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Page update February 22, 2008

 

 Digital Drummer Column
James Neusom

 

Advertisers Go After The Black Dollar Spending $2.3 Billion

 

Last year Advertisers spent billions chasing the trillion dollars Black consumer market. According to the Nielsen Company (see http://www.nielsen. com/media/ 2008/pr_080129_ download. pdf), spending on media outlets (TV, Radio, Print) that reach Black consumers, for the period of October 1, 2006 through September 30, 2007 totaled $2.3 billion dollars. The Black consumer market in the U.S. according to Packaged Facts (http://www.packaged facts.com/) is expected to top $1.1 trillion dollars by 2012--a nearly 30% jump from past studies.

 

Both studies show that Blacks are behind whites when it comes to utilizing the Internet for information and online purchases. Black are less likely to cite the Internet as a resource for information, or to say that it has taken time away from television or magazine usage, according to the Packaged Facts report. They
are also less likely to have made a purchase over the Internet than the general population (26% versus 44%) and prefer to shop in person rather than online.

 

Ad dollars reflected this mind-set in the Nielsen Monitor-Plus study, showing national advertisers targeted traditional media outlets such as Local Radio, Cable TV, and National Magazine. Local radio reported the greatest amount of spending on Black targeted media at $805 million dollars, comprising 35% percent of total spending. Cable TV was second, and demonstrated the largest ad growth with 14.5%. National magazines reported more than $600 million in spending, showing healthy revenue across a number of publications including Essence magazine, American Legacy, King, Giant, and XXL.

 

The rationalization behind these studies shows that advertisers are seeking to reach the Black middle class or affluent Black consumer with annual incomes of $75,000 or more. This small niche market of 2.4 million Black households, account for 45% of the Black buying power. Affluence has affected the Black
market to the same degree as the rest of the economy, the rich tended to get richer as the poor got poorer.

 

In terms of advertising, television still continues to be a main driver for Black purchases, with 42% of Black families having four or more television sets (versus 32% of other households). They also have a less negative view of advertising, with only 18% saying they don't like advertising in general (versus
39% of the general population) and only 15% viewing it as a waste of their time (versus 32% of the general population).

 

Blacks are also more likely to pay for digital cable than the general population (35% to 27%), and are more likely to purchase premium channels like HBO. While Black newspaper readership lags behind the general population (32% versus 39%), those readers are more likely to rely on magazines for information (16% versus 14%) and entertainment (12% versus 10%), and are more likely to believe spending money on magazines is worthwhile (25% versus 19%).

 

With $89.7 million in spending, Procter & Gamble is the largest advertiser targeting Black consumers. McDonald¢s is second with $37.7 million, followed by Johnson and Johnson with $36.1 million in total spending for the 12 months October 2006 through September 2007. Collectively, the Top 25 Advertisers spent a total of $681.0 million.

 

Five auto makers are in the top 25 advertisers across all Black media: General Motors ($35.8 million), Chrysler ($28.2 million), Ford Motor Co. ($25.9 million), Nissan Motor Co LTD., ($22.1 million) and Toyota Motor Corp ($21.7 million).

 

Spending for the top 15 product categories across all media reached over $806 million. Not surprisingly the Automotive category has the most spending at $187.4 million, more than double the dollar amount of the number two product category, Quick Service Restaurants at $79.1 million. Motion Pictures is the
third highest ad spending product category at $75.4 million.

 

In part because Blacks are more often brick-and-mortar shoppers, they're more influenced by in-store promotions than the general population. They are more likely to visit more stores while shopping, but are less influenced by sales and discounts. And they are more likely to cite themselves as trendsetters and
influencers when it comes to buying items.

 

The bottom line of these combined reports show the Black dollar is still strong, even in these bad economic times...and advertisers know it! How much of the Black dollar is being spent in the Black community is a whole other story, but it is good to see national advertisers spending hard dollars on Black media. Hopefully, in the future trends will show more money being spent online with new "Rich Media" (video, music, blogs) developers.

 

Remember we must Share The knowledge (Network)... To Share The Dollars!

 

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Jim Neusom
Executive Director/Publisher
InterServe Networks/City Lights Software, Inc.
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