Advertisers slow In tapping into the spending power of Asian Americans

ASAM NEWS

Advertising and marketing spending targeted at multicultural audiences in the U.S. will expand to 6.3% in 2020, yet Asian Americans will only get a small share of that, according to the latest annual U.S. Multicultural Media Forecast report.
The research examined three demographic groups: Hispanic Americans, African Americans and Asian Americans. Marketing Charts indicated that advertising targeted specifically toward these three groups is still far below each group’s relative population share — for example, Asian Americans make up more than 1 in 20 members of the population, but only attract 0.1% total advertising and media revenue.

Benzinga noted that of the nearly $26 billion spent on multicultural media in 2018, Asian Americans were the smallest but fastest-growing demographic, with revenues at $722 million, up 7.0%. African Americans saw revenues grow 6.1% to $7.2 billion, and the Hispanic media segment, which had the largest share at $17.94 billion, up 5.3%.

However, advertisers are starting to notice increasing potential in Asian American-targeted advertising. Nielsen estimated that Asian American spending power exceeded $1 trillion in 2018, and as a particularly tech-savvy group, Asian Americans are adept to using emerging technology and are a prime consumer group for digital advertising.

Multiethnic consumers are the fastest growing demographic in the country, forcing brand marketers to consider the multicultural media market if they “want to accelerate growth and increase overall U.S. market share,” said PQ Media President and CEO Patrick Quinn. “Nevertheless, multicultural media growth has slightly under performed the broader U.S. media industry and it still accounts for a mere sliver of the American pie.”

PQ Media conducted the research commissioned by the Association of National Advertisers (ANA) and the Alliance for Inclusive and Multicultural Marketing (AIMM)…

Quinn added that although multiethnic consumers from these three groups comprise 40% of the total U.S. population, multicultural media investments only attract 5.2% of overall U.S. spending.

The media research company Nielsen indicated that Asian Americans are “50% more likely to use the internet and apps for consumer reviews than the general population,” but Marketing Charts noted that almost one-third of multicultural media spending goes to TV advertising, “a proportion almost twice that of the overall media market (16.7%),” whereas multicultural digital advertising only receives 10% of spending.

Nielsen’s report into the Asian American consumer’s spending journey, titled “Informed Influencers and Powerful Purchasers,” also revealed that Asian Americans are more likely to purchase products based off of recommendations or reviews from friends or family.

“The Asian American path to purchase is affected by a myriad of influences that are heavily rooted in cultural traditions as well as their cross-cultural identity,” Nielsen’s research revealed. “Understanding these drivers of behavior is essential for marketers to exercise empathy and establish real connections with Asian American consumers.”

These insights may be crucial to accessing the Asian American demographic’s vast spending power — insights that brand marketers don’t seem to realize yet.

“Businesses face an imperative to reach these consumers, who wield $1 trillion in annual buying power, in order to drive future growth,” the report concluded.