.
Growing buying power
In the decade following World War II, the median income of black Americans increased more than 350%. By the mid-1950s, blacks made up the second-largest (and fastest-growing) market segment in the U.S. and accounted for an estimated $16 billion in buying power. Those trends signaled burgeoning opportunities for astute advertisers.
While more companies began examining the sales potential of the market, many still believed that attracting the black consumer did not require a specialized approach, and virtually everything produced for the general mass media was designed for and targeted at the white consumer.
However, research showed that the purchase and consumption patterns of African-Americans differed greatly from those of their white counterparts in the same income brackets. Black consumers, for example, spent more than their white counterparts for clothes, cosmetics and toiletries, groceries, frozen vegetables and soft drinks. In addition, they were more brand-conscious and willing to pay higher prices for certain items.
Until the U.S. Civil Rights movement in the late 1950s and '60s, Madison Avenue media planners largely overlooked the country's black population. Progress in civil rights and rapid political, economic, social and educational advancements, however, made advertisers acutely aware of that market and some—in particular, advertisers of alcohol, cigarettes and soft drinks—successfully utilized a variety of media to reach the black audience. While some advertisers employed integrated TV commercials or black models in token appearances, those approaches did not win black consumers.
Television became an integrated medium in the 1963 season, and alert advertisers picked up on the change: Gillette aired a national network campaign featuring black models; Pharmaco cosmetics cast all black commercials; and the nation's first black-appeal TV station was launched in Washington.
By the mid-1960s, as whites moved to suburbia, blacks and other minorities rapidly became the urban dwellers. By 1966, almost half the black population's $27.6 billion effective buying power was concentrated in only 25 U.S. counties. Urban blacks and other minorities represented a great marketing potential because most were concentrated in a "market segment" of less than a few square miles.
Over a 20-year period beginning in 1980, the African-American population of the U.S. increased 15% and the Hispanic community increased 53%. At the outset of the 21st century, the total income of African-Americans in the U.S. was estimated at $276 billion; Hispanics at $134 billion; and Asians at $35 billion.
In addition, waves of immigrants from Asia, Latin America and Africa added to an already growing minority population and radically reshaped the buying habits of the "typical" American consumer. Ethnic-minority shoppers, mostly African-Americans, Hispanics and Asians, spent an estimated $600 billion on everything from cosmetics to clothes to automobiles in 1997, an 18% increase since 1990. By the year 2000, minorities accounted for 30% of the U.S. economy.
Quest for ethnic consumers
Arab, Asian, Hispanic, Russian, Eastern European, African and Caribbean immigrants are often best reached in their native languages, which requires advertisers to become familiar with ethnic media, and have the potential purchasing power of about $400 billion. As with black consumers in the 1960s, many new immigrants are geographically clustered.
By 2000, in their quest for ethnic consumers, advertisers were depending less on traditional forms of mass marketing, such as network TV and general-circulation magazines, and more on specialized media, such as cable TV and ethnic- or subject-oriented magazines.
In 2000, ethnic spending power was estimated at $500 billion annually. The major ethnic communities in the U.S. were African-Americans, Hispanics (Latin America, Mexico, Puerto Rico, Cuba), Asians (predominantly China, Korea and Japan), South Asians (India and Pakistan) and people from the Middle East and Europe (primarily Eastern Europe and Russia).