How to target blacks? First, you gotta spend

P&G, GM, others aren't advertising heavily in African-American media

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Although hispanic ad agencies complain that marketers devote only about 3% of their ad budgets on average to reach Latino consumers, advertisers spend far less to target African-Americans.

Procter & Gamble Co., by far the largest advertiser to both groups, spent $157 million on Hispanic advertising in 2005 and $52.5 million in African-American media outlets, according to TNS Media Intelligence. General Motors Corp., the No. 2 advertiser in both rankings, spent $112 million on Hispanic advertising and $29.4 million in African-American media. Neither company returned calls for comment.

In its July issue, Black Enterprise magazine takes a look at those companies it says excel in reaching African-American consumers. As part of its "40 Best Companies for Diversity" report, the magazine's editors examined how companies use their marketing dollars to reach black consumers. They examined TNS data to see which companies spent most on black-owned and black-targeted media (see chart) and combined that with data gleaned from surveys sent to corporations to compile a list of the 10 best in marketing diversity. It includes: Altria Group; DaimlerChrysler Corp.; Ford Motor Co., Procter & Gamble Co. and Wal-Mart Stores.

Perceptions about diversity clearly vary. Only two of those companies appear on DiversityInc magazine's annual Top 50 list of the best companies for diversity, which is based on wider measures including CEO commitment and supplier diversity. Ford and DaimlerChrysler are Nos. 37 and 43, respectively.

"We tried to identify those companies that do a good job. Who takes black consumers seriously? Who embraces them?" said Alfred Edmond, Black Enterprise's senior VP-editor in chief. "Part of it is based on where they're spending, but not all of it."

He believes that the companies that tend to do the best in marketing diversity are those that are most dependent on individual consumers, because they're best attuned to the needs of their varied ethnic groups.

The Escalade

As an example, he points to GM, and how the company has capitalized on the Cadillac Escalade's popularity with African-American men. "The original market for sports-utility vehicles was suburban families," he said. "But GM found that the car was popular among single black men, and not only built campaigns around them but also produced products to appeal to them right off the assembly line." Noting that GM's chief designer, Ed Welburn, is the first African-American to run the design studio of any major automaker, he comments: "They have diversity all the way down the line."

Retailing behemoth Wal-Mart got on the list for initiatives launched earlier this year that aim to better serve its ethnic customers. About 1,500 of its U.S. stores are located in areas with "significant" African-American populations, and to meet the needs of those customers, the company is merchandising carefully. A newly opened store in Evergreen Park, Ill., just outside Chicago, carries an improved choice of ethnic hair-care products as well as a music selection that focuses on gospel, rap and other types of urban fare. Wal-Mart also plans to introduce an urban fashion brand called Exsto in 300 urban markets.

Mr. Edmond praises recent print ads from Wal-Mart. "One shows a black woman optometrist interacting with customers and her family and kids. It humanizes African Americans without homogenizing them. It also showcases some of their concerns, which turn out to be the same as those of the larger general market."

Still, Mr. Edmond cautions that even those companies that made Black Enterprise's list have room to improve. "We're talking about the best of the worst," he said, noting that many companies continue to ignore black-owned and targeted media, assuming they can reach African-Americans via general-market media.
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