al berrios & co. CONSUMER STRATEGIES REPORT 09.02.03: Is There Really A Need For Ethnically Focused Agencies?

[1] UPDATES: Events
[2] OUR EVENT: Executive Panel Series: Advertising Researching & Actionable Data - Is There Really A Need For Ethnically Focused Agencies?

"It is very important to remember what other people tell you, not so much what you yourself already know." - John D. Rockefeller, Sr.

Good morning execs,

Welcome back from your vacay. These last 2 months have been incredibly busy. In addition to a homepage re-design (returning to our simple-look roots to make it easier to find our ever expanding content), we've hosted 4 panels on advertising research, pitching & closing customers and clients, entrepreneurship and advanced negotiations, and career development for all job-hunters at all stages of their careers. (Advertising research is covered here today. Check our site at later in the week for reports on the rest.) We were there for a culturally unique art gallery opening (also to be covered in a later report).

And we attended the CRM conference at the Javits in NYC (which should have been called Microsoft's, SAP's, and Siebel's Conference instead of the DCI CRM Conference. It was the typical overpowering showmanship you'd expect, and that's it. The other few exhibitors were largely forgettable, with some exceptions of course. But what irked me most was that this particular event fails to attract large scale attendance. It appears that the world of CRM has been firmly relegated to a technology field, best left to the least creative of us all. I strongly disagree and feel that marketers who profess to know everything there is to know about marketing should strive to understand CRM better if this accountability thing really means anything to you, or at least to avoid getting replaced by a slightly more competent, but equally as ineffective, lower-paid college grad. This event was just not worth mentioning in a full-blown Trade Event Report. It gets one "+".)

As you may already know, I will be presenting our research methodology to the public on Monday, September 22, 2003 at the Advertising Research Federation conference in NYC, using HBO vs. Showtime as the backdrop and discussing new consumer insights and strategic recommendations based on this insight. You gotta go.

In the meantime, I am preparing an amazing line-up of panels and forums for you this fall, including the one being promoted right now on our site, "How To Spend One Hundred Million Dollars Reaching Consumers and Other Marketing Not In Textbooks" for Thursday, November 6th, from 6pm to 8pm, featuring senior marketing executives discussing what they've learned and how they apply it to spending their enviable budgets. The rest will be panels on effective advertising and public relations, journalism, communicating with investors, the entertainment industry and the diverse consumer, so please stay tuned for details. All of our events are always free and hosted at Baruch College's Zicklin School of Business, where I am an adjunct. All education should be free, right?

Enjoy your REPORT!


Executive Panel Series: Advertising Researching & Actionable Data - Is There Really A Need For Ethnically Focused Agencies?

> The ROI, Always
> Researching The Ethnic Consumer
> Is There Really A Need For Ethnically Focused Agencies?
> Biographies

I originally believed that research wasn't that important in an ad agency environment, where creativity reigns supreme. That's why I'm an advisor, because I enjoy having an opinion that's informed. And since creativity is subjective, what ad agency person would defend researching?

At an industry conference I attended, L.A. Reid, chairman and CEO of Arista Records stated to the audience that all the research he's paid for amounts to nothing, because in the end, it's all gut instincts ("RollingStone Youth Culture Conference"). This sentiment is prevalent in all creative industries and it is unfortunately a leading contributor to the creativity being perceived as a commodity, which any buffoon with a pencil can enter. This perception has further lead to an industry currently perceived to be producing lackluster product by the very buyers - advertisers.

If they had a choice, would advertisers prefer their agencies have more creativity or do they value research more? This panel, called Advertising Research & Actionable Data, was set up to prove or disprove this belief. As the discussion progressed, it turned into a discussion about the diversity of consumers being reached, but ultimately concluded definitively that advertisers value a mix of both, but to get both right depends on the consumer being reached and the ad agency's interpretation of insights learned from research.

The ROI, Always

Research is valuable because it's the closest thing we have to quantify the value of creative. Clients need a return on investment on creative, and research provides that. "Creativity cannot exist in a vacuum", said Simone Harris, Associate Research Director, UniWorld Group Inc. Roberto Ruiz, Partner / Online & Relationship Marketing, The Vidal Partnership, put it more perceptibly when he said that research is a competitive tool and clients that go that extra mile (i.e. usage & attitudes testing, friendship groups) clearly understand that better. More than that, though, research is a risk mitigating tool, and clients that understand how to use it most effectively tend to get copied by the rest of their peers.

The focus group is still vastly utilized, even though more effective means exist to extract information from consumers. What is unfortunate is that this approach is used more as a familiar and calculable tool by clients than as an actual foundation for creative. With many research projects, there's always a person who, whether they're familiar with the results or not familiar with any other research approach, feels the focus group is the last and only stop on their road to understanding consumers. "Research mimics reality in a microenvironment", and often, that leaves out important variables, said Mr. Ruiz. Unsurprisingly, many a great creative has been neutralized by the water-downing effects of focus groups.

It is the researcher's responsibility to advise on the most appropriate means of gathering data, but since the client is paying, should the researcher simply cater to the client? No, the researcher should do what they were hired to do, because ultimately, it's the client that makes the decision whether or not to accept the researcher's advice.

Researching The Ethnic Consumer

Baruch has the distinction of being one of the, if not the most diverse campuses in the country, representing over 90 different countries, cultures, religious backgrounds, etc. It was therefore unavoidable that the subject of researching non-"Anglo" consumers would emerge. Since our panelists were experts with Hispanic and African American consumers, our discussion leaned towards specific insights about these consumers.

For example, Hispanics, by nature, are nice and won't always reveal their dislike of your product for fear of offending. They're also more likely to defer to males, to not step too far from the status quo. African American consumers like scale - the bigger, the more their perception improves amongst their peers.

However, both acknowledged that even within the consumer groups they specialize in, there are always sub-groups (all Hispanics are not Mexican, but Puerto Rican, Dominican and all African Americans aren't from Africa, but Latino, Haitian, etc.). As a result, Mr. Ruiz advises clients to "Go beyond language and look at mindset". And this is where things got interesting.

One male and female member of the audience who are both Latino expressed their comfort amongst their African American and Caucasian friends and if they were to go to the country of their parents, they would feel uncomfortable and awkward amongst people of their similar ethnic background. Does this mean they're not Latino?

I made a further comment, that if I were raised in a predominantly Asian neighborhood and took into me all of their customs and mannerisms, even being exposed to Asian-targeted media, would I be considered Asian?

This boiled the conversation over into a debate on race and how, no matter what, a black person will always be black and a white man will always be white, and no amount of exposure can change that. However, after having just discussed the difficulty in broadly targeting all Hispanics, African Americans, etc. based on ethnicity, a more effective commonality was determined to be their mindset. Therefore, my question wasn't based on whether I am ethnically Asian, but rather of an Asian mindset?

It is human nature to want to be around things and people who are familiar to us. This may appear like racism, but it's a mechanism that has developed to help us cope with change. It unfortunately also influences us. And this influence is what turns into racism, because it can become difficult for us to accept anything not in the image of what we are familiar with. However, because our world has gotten smaller, similarity can also be of like minds. "Black conservative Republicans think the same as white conservative Republicans, says Ms. Harris. A Hip Hop lover in Japan prefers a lot of the same things a Hip Hop lover in Germany prefers. As a result, like the two prior members of the audience stated, it's not their skin color or ethnic background that serves as the platform for their interactions with others, but their mindsets. This trend has increased in the last decade and will continue to increase. And if this is true, is there really a need for ethnically focused agencies?

Is There Really A Need For Ethnically Focused Agencies?

As professionals who get paid for their expertise with ethnic cultures, my question stunned the panelists, however, it's where we were headed. If we had just spent the last 30 minutes discussing how ethnicity means very little and mindset and lifestyle are the optimal ways of developing relationships with consumers, is it even cost-effective to divide consumers by ethnicity?

Naturally, both panelists said yes, however, it all came back to the need for clients to gauge the effectiveness of their marketing investments. Since measuring is still relatively primitive, based largely on Census data and Nielsen, psychographic measuring of marketing performance is near impossible. We segregate because most of the time, all researchers have to go by is age, sex, and geographic location, and thanks to our natural tendencies to segregate ourselves, and let's not forget decades of ethnic steering, it's a pretty safe rule of thumb to evaluate your ROI by ethnicity.

In addition, mindset marketing is still virgin territory. There are few experts in the field and accountability is still an issue.

But as we were concluding, I felt that a more pointed question was necessary to illustrate the panelists' point: what exactly is an African American culture today, when many of the black people in our personal lives aren't fresh off the boat from Africa, but, as pointed out earlier, Haitian, English, or even Spanish? "In a salad, tomatoes maintain their identity, even though they're part of a salad", said Ms. Harris and Mr. Ruiz (they use the same line). And in a society where we are all capable of sharing each others' mindsets, there are still idiosyncrasies and cultural cues specific to black people. No, not that all African Americans love Hip Hop and bar-b-que, because everyone loves those things, too - those are stereotypes. It's something more indescribable, but clearly identifiable by members of the same cultural background.

(Editors' Note: This was a very difficult question posed and the panelists handled it brilliantly. But I posed it to prove my own personal views on the subject, more than allowing them to expound on the virtues of their respective agencies - that there isn't a need for ethnic specific marketing. After all, if what defines African Americans are shared experiences, foods, preferences, and even nuances in their language, then anyone exposed to these same things can be defined as African American, even if they were ethnically Asian. And skin color isn't a strong enough definition since depending on what part of the world you're from, your skin can also be dark. Unlike Arabic culture, where there are clear, distinguishable characteristics, African Americans are increasingly become acculturated in the United States, and vice versa. Perhaps a few decades ago, it may have seemed culturally shocking to see a billionaire African American or golfing wunderkind who is black, however, as consumer perceptions of skin color dissolves into mindsets, and civil rights keeps on keepin' on, we are still left with the conundrum of defining, and even more, defending the need for, the African American culture and categorization that advertisers believe still exists.)


Roberto began his career in marketing and business development in 1988 at Pillsbury Venezuela. Before moving to the U.S., he held senior brand management positions at Gillette and advertising positions at ARS/DMB&B Advertising. In the U.S., Roberto held senior marketing positions in charge of Hispanic and Latin American marketing at MCI Telecommunications and MoneyGram. Before joining The Vidal Partnership, Roberto was Director of Ethnic Marketing for Prodigy Internet, where he developed and launched the first fully-bilingual Internet service provider in the U.S.

Simone Harris has over ten years experience in advertising, market research, ethnic marketing and account planning. Ms. Harris has worked at General Market advertising at Lowe and Partners SMS in the account planning group, research firm NorthStar Interactive as a Senior Research Analyst where she provided a variety of clients with online focus group, online survey and syndicated study expertise, then as a Strategist at, one of the top interactive agencies in the world, assisting clients in achieving their interactive goals by translating their business needs to specific interactive functionality and features. Ms. Harris is currently the Associate Director of Research at the UniWorld Group, a Multicultural advertising agency. As the voice of the African American consumer, she provides consumer insights and creative briefs primarily for the Ford and Proline Hair Care accounts.

> "Why are whites and blacks considered different segments to target?"


Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2001-2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.


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