Internet.com (April 7, 2001)
News organizations in the past few weeks have been busy reporting that the latest census figures show a huge increase in the nation's Hispanic and Asian populations.
But the fact that America's complexion is changing comes as no surprise to Internet marketers, who have been quietly building an industry to serve them.
"It's no longer a so-called 'mass market,'" says Jeff Lin, CEO of Admerasia, an advertising agency specializing in the Asian-American market. "There are African American markets, Hispanic markets, Asians, gays and lesbians, even children. And I believe that one of the beauties of the Internet is its unique ability to reach all of them."
Even as major Internet sites from Go.com to Inside.com scale back, consolidate or shut down, other portals that serve specific ethnic groups are gearing up.
"Up until recently, the broad assumption was that people of color weren't online, so it wasn't seen as relevant to ethnic marketing, but in the last 18 months you're seeing a 180 degree turn," observes Omar Wasow, president of Blackplanet.com.
Just as the Internet is changing the nature of marketing, the country's shifting population is dramatically altering the marketing terrain. In the past decade, according to the latest census figures, the Hispanic population has grown by a staggering 58 percent, drawing about even with African Americans. Asians, meanwhile, are expected to make up 10 percent of the population by 2050.
The shift is dramatized by news that whites now comprise less than 50 percent of California's population, throwing into question the very definition of the word "minority".
"Even with the economic downturn, we can see more and more opportunities for people to shift their focus to specific ethnic groups or specific channels to create more efficiency," says Lin of Admerasia.
When the 50 member companies of the Association of Hispanic Advertising Agencies (AHAA) gathered for their semi-annual convention in Phoenix last week, Internet marketing had a key spot on the agenda.
"Given the big number of Hispanics now on the Internet, it has become an excellent tool to talk directly to them," says Guillermo Paz, president of Populi Communications, a Hispanic advertising agency based in Puerto Rico, who was at the conference.
Lin's Admerasia agency is one of several retooling to tap the potential of ethnic advertising. It is has taken on a new name, New A, grouping subsidiaries focused on advertising, Web design, translation and marketing services aimed at the Asian American audiences and what are known as "emerging ethnic audiences", such as Eastern Europeans and South Asians. Multicultural marketer Muse Creative Holdings recently moved its headquarters from Los Angeles to New York, and late last month advertising giant Publicis Groupe announced a major investment in two Hispanic specialty agencies to form Publicis Sanchez & Levitan.
One reason for the renewed interest in minority marketing is that with the growing population has come dramatically increased buying power.
Seventy percent of Asian homes have Internet access and 61 percent of Asians make purchases online, according to a study last year by Insight Research. Asians have the highest household income in the U.S. and a survey commissioned by San Francisco TV station KTSF found that 28 percent of Chinese households trade stocks online. Admerasia recently built a Chinese-language site for E*Trade to tap that wealth.
Perhaps more surprising are the figures for the Hispanic population. A study commissioned by AHAA found that 38 percent of Hispanics 16 years and older regularly use the Internet, spending almost 5 and a half hours online per week. Of this group almost a third have shopped online, with CDs, books, electronics and airline tickets the most often-purchased items. Overall, 60 percent of Hispanics have logged on to the Internet at some point.
"The old messages and stereotypes have to be updated a little," says Wasow of Blackplanet.com, which also operates Asianavenue.com and a new Spanish-language site, Mihente.com. "Market to them as <I>users</I> of digital culture not <I>victims</I> of the digital divide."
Major national advertisers from Citibank to Mercedes Benz are doing just that. Typical is last week's announcement by music giant BMG of a sponsorship deal with BET.com and 360HipHop.com that includes the creation of listening parties, dedicated chat rooms and exclusive interviews.
Such microsites within "minority" portals are becoming common as advertisers tap the Web's ability to develop one-to-one relationships with ethnic consumers. BMG had previously set up similar arrangements with Spanish-language Starmedia.com and PlanetOut.com, the leading gay and lesbian site.
"There's a core model in the black community of audience participation being central to the success of a venture, whether you're talking about Showtime at the Apollo -- where the audience is cheering or heckling someone on stage -- or a Baptist church," says Wasow of Blackplanet.com. "That kind of audience participation is really hard to do in traditional media."
But it comes naturally on the Web.
And it doesn't only work among African Americans. Paz's agency, Populi Communications, recently mounted a similar campaign for Budweiser among Hispanic consumers, using opt-in email campaigns to invite consumers to special events, mounting online cybercast parties and niche content, all within the boundaries of Spanish-language web sites.
"The Internet has affected our efforts in a very positive way," he reports. "It has given us the opportunity to be even more direct in marketing campaigns. Many brands have been able to pick up the strengths of the medium and come out with a very powerful message for Hispanic consumers."
Next week: Markets within markets
