Where are the clients?

May 26, 2008

ASIAN MULTICULTURAL MARKETING "exploded" onto the corporate scene in the mid-1980s, when Asians caught the attention of the major telecom companies due to their high use of international calling services. As telecom innovation and offers expanded, Asian consumers remained important to corporate, divisional and regional "bottom lines" as tech-savvy early adopters of technology. In the late 1980s and early 1990s, financial services marketers began to recognize the potential of Asian Americans, in order to tap Asian market affluence, and the corresponding predisposition toward savings and investment. Today, the competitive media landscape within the financial services category in the Asian American market includes most retail banks, virtually every major insurance company, and many brokerage firms.

By the mid-late 1990s, the auto industry also woke up to research that highlighted that Asian Americans are the most likely to buy new (versus used) cars, the most likely to spend more on a car, and the most likely to buy luxury makes. This propelled a wide range of Japanese, U.S.-domestic and European car brands to develop Asian-targeted marketing and media programs to compete for Asian share of garage. In 2008, financial, automotive and telecom marketers remain the three most active categories in the Asian American market. According to Competitrack-the leading media monitoring service tracking Asian American media-these three categories, in aggregate, spent approximately $88 million in Asian print, TV and online media in 2007, a figure which, given the dramatically lower cost of Asian media, represents a volume of advertising equivalent to at least 10 to 15 times this amount in "mainstream" or general-market media terms. Over the years, a few other categories have also engaged Asian American consumers based on the unique consumption patterns and opportunities for their brands. Such categories include fine spirits, cosmetics, retail, and certain sectors of the pharmaceutical industry, to mention a few.

Yet still today, entire categories are nearly-or completely- absent from the Asian American marketing and media arenas, despite the obvious opportunity for brands in these categories. Some of the largest conspicuously inactive categories include:

Consumer Packaged Goods - broadly defined including packaged food, beverages, household products (paper/plastics/cleaning/etc.), personal hygiene, oral care, baby care,
OTC pharmaceuticals (analgesics/cold/vitamins/etc.), and just about everything else that consumers would find in a supermarket or a grocery store.

Interestingly, several CPG companies were first-movers and early "top-spenders" in Hispanic marketing in the late 1970s and early 1980s. Although over the years, a few brands have dabbled in Asian marketing with one-off "pilot" programs or corporate branding efforts, no major CPG company or brand has attempted to seriously, and consistently, stake its claim in the Asian market. Yet, per Simmons' NCS/NHCS Fall 2007 Two-Year Adult Combined Study, Asians overindex all consumers for usage of a wide range of CPG products at both the category and brand levels-for example, Clear bar soap (Asian index: 244), Dove soap (161), baby oil/lotion (137), Pampers diapers (189), Colgate toothpaste (128), "Eat Yogurt" (125), sparkling water/seltzer (124), lactose-free milk (172), soy milk (252) and many others.

Computer Hardware / Software/ and E-Commerce - Over the years, many studies have benchmarked Asian American computer use and online behavior. These include Forrester Research's Digital Melting Pot (1999), the U.S. Dept. of Commerce's Falling Through the Net (1999), the Census 2000 Current Population Survey (2000), the Pew Internet & American Life Project (2001), the Asian American Market Report (2005), Horowitz Associates' Broadband Content and Services Study (2007), and others. Such studies point to key summary conclusions: Asians are more likely than all other groups (including Caucasians) to have computers at home and to own laptops, and they are among the most mature users of the Web-with "maturity" defined as the number of years online, the amount of time spent online, and the propensity to research products online, purchase products online, and conduct financial transactions online. Yet today, not a single computer or software manufacturer markets directly to Asian consumers in the Asian media, and no major e-commerce brand in any category has launched consistent Asian American marketing and communications programs.

Travel & Leisure - As largely affluent and educated consumers, Asians are prime targets for the travel & leisure category. Per the last edition of the Travel Industry Association's The Minority Traveler report, compared to all travelers, Asians were 75% more likely than other travelers to travel by air, 67% more likely to rent a car, and more likely to engage in key leisure activities-gambling (50% more likely), cultural events (30% more likely), nightlife (25%), shopping (15%), and visits to historic sites/museums (14% more likely). Asians were also 25% more likely than other travelers to spend $1,000 or more at their travel destination (net of travel expense). Yet today, only the gaming industry and select airlines have targeted Asians with any consistent presence-the latter to narrowly promote international routes from the U.S. to key Asian countries. Untapped opportunity remains for airlines (to promote domestic travel, non-Asian international travel, loyalty and partner programs), hotel chains, car rental brands, regional rail lines, North American and overseas destinations, theme parks, cruise lines, vacation resorts, spas, and many, many others.

Luxury Goods - Including Watches, Jewelry, Apparel, Fragrance, Bags/Luggage, Accessories, and others Brand marketers in these categories already know well how important Asian consumers in Asia are to their brand health and future sales growth. Yet luxury brands still mostly sidestep the marketing and media channels in the U.S. that directly reach the affluent Asian American segments.

These inactive categories and others cite lack of attention to, or awareness of, key Asian market characteristics and research among their reasons for not targeting the market. Some brands that have considered Asian consumers may lack historical Asian consumer sales data, and therefore struggle to size the market opportunity. Still others have identified the magnitude of the opportunity, but face "budget priorities" in other market segments. But whatever the reason, one thing is clear: Until marketers make an honest attempt to understand and realize the potential of Asian American consumers, enormous value will be left on the table.

For marketers facing such challenges, the Asian American Advertising Federation and its member companies stand ready to provide expert guidance and counsel to facilitate Asian American market knowledge, insights and strategies, as well as the development of effective and efficient targeted marketing programs.

For more Marketing to Asian Americans coverage:
Marketing to Asian Americans
Research: Uncovering the Gold Mine
Asian Media: Reaching the Target, Reaping the Rewards
Roundtable: Opportunity's Knocking
Roundtable continued
Where are the Clients?