"We are the general market," she says.
Increasingly, marketers agree-even if they haven't totally figured out how to handle the potentially seismic shift in which ethnic groups are becoming a huge force in the general market. Their power lies not just in the sheer size of these groups, which often buy disproportionately more in a product category than other groups, but minority segments also have become big influencers of the rest of the population.
"The future of diversity is not multiculturalism-separate and distinct ethnic enclaves-but a mixing, blurring and blending of racial and ethnic traits," says Roger Selbert, VP-strategic planning at Hispanic agency LatinWorks, Austin, Texas.
For diaper marketers, Hispanic women are their best customers. At the candy counter, 55% of M&M/Mars' Snickers bars are bought by African-Americans. Western Union Financial Services won't be replacing its former general-market agency, Interpublic Group of Cos.' Lowe Lintas & Partners Worldwide, New York, but instead will rely more heavily on its multicultural shops. Western Union's biggest customers are ethnic groups transferring money to Latin America or Asia. "It's mind-boggling it took them so long to figure that out," says an agency executive who has worked on Western Union.
Census data show that in the last decade, the Hispanic market has grown by 58%, compared with 3% growth for the non-Hispanic white segment; another 35% jump for Hispanics is forecast for the next 10 years. Inspired by those numbers, converts to multiculturalism are fueling the market despite the slumping economy. For instance, Hershey Foods Corp. just started advertising to Hispanics, and Anheuser-Busch, a veteran, plans to increase its Hispanic ad budget in 2002.
Multicultural ad budgets aren't completely insulated, however. The Association of Hispanic Advertising Agencies just slashed its forecast for ad growth this year to 6% from 13%. That's still way ahead of the general market, where 2001 ad spending is expected to fall at least 2% according to varying estimates. African-American ad spending also is expected to drop from double-digit growth to 5% this year, says Bob Tassie, president of Unity Media, New York. He predicts African-American ad spending will fall by 2% next year.
Competition is fierce for consumers who slip between ethnic media and the general market. For Univision, the Spanish-language network that absorbs almost half the Hispanic market's $2.1 billion in media spending, the most formidable rival is English-language TV.
Although Univision regularly beats English-language channels in ratings in Latin cities like Miami and Los Angeles, 70% of Hispanics watch TV in both English and Spanish, according to Strategy Research Group. Just 17% watch only Spanish-language TV.
Univision is starting a second network, Telefutura, in January to target Hispanics, especially men and the youth market, who mainly watch English-language TV. Another Univision weapon is its cable network Galavision, which carries a handful of programs that target bilingual, bicultural Hispanics. Last month, Galavision's weekly English-dominant "Galascene" started airing "La Familia," 3- to 5-minute animated segments featuring the adventures of six irreverent young Latinos of different ethnic mixes and their less acculturated parents.
"It's like `South Park' for the Latin market," says Diane Librizzi, CEO of "Galascene" producer La Loca Entertainment. In an interesting crossover, 32% of the audience for her trendy, Latin culture magazine program is not Hispanic, she notes.
Caramba Communications, which created "La Familia" as a Webtoon (caramba.com), hopes the Latin comedy will develop into a half-hour series as "The Simpsons" did after starting as a segment on the "Tracey Ullman Show" on News Corp.'s Fox.
On the print side, at a time when most U.S. newspapers are in a steady decline, Tribune Co.'s 3-year-old New York daily Hoy has climbed to paid circulation of 65,768, up 31% for the six-month period ended Sept. 30, vs. the previous year. In addition, earlier this year it launched a Sunday edition, whose circulation now tops 21,000. Sam Pagan, Hoy's national advertising director, says the company is looking into launching Spanish-language dailies in other heavily Hispanic urban areas.
According to Strategy Research Corp., 55.4% of Hispanics prefer to see ads in Spanish, while 30.3% would choose English and 13.2% don't have a preference between the two languages. Young Hispanics ages 18-24 are evenly split, with 44% preferring ads in English and 46% in Spanish.
In some cities, former minorities collectively are now the majority. Both Los Angeles and Miami are more than 60% Hispanic, African-American and Asian-American, and New York is approaching one-half.
"The U.S. is disproportionately influenced by non-white ethnic groups," says Dakota Pippins, director of the urban think tank at Bcom3 Group-backed Vigilante, New York. "Upwards of 85% of African-Americans, Latins and Asians live in urban areas. [But] urban culture is predominantly white." Of the $3 billion sales in rap music each year, for instance, $2 billion is purchased by whites.
"It's the blurring that's the opportunity," Mr. Pippins says. "If you can tap into a message that resonates across traditional ethnic boundaries, man, that's a smart way to market your product."
For example, Mistic, marketed by Cadbury Schweppes' Snapple Beverage Corp., was a declining brand that had lost its relevance, Mr. Pippins says. Then it "was repositioned against an important urban cultural value-bold self-expression," he says. The new tagline was "Go bold." Print ads from Vigilante use explosive colors for different flavors, like a person with neon yellow eyes for lemon. Vigilante CEO Larry Woodard says Mistic's sales rose by 29% this year.
SEAT AT THE TABLE
Multicultural agencies increasingly are finding there's a seat for them at the table. Rick Boyko, chief creative officer of WPP Group's Ogilvy & Mather North America, invited young Hispanic shop LatinWorks to join Ogilvy's Syndicate, a loose affiliation of smaller, entrepreneurial agencies that work on creative projects with Ogilvy. Working on shared client Miller Lite, Ogilvy liked one of LatinWorks' four new Hispanic spots so well that it's been converted to a general-market commercial. Breaking in February, the spot opens with three Latin guys drinking beer as they take a women's magazine quiz on "How do you know he's good in bed?" They uncomfortably flub "cooking with exotic spices," then ace "has a dog" and reward themselves with beer for passing the sexual prowess test.
"We don't want them to just be multicultural," Mr. Boyko says of the Syndicate's first Hispanic member. "We want to be able to use them on other assignments."
At the holding company level, Bcom3 hopes to become a one-stop shop with its new multicultural holding company Pangea and multicultural media specialist Tapestry. Pangea's Asian affiliate New-A, New York, is casting its multicultural net even wider by opening an office in Paris.
"There's definitely a growing and expanding ethnic population in Europe," says Atsuko Watanabe, New-A's chief operating officer. "Within Western Europe there are about 3 million Asians, with established media."