WASHINGTON– Companies that fail to advertise with black media are missing an opportunity to effectively reach nearly 43 million African Americans whose $967 billion annual buying power is projected to exceed $1 trillion in three years, according to the new study released by Nielsen and the National Newspaper Publishers Association (NNPA).
"Still the largest racial minority group in America, with a projected buying power of $1.1 trillion by 2015, Black consumers remain at the forefront of social trends and media consumption," the study found. The findings were released last week (Sept. 21) at the Congressional Black Caucus Foundation Legislative Conference.
"Since 2000, the total U.S. population only increased by 11.3 percent, while the black population increased by 17.9 percent, a rate that is 1.6 times the greater overall growth," the Nielsen study said. The report noted that the U.S. African-American population is larger than 163 of the 195 countries in the world, including Argentina, Poland, Canada and Australia.
"The average income for African-American households nationwide is $47,290 with 35 percent earning $50,000 or more," the report stated. Ten percent of African-American households earn $100,000 or more each year. The study noted, "The Black population and its aggregate buying power is overall more geographically widespread and more diverse than other ethnic and racial segments."
Cloves Campbell, chairman of the NNPA and publisher of the Arizona Informant, said: "Marketers underestimate the opportunities missed by overlooking black consumers' frustration of not having products that meet their needs in their neighborhoods. And companies that don't advertise using black media risk having African-Americans perceive them as being dismissive of issues that matter to black consumers. This report demonstrates what a sustainable and influential economic force we are."
Benjamin Jealous, president and CEO of the NAACP, said African-American readers give more credence to ads placed with black media than those that appear in the general interest publications. And the Nielsen research supports that view.
According to the report:
Ninety-one percent of African Americans believe that African-American media is more relevant to them;
Eighty-one percent believe that the products advertised in African-American media are more relevant to them;
Seventy-eight percent would like to see more African-American models/actors used in ads (51 percent said they would purchase a product if the advertising portrayed African-Americans positively);
Seventy-seven percent of African Americans said African-American media has a better understanding of the needs and issues that affect them;
Seventy-three percent believe African-American media keeps them in touch with their heritage;
Sixty-eight percent want to see more commercials directed specifically to African-American audiences and
Sixty-seven percent of African Americans want to see more advertising targeting African-American consumers.
NNPA President and CEO Bill Tompkins said African-American media plays a unique role in the African-American community.
"The general media does not cover us as well as we cover ourselves," he said. Tompkins noted that African-American media receives only 2 percent of the $120 billion advertising dollars spent with general media.
The top 10 companies advertising (in millions of dollars) with the African-American media were: 1. Proctor & Gamble (75.3), 2. L'Oreal (39.9), 3. McDonald's (34.9), 4. Johnson & Johnson (27.7), 5. Verizon Communications (26.3), 6. National Amusements (24); 7. Hershey (23.5), 8. Comcast (23.4), 9. General Motors (23.1 million) and 10. Berkshire Hathaway (23.1).
The top 10 advertisers spent a total of $321,892,840 with African American media in 2012, up 1.99 percent over 2010. Over that same period, the largest jump in advertising was Hershey (49.16 percent), followed by McDonald's (19.52 percent), Comcast (19.44 percent) and National Amusements (14.98 percent). From 2010 to 2011, General Motors advertising with African-American media declined by 30.45 percent and Johnson and Johnson dropped by 21.17 percent.
When asked why some companies are not trying to reach African-American consumers through the African-American media, Cheryl Pearson-McNeil, senior vice president for Community Relations and Public Affairs for Nielsen, said: "Some of it is that they just don't know." She added, "Just as you would not ignore an entire country...it's important that these corporations have this information at their fingertips."
In general, African-Americans are more brand-conscious than other groups and have other characteristics that give them clout beyond their considerable numbers. For example, African-Americans buy hand and body lotion at a rate that is 54 percent higher than the general population. They make more shopping trips than any other group and over index in such categories as mobile telephones.
The impact of African Americans extends beyond their immediate communities. The Nielsen study cited a report from Burrell Communications that shows 73 percent of whites and 67 percent of Hispanics believe African Americans influence mainstream American culture.
Jesse Jackson said, "It's not so much as what we spend with these corporations, but what they spend with us in trade."