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An advertising industry first, Ogilvy & Mather’s Cross-Cultural Report: Findings provide new model to help brands build value and relevancy for “The New General Market”.
Through the development of Ogilvy & Mather’s Cross-Cultural Report, we identified a major shift in the way we perceive and market to our clients’ customers. In the report we explain this shift and the manner in which we need to respond to it. The stakes are high. It’s no exaggeration to say that this is a change-or-die moment for many players in our industry. We believe that with this blueprint we are poised to prosper rather than perish. And we believe that David Ogilvy, who had great respect for the consumer and a deeply held belief in constant adaptation, would have approved.
After reading the Cross-Cultural Report you should understand the following:
1. The business case as to why brand and marketing leaders should shift their planning and investment approach for “The New General Market.”
2. The cross-cultural disciplined approach versus the current general market and multicultural marketing approach.
3. How the application of the Ogilvy & Mather Cross-Cultural Strategic Territories helps builds brands for The New General Market.
4. How the Ogilvy & Mather Cross-Cultural Matrix helps brands assess their current cross-cultural position and our approach for building brand value.
The Cross-Cultural ReportJeffrey BowmanCross-Cultural Practice LeadOgilvy Cross-Cultural Practice
ContentsIntroduction 2Contributors 4The changes roiling the industry 6Ogilvy Mather’s new approach:Cross-Cultural rather than General Market or Multicultural 17“How does the Cross-Cultural model increase the value of my brand?” 21Releasing the value of a Cross-Cultural brand 30About the author 34References 36
If you’ve paid even the slightest attention to popular culture in the last couple of years,you’re well aware of the television phenomenon Mad Men, a show about a fictionaladvertising agency set 50 years in the past. The story, of course, fills in the timeline ofAmerica throughout the 1960s via one set of highly creative (if also exceedingly hedonistic)ad men and the campaigns they create. There’s a rich irony to this. At precisely the timewhen America is besotted with its past, the future is threatening to run away from us.Over the last decade, both in the United States and globally, the advertising industryand marketplace have radically changed. Digital is the norm, social media is changingthe way we reach and have conversations with consumers, and agencies are turningtoward the emerging markets — Brazil, Russia, India, China — many believe will be theengines of global growth for years to come.At Ogilvy Mather, we too foresee a bright future for those fast-growing economies.But we’re equally excited about business right here at home. Ogilvy Mather seesa tremendous domestic opportunity — one that doesn’t depend on uncontrollable macro-economic factors or a zero-sum game among advertising combatants. Instead, we seea whole host of demographic changes in the United States that add up to a fundamentalrepositioning of what we call the general market — and that present compelling newpossibilities for growth. We call this new mass market “The New General Market” (TNGM). We’ve arrived at this important moment motivated by two factors. The first, as we explain below, is that outside forces are fundamentally changing the advertising world. The way Don Draper and his Mad Men cohorts did business is surprisingly similar, in some respects, to how present-day advertising is conducted — and that model is dangerously antiquated. The good news is that we’re ideally positioned to take advantage of a tidal wave of change: Ogilvy Mather has emerged from the global economic downturn in robust health. That leads us to the second reason for overhauling our model: We continually rethink the way we do things because we are Ogilvy Mather. In the year of our founder’s 101st birthday, we believe it’s important to reengage with some of David Ogilvy’s most enduring ideas. Specifically, we are driven by what David called “Divine Discontent.” There is no“good enough,” this idea says. There is always a chance to improve.We have happened upon a major shift in the way we perceive and market to our clients’cherished customers. In the following pages we explain this shift and the manner inwhich we need to respond to it. The stakes are high. It’s no exaggeration to say thatthis is a change-or-die moment for many players in our industry. We believe that withthis blueprint we are poised to prosper rather than perish. And we believe that David,who had great respect for the consumer and a deeply held belief in constant adaptation,would have approved. 3
The agency model is oldIf you watch Mad Men, you may be struck by one remarkable truth: Despite the outdatedsocial mores — the rampant daytime drinking and womanizing, the blue haze of cigarettesmoke drifting through the office — the fictional characters of Sterling Cooper Draper Prycestill divide up the marketplace the same way we do. A bit of history: The first ad agencycatering to the general market opened in 1843. A pioneering ethnic agency came onto thescene in 1956, creating the segmented structure to this day. The advertising industry stilldivides itself into general market agencies (GMAs) and multicultural agencies (MCAs),and our clients generally adhere to this model.What’s so different, and is this a problem?We’ll put it plainly: The bedrock industry practice of marketing to either general or ethnicmarkets has remained unchanged since the Eisenhower administration. This model hasleft us seriously out of step with the starkly altered demographics of the United States in2012. The American population has changed profoundly and will continue to evolve in theyears ahead. In fact, as these demographic changes grow in magnitude, the whole notionof what constitutes a minority must surely change.Demographic1980 Note: he population was divided into five ethnic segments — T White, Black, American Indian/Aleut Eskimo, AsianWhite83.1% American or Pacific Islander, and other races — untilBlack11.7% March 1989. Beginning with the 2000 census, HispanicAsian American 1.5% status was added to census forms, in recognition of the fact that Hispanics may be of any race. Thus, whileHispanic6.4% it is now possible to ascertain exact percentages of non-Hispanic minorities, pre-2000 figures do not allow2010 this distinction.White68.0%Black12.6%Asian American 4.8%Hispanic13.9%Point ChangeWhite-15.1Black+0.9Asian American +3.3Hispanic+7.4Parts of our model have, in fact, morphed to reflect America’s dramatically shiftingdemographics. Our business offerings now reflect the importance of Hispanics,Blacks, and Asian Americans and the Lesbian, Gay, Bisexual and Transgender (LGBT)community. However, as these segments have ballooned, the desire among clients forMCA services has grown as well, and agencies more specifically focused on those marketshave often been better positioned to meet those needs.But let there be no mistake: As the populations and spending power of minority consumerscontinue to grow, the model that divides business between general market and MCAs is 7
increasingly obsolete. If you listen in on the whispered conversations in client meetingrooms and agency huddles, you’ll hear people questioning the viability of this 60-year-old structure.And for good reason. In a recent survey, we asked chief marketing officers, executivevice presidents and directors of marketing a few questions about their level of satisfactionwith both the GMAs and MCAs with which they have worked. We found they weresatisfied with neither — primarily because of the agencies’ inability to deliver integratedcommunications across the two platforms.Question: On a scale of 1 to 5, with 5 being the highest, how would you rate your generalmarket advertising and/or marketing agency? 1 Rating: 7.1% The most common comments were “Did not bring real breakthrough 2 Rating: 21.4% ideas,” “Too tied to the process and politics” and “Did not drive things across channels to create a holistic, surround approach or really 3 Rating: 42.9% activate the idea.” Another was “Limited creative thinking; 4 Rating: 28.6% watered-down messaging to appeal to mass audiences.” 5 Rating: 0.0%We asked the same executives about their multicultural advertising and/ormarketing agency. 1 Rating: 50.0% Most respondents did not have an MCA of record and instead used one 2 Rating: 14.3% on a project-by-project basis. One comment was “Only focused on Hispanic market with same/similar messaging as general market. 3 Rating: 28.6% Not truly differentiated to meet the true needs of this target.” 4 Rating: 0.0% 5 Rating: 7.1%Moreover, clients are frustrated that they have to endure multiple and seemingly redundantmeetings and billings in order to solve a single problem: how to build the brand. And thateffort isn’t always translating into the proper execution. Clients have responded to thetremendous growth of the Hispanic market by shifting more of their budgets to focuson that audience; despite this trend, however, measured media spend for that populationactually decreased from 2008 to 2009 by nearly 5%.Spanish-Language Media Spend (in millions) Q3 ’08 – Q2 ’09 Q3 ’07 – Q2 ’08 Point ChangeNetwork and Cable TV $3,199.0 $3,265.8 -2.0%Spot TV $1,521.1 $1,753.3 -13.2%Spot Radio $569.0 $586.8 -3.0%National Magazines $146.7 $177.9 -17.5%Local Newspapers $88.6 $111.3 -20.3%Total $5,524.5 $5,895.0 -6.3% 8
The Black community saw even more of a disparity: Media spend for that market is downby more than 7%.Black Media Spend (in millions) Q3 ’08 – Q2 ’09 Q3 ’07 – Q2 ’08 Point ChangeSpot Radio $794.1 $851.4 -6.7%Cable TV $529.0 $495.7 6.7%National Magazines $452.0 $578.2 -21.8%Syndicated TV $45.2 $88.1 -48.7%Network TV $27.3 $31.5 -13.3%Total $1,847.6 $2,044.9 -9.6%This has left brands with a dearth of culturally relevant communications for variouscommunities, and the current agency model is not flexible enough to address the problem.In theory, GMAs speak to nearly 70% of the marketplace, and MCAs cover the remaining30%. In practice, overall media spend for the United States is tilted steeply towardthe general market: The media buy for that segment chews up 93% of a $117B industry.So, not only is the system clunky and frustrating for clients, it’s also increasingly ill-suitedto the task at hand. In a multihued nation, the advertising business looks alarminglymonochrome. As presently structured, everybody loses. Clients reach only part of theiraudience. Advertisers and marketers fall short of their benchmarks. The good news is thatall of this is avoidable, if we begin targeting The New General Market.% of World Population by Age50%45%40%35%30%25%20%15%10% 5% 0% 0-24 25-49 50-74 75-100+Target markets have changedGiven the dissatisfaction with — and obvious shortcomings of — the GMA and MCA model,it’s difficult to fathom how the old ways have continued to endure. There are valid reasonsfor the longevity of the status quo: Many GMAs have limited experience and skill in themulticultural space, and each type of agency naturally tends to feel protective of its ownposition. But there is one undeniable truth we can no longer ignore: A new general market 9
is forcing change in the advertising world, whether we’re ready for it or not. We are in themidst of one of the largest shifts in population and purchasing behavior in our nation’shistory. It’s time to adapt.OgilvyCULTURE introduced The New General Market in 2010 to create a distinctionbetween the old general market and multicultural advertising model and the newcross-cultural model we built. The New General Market recognizes the altered globaldemographics created by burgeoning populations of youths, of members of religionsoutside the Judeo-Christian tradition, and of women. Within the United States, as we’vementioned, the changes in demographics are just as compelling. According to 2010 censusdata, we have a population that looks remarkably different than it did 30 years ago.Here in the United States, The New General Market includes the Hispanic, Black, AsianAmerican and LGBT audiences, which make up a combined purchasing demographicsuperpower that now constitutes more than 40% of the population.US Race Ethnicity White 200.2 16% Hispanic 50.0 White 12% Black 37.6 Hispanic BlackAsian American 13.6 Asian American 4% Multiracial 65% Other 2% Multiracial 4.8 1% Other 2.8 0 50 100 150 200 Population (in millions) Percentage of Total PopulationIt is important to understand not only the demographic changes but also where thosechanges have taken place. Below is a look at how the demographics have changed in theUnited States since the 1980 census was completed.1980 Census, Hispanics 2010 Census, Hispanics 19% 14% 8% West 8% 52% South 42% Midwest Northeast 21% 36% 10
Starting with that census, Hispanics began to post record population gains. Growthin the Black community has been less dramatic, but that market has shifted in termsof geographic density.1980 Census, Blacks 2010 Census, Blacks 12% 9% 17% West 23% South 44% 56% Midwest Northeast 18% 21%When we analyzed the numbers state by state to compare the changes, the facts werearresting. More than 50% of the people now living in California and Texas are firmly inThe New General Market. These are our two largest states in terms of population, andtheir impact on elections, retail and education, as well as on media and advertising spend,should not be underestimated.2010 Census, Top 10 StatesRank State % Hispanic % Black % Asian American % TNGM1 CA 38 6 13 562 TX 38 12 4 533 NY 18 14 7 394 FL 23 15 2 405 IL 16 14 5 356 PA 6 11 9 197 OH 3 12 2 178 MI 4 14 2 219 GA 9 30 9 4210 NC 8 21 2 32We were also struck by The New General Market’s prevalence in America’s top 10 mostpopulous cities. In each of the 10, the combined populations of Hispanics, Blacks andAsian Americans account for at least 50% of the city’s total population. The New GeneralMarket accounts for more than 60% of the population in five of these cities, and inthree — Houston, San Antonio and Dallas — it comprises 70% or more of the residents. 11
2010 Census, Top US CitiesRank City State % Hispanic % Black % Asian American % TNGM1 New York NY 29 23 13 642 Los Angeles CA 49 9 11 693 Chicago IL 29 32 5 674 Houston TX 44 23 6 735 Philadelphia PA 12 42 6 616 Phoenix AZ 41 6 3 507 San Antonio TX 63 6 2 728 San Diego CA 29 6 16 519 Dallas TX 42 25 3 7010 San Jose CA 33 3 32 68We’re not necessarily surprised by these massive demographic changes — but we aresomewhat taken aback by the speed with which they have occurred, given that mostpredictions estimated they wouldn’t happen until 2050.These shifts should fundamentally alter our approach to the marketplace. As an agency,we can no longer afford to be put into a traditional general market box if we want tobe able to deliver relevant and effective communications and meet all of our clients’needs. In order to serve The New General Market in the United States, the marketingcommunications industry must change its service model, starting with the hiring ofa workforce that mirrors The New General Market.What do these changes mean to advertising?In order to effectively speak in a relevant way to The New General Market, we needto understand more than just the raw numbers. We must also fully grasp the changingpurchasing behavior of The New General Market. After all, the combined spendingpower of Hispanics, Blacks, Asian Americans and multiracial American communitiesis larger than the GDP of many global markets like Brazil, India, Spain, Russia,Australia and Argentina.Multicultural Buying Power 1990–2015 (in billions of dollars)1,6001,4001,2001,000 Hispanic 800 Black Asian American 600 Multiracial 400 200 0 1990 2000 2010 Projected 12
Looking closer, we are faced with an even more surprising realization. On a per-householdbasis, The New General Market outspent what’s considered to be the general market todayin most categories. While this makes sense once you think about it — all of the so-calledminorities combined now add up to a majority — the sheer size of the market is sobering.US Average Annual Expenditure Spending:White vs. Hispanic, Black and Asian American (in dollars)Categories White TNGMDifferenceTransportation 8,172 21,242 13,070Food 5,488 18,183 12,695Insurance Pensions 4,247 14,897 10,650Apparel 1,642 5,907 4,265Healthcare 2,588 5,829 3,241Entertainment 2,220 5,338 3,118Education 791 3,625 2,834Personal Care Products 536 1,625 1,089Furniture 427 906 479Alcohol 425 818 393Laundry Cleaning Supplies 133 448 315Clients are grasping the significance of this, particularly in the retail/shopper space, wherecustomer experience is a fast-growing area of interest. Unlike with traditional marketingcommunications via television, radio and print, advertisers can improvise a retail display-and-search model and test its relevance in real time. Today’s retailers see firsthand theeffects of shopper marketing and can gauge whether their stores and customer experiencesare speaking to the audiences they serve.Through the use of heat maps, some retailers and marketers are taking a precise approachto The New General Market. The maps below illustrate where the most dynamic changesare occurring across the United States.Hispanic Population Density 2010 Black Population Density 2010 13
Asian American Population Density 2010Media and The New General MarketAmerica’s sweeping demographic shifts will have an effect far beyond just the shopperexperience. For our purposes, the coming transformations in media and content holdthe most intense interest.To understand the impact of demographic shifts, we must first understand spendingpatterns past and present and use that knowledge to project how media will change.In addition to analyzing demographics in the nation’s largest cities, we analyzed thedesignated market areas (DMAs) that most media buying agencies use for targeting.The results were even more compelling. In nine of the 10 largest DMAs, The New GeneralMarket already comprises more than 50% of the population. The remaining DMA — Boston — is at 49%. It’s no wonder brands are scrambling to target their messagesto The New General Market.2010 DMA City % TNGM 1 New York New York 64 2 Los Angeles Los Angeles 69 3 Chicago Chicago 67 4 Philadelphia Philadelphia 61 5 Dallas-Fort Worth Dallas-Fort Worth 70 6 San Francisco- San Francisco- 56 Oakland-San Jose Oakland-San Jose 54/69 7 Boston Boston 49 8 Atlanta Atlanta 62 9 Washington DC Washington DC 63 10 Houston Houston 73To amplify this data, OgilvyCULTURE met with the industry’s top media and contentpartners and formed an alliance aimed at examining best practices and emerging offeringsfor The New General Market. One factor stood out above all else — the impact of thesenew demographics on technology, particularly on mobile and social media. 14
Advertisers and clients rightly look to digital as a way to create targeted and effectivecommunication. As the technology space formed in the 1990s, a digital divide emergedbetween the general market and several minority groups. People in the general markettended to have better connections to the Internet and greater access to email, andtherefore spent significantly more time online.US Internet Use by EthnicityEthnicity 2009 2010 2011White (non-Hispanic) 71.5% 70.7% 70.9%Black 11.5% 11.8% 11.8%Hispanic 10.9% 11.2% 11.6%Asian American 6.1% 6.3% 6.5%Other 1.3% 1.3% 1.3%This disparity persists in traditional Internet use, but has been erased in the realms of mobileand social media. The New General Market not only has caught up, but is in fact now thedriver of change in technology — one of the forces now shaping our culture. A study con-ducted by eMarketer found that nearly half of Black and Hispanic consumers reportedhaving used a mobile device in 2009, versus 28% of Whites. A study by Pew Research alsoshows that high mobile usage among minorities is not limited to online content. Black andHispanic users were more likely than Whites to participate in every mobile activity, fromsending and receiving text messages to taking pictures to playing games and accessing email.Mobile Content Used by US Mobile Device Owners by Ethnicity, March–April 2009(% of Respondents in Each Group)Response White BlackHispanicSend/Receive Text 40% 47% 59%Take a Photo 15% 22% 41%Play a Game 7% 12% 16%Send/Receive Email 13% 16% 21%Access Internet 12% 21% 23%Record a Video 2% 7% 8%Play Music 6% 23% 14%Send/Receive IM 6% 22% 14%Get Map/Directions 3% 4% 5%Watch Videos 2% 3% 5%Did One of These 50% 58% 70%Mobile and smartphones are now in the vanguard of the new advertising frontier.Advertisers and marketers are looking to develop relevant content for The New GeneralMarket, paying special attention to foreign-language sports, entertainment and lifestylecontent for Hispanic users. 15
But television remains the king of all media, whether it’s in the form of traditional digitalblack box viewing or online via Hulu®, YouTube® or one of the other streaming servicesnow available. One audience in particular leads all ethnic groups when it comes totelevision viewing: According to Nielsen, Blacks between the ages of 18 and 49 clock inat a whopping 7 hours and 12 minutes a day. That’s more than 2 hours per day above thenational rate of 5 hours and 11 minutes and nearly 4 hours more than Asian Americanswatch (3 hours and 14 minutes). In other words, The New General Market can be reachedonline, but not through a traditional PC. The best way to connect with them is via themost traditional channel, the television. 16
Ogilvy Mather’s newapproach: Cross‑Culturalrather than General Marketor Multicultural
The segment shifts we saw in conjunction with our aging agency model led us to reevaluatewhether Ogilvy Mather is increasingly trying to fit a square peg into a round hole.And this led us to consider how to position the agency for the next 50 years. We realizedthe question of GMA versus MCA is moot. The answer today is neither.If we examine why we believe the agency model is broken, we can see that it’s partlybecause of the way agencies and clients began to cheat at gathering insights.A bit more background: Prior to the 1980 census, the industry was comprised of GMAsand Black agencies — both of which were knowledgeable about their segments and thussuccessful. Once the 1980 census correctly predicted the ascendancy of the Hispanicpopulation, the marketing budgets began to follow. CONSUMER CONSUMER INSIGHT INSIGHT GENERAL MARKET HISPANICS BLACKS CONSUMER INSIGHTThis fully took hold after the 1990 census. The 1990s, of course, saw the introduction ofdigital, which cut even deeper into most US brands’ already shrinking budgets for theBlack segment. By the end of the decade, the line item for Black marketing had fullyvanished into the general market box. This begs the question as to whether brands andagencies are properly structured and planning correctly for The New General Market. CONSUMER CONSUMER INSIGHT INSIGHT GENERAL MARKET HISPANICS 18
When it comes to budgeting, most brands today consider only two audiences: GeneralMarket and Hispanics. We believe this approach fails to deliver insights that are culturallyrelevant across all segments (White, Black, Hispanic, Asian American and LGBT).The new approach that Ogilvy Mather is pursuing is cross-cultural. This new way ofdoing business enables us to mine both the general and various multicultural markets forinsights, wants and needs.General Market and Cross-CulturalMulticultural Marketing MarketingEthnic-based Total marketplanning budget budgetMultiple creative Comprehensivestrategies creative strategySiloed Integratedmeasurement measurementBetter targeting and service deliveryIn today’s advertising world, clients can face a dizzying array of ideas and input.Suppose they aspire to build their brand with five audience segments. To handle thiswork, they might have five different agencies creating research projects and creativebriefs and executing five distinct marketing plans — all for a single brand problem. CONSUMER CONSUMER INSIGHT INSIGHT GENERAL MARKET HISPANICS BLACKS LGBTs ASIAN CONSUMER INSIGHT AMERICANS CONSUMER INSIGHT CONSUMER INSIGHT 19
By contrast, our new cross-cultural marketing positioning enables an examination of the“old” general market and newly relevant Hispanic, Black, Asian American and LGBT audiences. This model will serve as a bridge between all marketplaces, leading not only to a more streamlined business but also to better targeting and product/service positioning.More relevant and effective advertising and communications Knowing that The New General Market will only continue to grow, we will be ideally poised to incorporate cross-cultural components when serving our clients. By incorporat- ing broader research and findings, we can generate creative briefs that are more informed and that firmly move Ogilvy Mather out of the general market box and into one labeled“total market.” Then we can measure our impact across all stages of the customer journey as well as across all consumer segments. Clients can focus on a comprehensive strategy that feels much more integrated and holistic. THE BUSINESS CULTURAL INSIGHTS COMMUNICATIONS PLATFORM ASIAN GENERAL BLACKS HISPANICS LGBTs AMERICANS MARKET CROSS-CULTURAL STRATEGYEstablishing the cross-cultural strategy requires significant investment and structuralchange for both clients and the agency. The responsibility for adapting this approach doesnot reside only within planning, creative, account and senior leadership; rather, it requiresinternal embedding and talent acquisition, development and retention as well as retooledday-to-day practices. Today we can deploy the cross-cultural strategy because of our talent,value proposition and partners. The payback for making this commitment promises to beprofound: Moving forward, we will be able to offer clients the opportunity to understandthe cross-cultural value of their brand and the methodologies for maximizing that value. 20
“How does the Cross-Cultural model increase the value of my brand?”
Taking a page out of David A. Aaker’s book published in 1991, Managing Brand Equity,we’ve developed strategic territories for how brands increase their brand value withThe New General Market (See page 25). We asked ourselves two questions: What definesbrand equity? How can brands increase their value?The question we pose to clients and brands today is: If the demographic landscape haschanged or the customers who have traditionally purchased products have changed or arechanging as we have demonstrated in previous chapters, what is the new way of buildingbrand equity and increasing a brand’s value?Over the last year we’ve been refining what we believe to be the future of building a brandand a consumer relationship, and measuring the relevancy of The New General Market.OgilvyCULTURE’s five key strategic territoriesIn order to develop our cross-cultural offering, we interviewed key clients and stakeholdersin both the current general market and multicultural spaces and augmented those findingswith desk research on the different ways brands are now targeting multicultural audiences.We found our research complicated by the shifting boundaries between the general and themulticultural markets. The clients we interviewed found it difficult to pinpoint a transitionpoint between their efforts to serve the two audiences.We analyzed the ways in which more than 100 brands were marketed to Hispanic, Black,Asian American and LGBT audiences separately. We eventually identified certain patternsthat we refined into five key strategies:Cultural Community™Cultural Currency™Cultural Authenticity™Cultural Confluence™The Cultural Loop™While we sought to avoid oversimplifying more than 40 years of multicultural and generalmarket executions, we needed a structured way of looking at how brands increase relevancyand equity measures over time. These five elements create that framework. Faced withtoday’s rapidly morphing landscape, in which brands are learning to engage socially andthrough new and emerging channels, we’re still working out how to deploy these tactics aspart of a broad-based cross-cultural strategy funneled through various channels and touchpoints along the customer journey. 22
The Cross-Cultural Strategic Territory Framework for Building Brand Relevancy and Equity • Heavy brand investment • rands with low relevancy and equity B measures within the segments Cultural Community • ong-term commitment and no “in and L Provides Value out” investments with the product or event to Customer by Enhancing • nce the brand is established, provides O Customer’s: high barriers to entry from the competition • elationship/ R Processing of Benefits • Low to medium brand investment • onfidence in C • rand with low relevancy and equity B the Purchase measures Decision • orrowing equity from an established B • roduct/Brand P Cultural brand/talent that has a relationship or Currency Satisfaction trust with the segments • rands receive immediate awareness B and consideration but do not establish high barriers to entry from the competition • Medium to high brand investment • sually unique and authentic value U The New proposition General • rand with high relevancy and low B Market Cultural equity or vice versa Strategic Provides Value to Authenticity Territories • equires deep levels of consumer R Firm by Enhancing: for Building commitment from heavy users of Brand Equity • fficiency and E the brand Effectiveness • sually results in attracting new users U of Marketing and loyal repeat purchasers Investment • Brand Affinity • Prices/Margins • eavy investment to build the brand H across all segments • Brand Association • sually the brand has high equity and U • Trade Leverage relevancy measures within one key segment • ompetitive C Cultural Advantage Confluence • he brand has a unique and ownable T value proposition • esults in significant trial and usage, R usually creating a larger loyal base of consumers • Medium to high brand investment • urpose-driven brand building for P The New General Market specific to the Hispanic, Black, Asian American The Cultural and LGBT segments Loop • uilds high brand relevancy and B equity measures • stablishes a deep relationship with E the segments and usually delivers brand loyalty 23
cultural community ™Participating in long-standing community-based cultural events and programsWithin many ethnic segments, people often strongly identify with community-basedevents that celebrate a shared identity and carry cultural value down from generationto generation. Take, for example, Calle Ocho, a street party staged by Miami’s sizableCuban American population; or the ESSENCE Music Festival, held annually inNew Orleans and widely attended by Blacks.These “for the community, by the community” events have traditionally served tostrengthen the fabric of cultural communities, bringing extended families and friendstogether around a common celebration to reinforce identity. For some brands, this isan opportunity to introduce the brand to the community. For others, it’s a means ofreinforcing their long-standing support. Either way, the barriers to entry are usually low,opening the door to the longer process of embedding the brand in community culture.Caters well to :Brands with low relevancy and low equity measures.Risk/reward:Depending on a brand’s levels of engagement — from, say, a sponsorship on the one hand,to dedication of human resources and other forms of more tangible participation on theother — it runs an expected risk of low initial payoff. Buying sponsorship rights will notlikely translate into deep affinity for the brand, at least in the short term.When brands invest time and resources, the benefits are often rewarding. The CulturalCommunity approach requires a long-term commitment; it’s the equivalent of theresidents of a tight-knit ethnic segment inviting the brands into their homes and offeringthem the chance to prove they want a relationship.For those brands that invest in the Cultural Community approach over time, the rewardscan be substantial. Demonstrating a commitment to a community’s shared culture signalsthat the brand cares and is here to stay. The community’s younger members grow upwith the brand and see it as an ally — a friendly entity that’s investing in them personally.Long-term brand loyalty often emerges as older generations endorse the products andservices they introduce to their progeny. 24
Calle OchoCalle Ocho started in 1978 as a wayto showcase Cuban culture in Miami.Today over one million people come fromall over the world to attend this streetparty, which is covered by press and majornetworks and sponsored by many topbrands. Calle Ocho is renowned for itsmusic, with top Hispanic acts performingduring the weekend festival.ESSENCE Music FestivalFor three days hundreds of thousandsgather for concerts and community-basedevents in New Orleans. The 2012 ESSENCEMusic Festival, presented by Coca-Cola,drove more than 422,000 guests to thecity. According to Michelle Ebanks,President of Essence CommunicationsInc., “The ESSENCE Music Festival is theultimate destination for entertainmentand inspiration as we gather together tocelebrate culture and connect to our com-munity with some of the hottest names inmusic and entertainment.” Now in its 18thyear, The ESSENCE Music Festival is thenation’s definitive African-American livemusic and cultural experience. 25
cultural currency ™A partnership with talent or a prominent figure within the communitySometimes, affinity by association helps. Prominent figures act not only as cultural icons,but also as cultural gatekeepers. Brands that build associations/partnerships with talentwho’s built up cultural cachet and influence with a segment are borrowing cultural equityto better reach and connect with that segment of consumers.The most frequently used model is that of brands that engage talent (entertainment)that “identifies with” a particular segment and has special authority to speak on its behalf.Segments look to such brands for signals on what to trust (and brands to avoid) — a quasi – litmus test of trust.Caters well to: Brands with low relevancy and low/medium equity measures.Risk/reward:As with Cultural Community, the Cultural Currency approach can serve as a neededintroduction between a brand and a community — a point of entry to establish an audience.Instead of a community-based event, the channel for a relationship is through brand asso-ciation via talent. Additionally, by borrowing cultural equity, brands may reap a particularseal of approval — the equivalent of a reference from a well-trusted source.But “quick entry” should not be conflated with “low risk.” Partnering through brandassociation always carries inherit risk. Through association, the brand’s equity relies,at least partially, on the equity of the talent. Should the talent lose his or her standingin the community, so too might the brand. Cîroc Vodka After Diageo partnered with Sean “Diddy” Combs, the brand grew 552% from 2007 to 2010, replacing Belvedere as the second-ranked vodka in the “ultra-premium” category. 26
cultural authenticity™Connecting with The New General Market based on insights driven inward (multicultural) to outward(general market), or vice versaMost often, brands are practiced at connecting to a “general market” audience — onewith which they’re familiar — but face the challenge of building relevance with a specificmulticultural audience. As opposed to making an introduction (say, through an eventsponsorship), the Cultural Authenticity approach is a process of “getting to know you.”Brands develop authentic relationships through the process of uncovering and utilizingrelevant cultural insights.The best examples come from brands that use an insight most relevant to a particularcommunity. Distilling cultural insights requires heavy lifting by research, influencingeverything from product/service development to communications. Ultimately, theapproach calls for a high degree of insight and a dedication to reflecting that insightin the marketplace.Caters well to:Brands with high relevancy and low equity measures, or vice versa.Risk/reward:Using Cultural Authenticity requires deep levels of understanding and commitment.The best examples come from brands that, in their own way, create an organic bond withthe community. This requires a heavy investment in research or innovation during theproduct development cycle, with the particular audience in mind. Sometimes brandssimply get it right from the beginning due to a deep cultural understanding of the totalmarket. But in general, Cultural Authenticity is not an easy tactic to execute because itrequires a powerful cultural insight rolled out in a holistic manner. The brands, in effect,become natural extensions of the community. Brands that are successful at executing thisstrategy often enjoy a long and profitable tenure with high barriers to category entry. Honey Bunches of Oats 80% of Hispanics, regardless of fluency, want bilingual packaging. The Honey Bunches of Oats “Think Positive” campaign marks the first time the company has implemented a bilingual pack promotion. 27
cultural confluence ™Turning a segment’s cultural values into attributes relevant to what’s considered the general marketWhen we reference Cultural Confluence, people sometimes think we’re suggestingmeshing or “watering down” the brand, thereby costing the brand its authenticity.This is far from the truth. This cross-cultural approach is more accurately defined astaking a holistic approach to the total marketplace.Caters well to:Brands with medium to high relevancy and/or medium to high equity measures.Usually brands that are successful at this tactic have a high degree of initial trial and usagemeasures and get a high degree of repeat usage.Risk/reward:This tactic helps brands increase loyalty among a larger base of consumers and establishhigher barriers to entry for competitors. We believe that as we continue to explore theimpact of The New General Market, we will begin to see more Cultural Confluence. Red Rooster After a celebrated run as executive chef at Aquavit Restaurant, the Ethiopia- born Marcus Samuelsson has built Red Rooster, critically heralded and reflective of Harlem’s many cultures. The restaurant was named after the legendary Harlem speakeasy that was located at 138th Street and 7th Avenue, where neighborhood folk, jazz greats, authors, politicians and some of the most noteworthy figures of the 20th century uch as Adam Clayton —s Powell Jr., Nat King Cole and James Baldwin ould converge to enjoy drinks —w and music in an inviting atmosphere. Since opening, it has attracted a world of patrons. Red Rooster has hosted everyone from the president of the United States to Halle Berry. Red Rooster has embraced today’s Harlem with that same spirit of inclusiveness and community from its past and present. 28
the cultural loop ™Linking a brand with a social cause or purposePurpose-driven brands — those brands that put their capabilities to use in service ofa pressing social problem — are sometimes neglected within the context of multiculturalmarketing. And yet research definitively points toward the conclusion that multi-cultural segments respond to and support those brands that address relevant socialissues — often more so than the general market.“Social issues” is a broad umbrella, from sustainability to health to education, and much in between. The Cultural Loop poses the question: What issues are most important to the community, and how can brands go beyond business as usual to address them? This approach, broadly speaking, is about responding to what matters by playing a con- structive role in cultural communities.Caters well to:Brands with high relevancy and equity measures.Risk/reward:Research suggests that affinity and loyalty increase for those brands that effectively gobeyond business as usual. For cultural communities in particular, The Cultural Loop canwork toward building trust, demonstrating the brand’s commitment to “what matters”and conviction to do what’s best for the audience it serves.However, good intentions are not enough. Social issues must be relevant both to thecommunity and to a brand’s own capabilities. Putting resources behind a certain socialissue that the brand has little license to address will likely hit a note of dissonance andrisk inauthenticity.Black Girls Rock! b condomsBlack Girls Rock! Inc. is a nonprofit youth empower- b condoms focuses on bettering sexual healthment and mentoring organization established to practices among four main target audiences:promote the arts for young women of color, as well Blacks, Hispanics, 50 and over, and gay andas to encourage dialogue and analysis of the ways bisexual males. b condoms reinvests a portionwomen of color are portrayed in the media. Black of its profits in organizations across theGirls Rock! offers unique programs that range from country that support sexually transmittedDJ academies to cuisine tasting. The organization disease education and prevention in the mosthas also established an awards show on BET, which affected areas.was extremely successful in its inaugural year. 29
The term “cross-cultural marketing” dates back to the 1930s, but circumstances did notconverge in a way that allowed the advertising industry to fully embrace the conceptuntil now. Because of global and domestic demographic shifts, a cross-cultural approachis suddenly essential in terms of analyzing the changing consumer and gaining deeperinsights into The New General Market. With current technology allowing us to bettertarget within this evolving audience, we will be poised to meet the demand for effectiveadvertising and produce a greater ROI.Below is a case study that demonstrates how we solved a client’s total market communica-tions and business opportunity.Case study: A total market strategy using the cross-cultural approachIn 2008, a global retail brand that had matured in the United States encountered a down-turn when the economy went into a nosedive. The number of store visitors was declining,and growth through expansion was not an option.The challenges presented to OgilvyCULTURE were as follows: First, increase the numberof visits by 2015. Second, demonstrate what OgilvyCULTURE means by a “total market”approach — and explain the benefits of such a strategy. And third, inform the regional andlocal markets.An investigation into the retailer’s current approach revealed some interesting facts.The first insight was that the retailer, seeking to find new customers, had only gone afterHispanics — but that segment comprised less than half (48%) of the total population ofpotential new customers. Another revelation was that something was being lost in transla-tion: The retailer’s positioning did not address each of the segments in a meaningfulway. Further, we discovered that there was no consistent strategy that linked the nationalmarket to regional and local markets.Given the opportunity, OgilvyCULTURE responded with a four-pronged approach.Initially, we sized and segmented the opportunity. Then we performed a qualitative assess-ment and a quantitative assessment designed to show that we were correct in our hypothesisabout where the retailer’s efforts were falling short. Once our theory was validated, wedeveloped a cross-cultural strategy and followed that up by designing a cross-culturalexperience plan.The outcome? The retailer was able to understand the total market opportunity and theneed to prioritize all segments. Rather than create a one-size-fits-all multicultural strategythat was in fact geared only toward Hispanics, it executed a communications strategy thatincluded Blacks, Asian Americans and the LGBT community in addition to the generalmarket and Hispanics. The retailer also launched an integrated experience strategy that wasconsistent across the national and regional/local markets. Finally, we put in place a measure-ment and effectiveness plan to track results. 31
The Ogilvy Mather Cross-Cultural MatrixIs there an enormous untapped value in this approach? We are just beginning to tapthe surface. Usually the last question we get from clients after discussing the strategicterritories is “Where is my brand with regard to the relevancy or equity measures withinThe New General Market?”Our view is we must understand where the brand is with regard to cross-culturalequity measures. Over the past year, we’ve measured relevancy through qualitative andquantitative tools, stakeholder interviews and client sources. After assessing the brand,we plot where it falls within the Ogilvy Mather Cross-Cultural Matrix (see below). Relevancy Growing Strong Cross-Cultural Cross-Cultural Equity Equity Category Index (Small, Strong Brands) (Large, Strong Brands) Little Declining Cross-Cultural Cross-Cultural Equity Equity (Small, Weak (Large, Weak Brands) or New Brands)By plotting the brand’s current position within the Cross-Cultural Matrix, we areable to understand how the brand is positioned within The New General Market andbegin to formulate a hypothesis as to how to increase the brand’s value with The NewGeneral Market.We develop a strategy to build the brand’s relevancy and equity measures with TheNew General Market, based on the brand’s position within the Cross-Cultural Matrix. 32
The Ogilvy Mather Cross-Cultural Matrix Relevancy Cultural Cultural Currency Confluence Category Index The Cultural Loop Cultural Cultural Community AuthenticityAs presented earlier in this report, these are our proprietary strategic territories. Usingthis methodology and approach helps us understand what a brand needs to work onto strengthen its positioning and how to increase the value of the brand over time withThe New General Market. The insights we gain allow us to evaluate various tactics basedon the brand’s cross-cultural assessment.What’s next?In the fall of 2012, through a joint WPP partnership using BrandZ™, Ogilvy Mather,Millward Brown and Firefly Millward Brown will release the marketing and advertisingindustry’s first Cross-Cultural Index. It is a proprietary approach we’ve developed tomeasure how cross-cultural a brand is based on an assessment. This approach will allowus to reassess a brand’s market value and other brand metrics for the “Total Market”within BrandZ™. The beta version of the Cross-Cultural Index will rank and score a brand’s equity withinThe New General Market. It is our belief that once this tool is released and refined, we trulywill have a “Total Market” view of a brand’s value in the marketplace. Companies willhave a better understanding of how to elevate their brand’s value using our cross-culturalstrategies and how to invest their assets in The New General Market. In the end we willhave a way to measure the Total Market for effective and inspiring communications for all.The marketplace continues to evolve. With this report, we have established a frameworkfor addressing The New General Market needs for current and future brands that engagewith our services in this fast-changing world. We believe there is a need to change ourcurrent methodology in order to produce deeper consumer insights, better targeting andmore effective communications. If you have any questions or comments, please do nothesitate to contact Jeffrey Bowman at email@example.com. 33
Jeffrey Bowman Cross-Cultural Practice LeadJeffrey leads the North American Cross-Cultural Practice at Ogilvy Mather, one of thelargest advertising and communications agencies in the world. Ogilvy Mather’s cross-cultural approach is viewed as an industry breakthrough because of the Inside-Outsidestrategy, “The New General Market” approach, partnerships and client service model.Since its launch in 2011, the Cross-Cultural Practice has nabbed eight global brands lookingto target The New General Market. Jeffrey has partnered with John Seifert, Chairman andCEO of Ogilvy Mather North America, and Donna Pedro, Chief Diversity Officer ofOgilvy Mather North America, to create a new communications model that serves as abridge between the general market and multicultural marketing communications models:a “Total Market” communications model. This model has been celebrated in The New YorkTimes, Advertising Age, The Economist and other industry publications as well as at conferences.Ogilvy Mather’s depth and diversity of talent allowed Jeffrey to bring his experienceto a space thirsty for innovation. Jeffrey has more than 15 years of experience in marketingstrategy, brand management, experience planning, digital strategy, channel strategy andmarketing effectiveness with global brands within the beverage, consumer packaged goods,retail and technology industries. Still in its infancy, OgilvyCULTURE is recognized asa very promising practice for the agency.When Jeffrey is not working, he enjoys spending time with his wife and two daughters inNew York City. Jeffrey holds an MBA in Marketing from Clark Atlanta University anda BS in Marketing from South Carolina State University.Contact us: firstname.lastname@example.orgFollow us: @ogilvycultureLearn more: ogilvyculture.comFacebook: facebook.com/ogilvyculture 35
Chart/Visual Page Source1980 vs. 2010 Population Growth Rates 8 1990 via World Databank, 2010 via CIA World FactbookSurvey Data 9 OgilvyCULTURE LinkedIn SurveyMulticultural Spending and Shift to 9 The Nielsen CompanyEmphasize Hispanic Advertising Black Media Spend 10 Nielsen Report Media Spend 2009Global Population by Age 10 US Census Bureau International DatabaseRace and Ethnicity Chart 11 Ad Age, “2010 America: What the 2010 Census Means for Marketing and Advertising,” by Peter FranceseTNGM by Region, 1980 – 2010 12 US Census BureauTNGM by State, Top 10 Populated, 12 US Census Bureau1980 – 2010 TNGM by City, Top 25 Populated, 13 US Census Bureau1980 – 2010 Multicultural Buying Power 13 Selig Center for Economic Growth, Terry College of Business, University of Georgia, US Average Annual ExpenditureHousehold Expenditure Spending: 14 US Department of Labor, Bureau of LaborHispanic, Black and Asian American Statistics, Consumer Expenditure Survey2010 Census Tract Heat Map, 14 Data from US Census Bureau, Map via% Hispanic SocialExplorer2010 Census Tract Heat Map, 14 Data from US Census Bureau, Map via% Non-Hispanic, Black SocialExplorer2010 Census Tract Heat Map, 15 Data from US Census Bureau, Map via% Non-Hispanic, Asian American SocialExplorerTop 10 DMAs and % TNGM in City 15 The Nielsen Company Local Television Market Estimates; US Census BureauTechnology Usage 16 Mintel, Pew Research Center, eMarketer, IDC, US Census: Aside from Total Market, email assumptions are based on Census data and technology adoption rate 37