Magazine Online    The Authority On African-American Conventions, Incentives, & Leisure Travel
Issue: September/October 2013
Would Your Boss Fire You If She Knew You Were Leaving So Much Money On The Table?
By: Michael Bennett

Question:  How can any company ignore a community whose purchasing power is rapidly approaching $1.1 trillion?  It's a question that has baffled me for years.  A true capitalist couldn't possibly leave that much money on the table could they? 

Evidence suggests businesses, including travel and tourism operations are largely ignoring the African-American market.  Some don't want to spend marketing dollars on Black consumers.  Others simply don't put forth the effort.   And still others fall prey to advertising agencies that shun African-American consumers - more on that in a minute.

Travel, tourism and hospitality should be global leaders in diverse consumer marketing.  It's an industry that historically operates on thin profit margins.

Think I'm kidding?  Go to a hotel investor conference.  Much of the conversation is about revenues and profits - increasing RevPar (revenue per available room), higher occupancy rates, cost reduction, (translation keeping personnel costs down,) resort fees and rising room rates. 

This is not capitalism run amuck, or the "greed is good" crowd of Gordon Gecko.  These hoteliers have genuine concerns about maintaining or reducing costs and increasing revenues.

Destinations are a little subtler in their approach, but the objective remains the same, drive those visitation numbers up, thereby increasing revenues and hopefully profits.

The solution to shareholder financial demand is so simple it boggles.  Here's the answer to increased financial prosperity - ready for it - try marketing to African-Americans.

If the African-American market were a stand-alone country it would rank among the top 20 largest economies in the world in terms of purchasing power.

According to Nielsen's 2012 report; African-American Consumers: Still Vital, Still Growing: the number of Blacks in America reached 43 million, approximately 13.7 percent of the U.S. population. 

Since 2000, the total U.S. population experienced an 11.3 percent overall growth rate, while the Black population grew at 17.9 percent.

The U.S. Black population is larger than 163 of 195 countries including Canada, Australia, Argentina and Poland.

It's been a long held stereotypical myth that African-Americans do not have disposable income.  Do you know that Blacks are America's largest consumer group?  Yes we spend, and spend a lot, but you've got to act like you want us. 

Ten percent of African-American households have incomes in excess of $100,000 a year according to Nielsen and a 35 percent have household incomes exceeding $50,000 annually.

I recognize that's a lot of numbers to chew on, but I want to drive home the point that the African-American consumer is screaming for attention and we are easier to reach than one might think.  Don't believe me, here's what Nielsen had to say:  "The unique opportunity for engaging African-American consumers lies in a company's ability to make the consumer feel connected, respected and reflected as a viable consumer of a product."

African-Americans are voracious consumers of media, yet many companies mistakenly believe that because there is no language barrier there is no need to advertise to Black audiences through African-American media outlets.

Talk about missed opportunity.  You want to really know what Blacks think about advertising?  According to a Burrell Communications 2011 report, 91 percent of Blacks believe Black media is more relevant to them, and 51 percent would purchase a product where Blacks are positively portrayed.  And two-thirds of all Black consumers would like to see more advertising targeting Black consumers.

Robert Brown, former Carol H. Williams advertising agency executive says advertisers are simply glossing over the multicultural market.  "If advertisers would spend more marketing directly to African-Americans, almost all of it would go to the bottom line."

Brown believes profits across the travel and tourism industry would increase by as much as 15 to 20 percent if companies made a concerted effort to court African-American consumers and other racial and ethnic groups that make up the multicultural market.

That doesn't mean using general market advertising to reach African-Americans, it means designing campaigns with people of color in mind and marketing directly to them.

"Many companies are comfortable doing business as usual," says Brown.  But making minor adjustments to current marketing and advertising campaigns will pay huge dividends.

Brown advised one of his clients to change their general market commercial to one that included African-Americans.  The result was a five percent sales increase that went straight to the bottom line.

Here's a sad truth.  The combined spending on advertising across all Black media (television, radio, magazines, etc.) represents approximately 2 percent of total advertising dollars spent with general market media in 2011.

That level of advertising in Black media in a word is "pathetic."  Simply increasing those numbers to parallel the percentage of African-Americans in America (13.7 percent) would lead to a huge increase in market share for the companies bold enough to take the first step. 

But the lack of marketing and advertising to African-Americans isn't simply a reflection of big business and their ignorance. The advertising industry shares much of the blame.

The Madison Avenue Project, a project the advertising industry is loathe to discuss, found through extensive research a significant lack of African-Americans in management and creative positions.  The research found, as of 2010 that African-Americans suffered a 7,200 jobs shortfall in the advertising industry and were paid 20 percent less than their White counterparts.

The report made significant light of the coveted Super Bowl ads from 2010.  Of the 52 professionally produced ads that aired during the Super Bowl, all of the creative directors were White and only 6 percent were women.

As a long time travel and tourism professional and someone who's worked in entertainment, media, marketing and advertising; many of you have discussed these issues with me, off the record of course.

Many destinations and other businesses in our industry unwittingly hire advertising agencies that have few, if any African-Americans.  The commercials and ads they create typically don't reach the Black consumer, unless specifically demanded by the client. 

Why pick on advertising agencies?  Advertising along with media, marketing and public relations fall under the category of influencers.  These industries shape the hearts and minds of millions worldwide.

American-based ad agencies dominate the global stage and thereby have a disproportionate impact on consumers worldwide.  Leave African-Americans out of advertising or portray them negatively, the impact often lasts for generations.

The African-American marketplace beckons for those unafraid to increase their bottom line.  Research shows African-Americans are loyal and reliable consumers. Any sustained marketing and advertising effort will surely reap huge dividends and separate you from your competitors.
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