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Black buying power: watch where you spend your money

David Alexander | 8/17/2011, 5 p.m.

How much do most big corporate advertisers respect the African American consumer--25 percent, 15 percent, 5 percent, or 1 percent?

If you guessed 1 percent you were wrong. It's less than that--.68 percent, to be exact.

Of the $263.7 billion spent annually on advertising within the nation, less that 1 percent is used to target African American consumers, despite the fact that Black buying power is estimated at around $857 billion, according to the 2010 census.

Ken Smikle of Target Market News notes that "the largest single investment corporate America makes is advertising," but only a trickle is spent targeting African American consumers, a group that has been and continues to be underestimated, underserved, disrespected and misunderstood.

Pepper Miller, co-founder of the Hunter-Miller Group, a multicultural marketing firm, and co-author of the book "What's Black About It?" explains that one of the most common misperceptions advertisers have is that mainstream publications will reach all possible consumers. Since most African Americans speak English, they generalize, there is no need to market outside of the mainstream publications.

"Marketing is about segmentation, diversity and understanding who your customers are," counters Miller, who has devoted many years to the field of diverse marketing. But why do advertisers feel that way when these facts are taught in most marketing classes, and when it is known that most African Americans generally distrust the mainstream media?

A 2008 study by Radio One entitled "Understanding Black America" revealed that only 13 percent of African Americans trust the mainstream media, and out of 29 million Blacks, only 2 million can be reached through mainstream publications.

In fact, there is a long history of corporations and organizations using Black newspapers for free press exposure while committing only a paltry amount of their vast advertising budgets to support the same papers that have opened up valuable editorial space to them.

A similar type criticism was lodged against Toyota by the National Newspaper Publishers Association (NNPA) earlier this year. The NNPA alleged that when Toyota's image was hurt by devastating recalls a couple of years earlier, the Japanese car maker sought help from the Black press to restore the brand's image and to encourage African American loyalty. The NNPA charged that Blacks stood by Toyota to the tune of $2.2 billion. However, in its $1.6 billion 2011 advertising budget, Toyota allocated only $20 million to be shared by all African American media, including newspapers, radio and television. And when Toyota ran ads thanking American consumers for remaining loyal, none of the thank-you ads ran in the African American press.

R.L. Polk & Co., an automotive marketing research firm, says African American consumers represent almost 10 percent of Toyota's U.S. market share, with 15 out of every 100 automobile purchases by African Americans being a Toyota-made automobile.

Unfortunately, the slighting of African American media is a problem even among Black advertisers. The NAACP, the oldest and largest of civil rights organizations, ignored Black publications in advertising its annual Image Awards extravaganza. When doling out its advertising dollars for the event, the organization chose to utilize only mainstream publications. As a result, NAACP president and CEO Benjamin Todd Jealous was the target of much criticism from the Black press. Jealous claimed it was a "grave" oversight. "I am very sensitive to the need to support Black community newspapers. They are the only way to assure Black readers in a given community that you actually want your ads to reach them directly," he said in response to the criticism.