Auto Makers May Resume Diversity Marketing as Economy Improves

In the past decade, automakers broadened their strategy to reach ethnic audiences. Manufacturers typically hired separate agencies to develop ad campaigns to promote their vehicles to African-​Americans, Asians and Hispanics. But the recession changed all that. Last year, automakers cut marketing and the cuts extended to the ethnic demographics.  While general automaker advertising dropped 13% overall in 2009, the budgets for Hispanic TV, magazine and radio shrank by 38% and ad spending in those same categories when targeting black consumers dropped 18%.

What are automakers doing to compensate for these changes?  Writing for Automotive News, Laura Clark Geist says that many companies either cut the budgets for separate agencies or moved the business of creating advertising for ethnic groups to the general-​market agency. This seems to be the strategy of General Motors CMO Susan Docherty who said that when it comes to creating ads for publications targeting blacks, “I think I can use my general-​market agency and make sure that the creative is specific."

Some industry experts believe that slighting the diversity market could be a mistake.  According to Randi Payton, president of the media company On Wheels, ethnic minorities buy nearly 1 out of every 4 cars sold. The budgets allocated to minority marketing are limited and any automaker who does increase investment in this area can expect huge returns.  “These consumers are starving for relevant content on products and services that speak to their culture," says Payton.

Some automakers may already be getting the message.  BMW noted that there’s an intent to increase African-​American marketing in 2010. As consumers begin buying cars again, automakers may up marketing budgets to target diverse groups.

[Source: Geist, Laura Clark. Recession slashed ethnic marketing efforts. Automotive News. 19 Apr. 2010. Web. 28 Apr. 2010]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.