Discovering Native America

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As businesses scramble to learn about some of the nation's fastest growing minorities, a handful are starting to wake up to the nation's oldest: Native Americans.

“Eight years ago, when you'd read about [multicultural marketing] in trade publications, the article would stop at Hispanics and African Americans. Now the articles are stopping at Asians,� says Michael Gray, president of Albuquerque, N.M.-based G&G Inc., the only full-service agency in the country that specializes in the Native American market.

Soon, he believes, marketers will discover the opportunities that lie in what he calls “Indian Country� — a term that describes the Native American population in the United States.

Today, Native Americans number 2.5 million — 4.1 million if you include multiracials, according to Census 2000 data. It's a relatively small segment of the consumer market, but one that's growing in wealth and in clout. In 1997, Native American businesses generated about $34 billion in annual revenue, up 179 percent from 1992. And last year, Native Americans spent an estimated $4 billion in off-reservation purchases.

This spending has been fueled by vibrant growth among Native American businesses, most notably, the $5 billion reservation-based casino and gaming industry. Although reservations have long been plagued by poverty, the success of casinos has created concentrations of wealth in reservation economies. In just one Midwestern tribe, Gray says, each member earned about $600,000 in one year.

But it's not only the casinos that have made Native Americans the nation's second wealthiest minority (behind Asians in median income). According to the Census Bureau's most recent Economic Census, only a small share of Native American-owned businesses are in the gaming and casino business (17 percent of Native American firms are in the service sector, which includes casinos).

In the service, construction and retail sectors, Native American companies are growing faster than U.S. companies as a whole. The $34 billion in revenue that Native American business owners generated in 1997 represents a 179 percent increase over 1992, the date of the last Economic Census. At the same time, the number of Native American firms increased by a staggering 84 percent to nearly 200,000, far outpacing the overall growth in U.S. firms, which grew at just 40 percent.

It's a wealthy market, and a market that's grown faster than expected. In January 2000, ahead of the Census 2000 results, the Census Bureau projected that the Native American population would reach just over 2 million, not much more than the 1990 census count of 1.9 million. But in 2000, Native Americans actually numbered closer to 2.5 million. When you also factor in the 1.6 million who chose “Native American� in combination with another race on their census forms, the Native American population climbs to more than 4 million — just about 2 percent of the total population.

Reaching this growing population is not as difficult as some marketers may think. Although more than 6 in 10 Native Americans live off-reservation, most rely upon a national Native American media, says Gray. While there is no Native American equivalent to Hispanic-targeted television network Telemundo, Native Americans have launched national radio shows and two national newspapers, including Indian Country Today, based in Canastota, N.Y. There are also several national magazines, such as Native Peoples, based in Phoenix, with a circulation of about 56,000. And of course, Gray points out, most Native Americans consume mainstream media as well.

Wells Fargo has successfully used print media and direct mail to pursue Native American consumer business, making the San Francisco-based financial services firm one of the few companies that has a marketing plan dedicated to this group. Although the bank has been serving the Native American business community for at least a decade, its initiative to reach these consumers is only 3 years old, says Steven L.A. Stallings, senior vice president at the bank. The choice to begin marketing to Native American consumers was a strategic decision to capitalize on the relationships it had built on the business-to-business side, says Stallings. Also, “there's not that much competition,� he adds.

But Wells Fargo and the few other marketers already targeting these consumers are sure to see a more crowded field soon. According to Gray, some of the nation's largest companies are expressing interest in this segment, including Anheuser-Busch Inc., U.S. Bank, The Coca-Cola Company and NBC. It seems that the nation's smallest market — and the one most neglected by marketers — is about to get a whole lot more attention.

Forecast is American Demographics' bimonthly newsletter devoted to census coverage. For a subscription, call 212-204-3877 or send an e-mail to [email protected].

Portrait of an Emerging Market

There are 4.1 million Native Americans in the United States. More than 4 in 10 consider themselves multiracial.

Source: U.S. Census Bureau, Forecast analysis

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