December 18, 2020
A recent study conducted by the CMO Council found that approximately 67 percent of U.S. marketing executives surveyed said their CMO had high-level support and buy-in for multicultural marketing efforts, but less than one-in-two (45 percent) said their CEO did not believe multicultural consumers were critical to their growth plans. This lack of top-tier support translates into a de-prioritization of multicultural programs across corporate America. The study also found: (1) about half (51 percent) of marketers in the U.S. reported having too many competing priorities within their organizations; (2) only 20 percent of marketers deemed multicultural strategies mandatory and unanimously embraced across their organization, and (3) just over 25 percent believed that multicultural consumers were mission critical for their organization. Are you surprised by these findings?
Marketing in the United States is currently at a crossroads. The U.S. advertising and marketing industry is encountering an unprecedented inflection point spurred by the convergence of demographic and business forces that will require all corporations to reconfigure their marketing capabilities. Those that adapt will not only survive—but thrive. Those that don’t will become obsolete and suffer the consequences. Corporations have two options: Follow the status quo and ignore change at the risk of monetizing the current business paradigm, which over time will lead to self-fulfilling failure, or adapt to the changing environment and develop new capabilities that can serve as the basis for self-fulfilling success.
The Big Shift outlines a strategic framework that brand marketers can use to successfully navigate through this inflection point and grow their business with U.S. Latinos and other multicultural consumers in the 21st century. The proposed framework draws from the dynamic capabilities literature, which posits that companies must adapt, renew or reconfigure their current resources and capabilities to industry — that must align with a multicultural America. The framework is based on a number of key factors:
1. Understanding paradigms and paradigmatic change. The Hispanic Marketing Paradigm is a set of concepts and beliefs, including best practices, research methods and industry standards that have shaped marketing to U.S. Latinos for more than three decades. I propose that the Hispanic Marketing Paradigm is an outdated model and companies that do not make the sufficient and necessary changes are likely to face business declines.
2. Understanding the bicultural Latino. For more than 30 years, the Latino advertising and marketing industry (ad agencies, media publishers and trade associations) has depicted Latinos as a linguistically and culturally homogeneous niche segment. This is an oversimplification of U.S. Latinos. I propose that marketers must replace the aggregated, Spanish-language-centric view that has defined Latino marketing for decades with a broader, more nuanced approach that reflects the duality of the entire Latino population.
3. Create new models to improve media ROI. The Nativity-Based View is a new media buying and planning methodology for U.S. Latinos. Based on data science, our research has found that nativity (not language) is a better predictor of what Latinos consume in media. Between 70 to 80 percent of Spanish-language linear television does not reach Latino Millennials, and an estimated $1 billion dollars have been misallocated in Spanish-language television attempting to reach this demographic. The Nativity-Based View challenges the central notion that Spanish-language television is the “best way” to reach U.S. Latinos.
4. Question in-culture marketing in a multicultural America. Popularized in the early 1990s, in-culture marketing has served as the foundation in Latino marketing, unifying media publishers, measurement companies, advertising agencies, researchers and brand marketers. I propose rightsizing the cultural silo and elevating the multicultural population front and center of mainstream marketing. This means activating on brand-level insights that drive growth across all ethnic and racial groups. Think of it as total market with multicultural consumers at its core.
5. Develop measurement with granularity. Traditionally, U.S. media ad spend has been aggregated and calculated by adding all consumers together. This chapter introduces the Ethnicity-Race View (ERV), a new measure that reports KPIs by ethnicity and race. As the mainstream reaches a multicultural tipping point, marketers will need to develop new measures to account for all segments of the population.
6. Challenge our mental models and develop dynamic organizational capabilities, respectively. These two factors address important intra-organizational relationships. The link between mental models and organizational capabilities is a key part of the proposed framework, which helps address a number of issues that affect process and strategy within corporations. I propose that corporations will need to make a shift in how they operate in order to achieve a strategic fit between their internal resources and capabilities and the opportunities in the external environment. This internal transformation must be initiated by senior leadership, cascading across all levels of the organization.
In closing, the business case for diversity is well-documented. The biggest barrier to change in the advertising and marketing industry is change itself. Change is disruptive and oftentimes fatal to those organizations whose business model lags the changing demographic and business landscapes. Today, New York is 68% multicultural. Los Angeles, 73%. Miami, 90%. America is a multicultural nation, right now. Brands win or lose market share at the hyperlocal level—where consumers and products meet. There are leaders, followers and laggards in every business category. With our help, Corporate America will be ready for a multicultural America, no matter where they are today.
Dr. Jake Beniflah is the currently founding Executive Director of the Center for Multicultural Science, a non-profit, non-partisan multicultural marketing research think tank and data science accelerator. He is a nationally recognized thought leader, ad tech innovator and the founding editor of the Journal of Cultural Marketing Strategy. He is an expert in Latino marketing with more than 25 years of marketing, research and consulting experience in the United States and abroad.
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