This document discusses the growing importance of integrating multicultural capabilities into marketing agencies. It outlines three forces driving the multicultural market: 1) growth of the U.S. multicultural population, 2) multicultural consumers changing general market trends, and 3) multicultural consumers themselves changing. It also describes two industry trends: ethnic ad agencies falling behind on digital capabilities while large general market agencies build multicultural skills. The key takeaway is that multicultural marketing will become a core capability of full-service agencies, representing both a disruption and opportunity for those who adapt.

1. Integrating Multicultural
Capabilities into your Agency
Multicultural Marketing in the Digital Age:
October 17, 2010

2. Overview
• Introduction
• 3 multicultural market forces
• 2 industry trends
• The big [multicultural] takeaway
• Your opportunity and challenge

3. introduction

4. a little about me

5. • I’ve been working in advertising for the
last 10 years
• My background :
– Economics
– Digital technology
– Management consulting
• I kind of stumbled into this business…
Jose

6. … and I’m one of the few people you’ll meet
that runs a successful ad agency that never
worked in advertising before.

7. my story explains a lot
• 1998: I left a consulting career to start a
Hispanic-focused dot com
• Since that day, I found myself in the
middle of a transformation of the
advertising industry

8. my agency
• I started Sensis in 2000 2 days after
shutting down my dot com
• Sensis was started to address a
small gap I saw in the ad business
during my dot com days
• During the last 10 years I’ve realized
that “that little gap” was actually
bigger and more transformative than
anything I could have ever imagined
in 2000

9. Sensis story

10. clients I’ve worked with…

11. agencies I’ve gotten to intimately
know…

12. But everything about me and Sensis always
comes back to a simple story:
What happens when digital and
multicultural get so big and transformative
that they can no longer be nicely packaged
as marketing specialties?

13. 3 market forces

14. The growth of U.S. multicultural
market

15. let’s start with some definitions
• Multicultural markets = various minority
groups
– Hispanic
– African American
– Asian American
– GLBTQ
– Other
• Middle Eastern, European, South Asian, Native
American, Disabled, …

16. Minorities makes up over 35% of the U.S.
population

17. 65%
16%
12%
5%
2%
White
Hispanic
Black
Asian
Multiracial
Multicultural America
Source: U.S. Census Bureau

18. Multicultural buying power
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2008 2013
$951
$1,491
$913
$1,213$269
$429
Asian
African-American
Hispanic
In billions… with a “B”

19. How did we get here?
• Unprecedented immigration spurt of the
1980s
– Similar to that of the early 20th century
– Both have fundamentally remade the ethnic
landscape of the U.S.
• 83% of U.S. population growth during last
decade came from minorities**
* Source: Professor Jacob Vigdor, Duke University
**Source: Brookings Institute

20. By 2048 the minority will be the majority
Source: U.S. Census Bureau

22. in 13 years 50% of Americans under 18 will be
minorities
Source: U.S. Census Bureau

23. Multicultural consumers are
changing the general market

24. They are young

25. Young consumers that are:
shaping popular culture
color blind

26. They are shaping the mainstream:
setting trends in food, fashion, and music

27. Salsa and ketchup

28. "leading with ethnic insights"

29. Multicultural consumers are
themselves changing

30. A majority are now U.S. born

31. Multiracial Americans are now the fastest
growing U.S. demographic group (5.3 million)

32. And digital is changing the game…

33. Multicultural and digital
• early adopters of new technology
• leading consumers of online content
• highly receptive audiences for online
advertising

34. Hispanics and Digital
• 24.6 million consumers
– More than half (54%) of U.S. Hispanics use the
Internet
– Internet access growing at a faster rate (13% since
2004) than among any other group
• Total purchasing power of $900 billion
• The mobile device is an important point of Internet
entry for Hispanics
– They are heavy “data plan” users
– Over-index in advanced mobile usage
• Hispanics spend more time on social media sites
than their general market counterparts

35. African Americans and Digital
• 30 million African-American online
– Nearly 80% of all African-Americans are
online
• They are also among the early adopters of
the mobile Internet

36. Asians and Digital
• 14 million Asian Americans online
– Internet penetration nearing 80%
• market is complex and difficult to
reach, due to the wide range of original
nationalities, subcultures and languages.
• Internet provides the greatest opportunity
for micro- and macro-targeting consumers
in this market.

37. 2 industry trends

38. Ethnic ad agencies have fallen
behind

39. Ethnic ad agencies are stuck in the analog era.

40. Digital is passing them by
• Only 5% of all Hispanic media spend goes
online

41. Digital is a division
• Most ethnic ad agencies still treat digital
as a division
– “Digital Director”

42. Lack of sophistication
• Most media spend goes to Top 3 “ethnic”
digital platforms
– Hispanic:
– African-American:
– Asian:
– GLBTQ:

43. Large general market agencies
are building multicultural
capabilities

44. In the last 12 months

45. Draft FCB has formed a multicultural unit

46. Home Depot has moved their Hispanic
business to their general market agency, The
Richards Group

47. Burger King moved their Hispanic
advertising to CP+B

48. The big [multicultural]
takeaway

49. My thesis

50. New definition of “full-service”

51. Multicultural marketing will become an
integrated capability of full service agencies

52. A disruptive change

53. Rapid, chaotic change usually means an
opportunity for businesses that can see and
exploit it

54. New business models will emerge
• Remember Napster?
– The record industry tried to fight
it
• Apple finally figured out how to
exploit it
– Tower Records died
– iTunes was born

55. Future advertising will look
different

56. Future advertising will look different
• But if you play close enough attention,
you’ll see it’s already out there:

60. What this means for you

61. A huge opportunity

62. Adapt to this new model – embrace and
integrate multicultural capabilities

63. Starting tomorrow
• Leverage what you already have
• Make multicultural understanding and/or
background part of your new hire
evaluations

64. Starting next quarter
• Stop outsourcing multicultural work to
other agencies
• Make digital your entry point

65. It’s all about digital

66. This is where ethnic ad shops are opening the
door for you…

67. Digital Entry Points
• Social
– Multicultural over-indexing in social media
• Mobile
– Multicultural early-adoption of mobile
technologies
• Digital media
– Hispanics & African-Americans spend more time
online than with any other medium

68. A bigger challenge

69. You need to quickly figure out and make
multicultural an integral part of your agency

70. How quickly?
• Depends on what type of agency you are
(and hope to be)
– National?
– Regional?
– Industry-focused?
– Discipline-focused?

71. THANK YOU!
@jrvilla
www.linkedin.com/in/josevilla
www.thinkmulticultural.com
jrvilla@sensisagency.com