US ad giants turn to multicultural marketing

01 December 2009

NEW YORK: Major advertisers including Coca-Cola, McDonald's and Procter & Gamble are all looking to multicultural marketing, as they seek to reflect broader shifts in the US population.

Coca-Cola has recently announced an ambition to double its revenues by 2020, which will require a highly targeted approach in its home market.

At a recent event for investors, Katy Bayne, Coca-Cola's North American chief marketing officer, argued 51% of teenagers in America now fall into the "multicultural" bracket.

This segment also delivers around a third of sales across the soft drinks specialist's portfolio at present, a total that is set to rise to 40% over the next ten years.

Baine suggested that "multicultural consumers are our core focus," meaning its media strategy cannot simply be based around a limited number of events during the year.

"It is no longer the Hispanic Heritage Month followed by Cinco de Mayo. We have 12 months of deep connection," she argued.

In 2010, the company will utilise its marketing activity surrounding everything from the FIFA World Cup to telenovelas as it seeks to heighten its appeal to different communities.

McDonald's, the fast-food restaurant chain, currently generates around 40% of its US sales from African-American, Asian and Hispanic diners, with half of this group said to be under the age of 13 years old.

Reflecting the importance of this customer base, the Oak Brook-based firm looks to this audience more than any other in its focus groups, and claims to have produced more engaging advertising as a result.

Neil Golden, chief marketing officer, McDonald's USA, added that "consumers more and more are not only accepting, but embracing, diversity and embracing it in lifestyle and in food."

The quick service specialist often weights the budget behind ads to match the US population, directing 15% of expenditure to Hispanic communications, 12% to targeting African-Americans, and 5% to initiatives mainly for Asian consumers.

It has also established a series of specialised metrics for its advertising agencies, in order to assess if their output "delivers against ethnic insights."

State Farm, the insurance provider, found in research that young people of varying backgrounds now have more common interests than ever before, and has adapted its strategy accordingly.

It recently utilised a number of spots developed by Sanders Wingo, best-known as an African-American specialist, across the market as a whole.

Pam El, State Farm's vp of marketing, said "I think industry-wide, as America becomes more multicultural, you will see more ethnic insights across the board."

"I think you're seeing it already, but I think you'll see it two-, three, four-, five-fold going forward."

Procter & Gamble, the FMCG giant, is placing an emphasis on its agencies using a diverse range of suppliers – from production to casting companies – in order to keep up with the needs of the market.

In an email to its roster shops, Stew Atkinson, P&G's manager of global brand-building purchases, said a "tremendous opportunity remains" in this area.

The owner of Tide and Pampers plans to direct 16% of its US marketing expenditure to suppliers owned by women or members of minority groups over the fiscal year ending in June 2010.

"Supplier diversity is a strategy that enables P&G to remain in touch with consumers, customers and suppliers who are becoming more diverse every day," said Atkinson.

Barbara Hauser, of Procter's global marketing and design external relations division, continued that this activity is "part of the total value of

Data sourced from AdWeek, AdAge, MediaPost; additional content by Warc staff