African-American consumers now command $1 trillion in annual spending power. And a comprehensive new survey offers better clues to reaching them.
The report, based on information gathered via online and in-person surveys that Nielsen is describing as the largest custom survey ever conducted in the U.S. on African-American purchasing behaviors, offers marketers some key insights in how to grab a larger share of business from this demo group with a growing influence in the advertising marketplace. The study was put together recently by Nielsen in partnership with Essence Communications.
Together, Nielsen and Essence surveyed 10,000 online and in-person participants; in addition, 300 consumers were randomly selected to participate in live interviews during the 20th annual Essence Festival held in New Orleans in July, and their responses about viewing, listening and purchasing habits were videotaped.
“African-Americans represent a substantial growth segment of the American consumer market for companies and organizations,” the report states. “As a young population with growing economic power and influence, it is an important market for those organizations looking for future domestic growth.”
The report offers an overview of black women consumers, calling them “trendsetters, social mavens, heads of households, leaders in business and in their communities.” The report adds that black women consumers are progressive with their thoughts on health, entertainment and diversity in advertising; they’re passionate about products they like and likely to share their shopping and brand experiences with friends and family on both social media and by word of mouth. In conclusion, the report describes African-American women as offering “unparalleled opportunity for brands.”
Among the data:
• 59% of black women expect companies they support to give back to the community in a meaningful way
• 59% of black women believer supporting minority business enterprises are important
• Nearly 40% of black women 18-54 consider themselves to be trendsetters
• 80% of black women agree being conscious of purchasing decisions is important
• 79% of black women agree that it is important to trust a brand when purchasing its products
• 63% are more likely to purchase a luxury vehicle in the next year than the general market
• 45% of more likely than the general market to shop at Bloomingdale’s
• 40% are more likely to purchase movie tickets online than the general market
• They are two times as likely to shop at Nieman Marcus than the general market
African-American women are also very social and connected.
• 65% are more likely to listen to a local radio station online compared to the general market
• 46% always shop or prefer to shop online for apparel
• 40% are more likely to use a daily deal app such as Groupon or Livingsocial than the general market
• 80% will tell their friends about a product if they like it
• They are two times more likely to spend more than 3 hours on social networking sites in an average day than the general market
When it comes to advertising, ethnic identity is closely linked to African-Americans’ affinity for products and purchasing behavior, the report says. Compared to the general population, African-Americans are 30% more likely to believe diversity in advertising is important.
Some general data on income and shopping habits of African-Americans:
• 44% of all African-American households earn $50,000 or more and 23% earn above $75,000
• 38% of African-Americans are more likely to make a purchase of a brand when the ads have black persons included
• 43% are more likely to patronize a business if it is minority-owned
• 20% say they would be more likely to purchase a product that is endorsed by a black celebrity
· 55% of African-Americans 18-55 with household incomes of $50,000 or more would purchase or support a product if it was sold or supported by a person of color or a minority-owned business
Also, using multiple media platforms to reach African-American consumers is an effective marketing strategy because:
• 62% are more likely to feel that advertising content accessed via mobile phones and devices is useful, compared to the general market
• 53% agree that TV ads provide useful information about new products and services
• 47% believe newspaper ads provide useful information, 46% believe that about magazine ads, 39% about radio ads and 38% have that sentiment about Internet advertising.
In 2013, the report says, $2.6 billion was spent with media focused on African-American audiences on broadcast TV, cable TV, national magazines, spot radio and syndicated TV, up 7% over 2012. However, that is only a tiny percentage of the total $69.3 billion that companies spent on advertising on those media platforms in 2013.
The categories showing ad-spending increases on media targeting African-Americans in 2013 included life insurance, hair care products, loan companies and universities.
Categories spending less included auto insurance, banking services and apparel stores.
The Top 10 advertisers in ad spending on African-American focused media in 2013 were:
(1) Procter & Gamble
(7) Berkshire Hathaway
(10) General Motors
In the area of media consumption, 52% of African-American consumers are more likely to be heavy readers of magazines. That’s 30% higher than the general population. Also, 45% of black adults with incomes greater than $50,000 annually have read an African-American-focused magazine in the last 30 days. And 52% of African-Americans agree that advertising in a culturally relevant magazine provides useful information about products they are interested in.
In the area of digital media, 78% of African-Americans own a smartphone. Says the report, “Blacks feel stronger about the utility of social media and its impact on products and brands than does the general market. African-Americans are 81% more likely to show support for a favorite company or brand using social media than the general population and 76% more likely to share opinions by posting reviews and ratings online.”
Radio consumption is also high among African-Americans. The data found that 92% of African-Americans indicated they tune in to radio each week and listen for more than 12 hours—5% longer than the general market. Peak listening is between 10 a.m. and 3 p.m., and 61% listen outside the home.
Regarding television, African-Americans watch 14 more hours of TV on a weekly basis than any other group—watching on average nearly 45 hours per week.
Says the report’s authors, “It is our hope that this 2014 report ignites and drives compelling conversations in both corporate corridors and communities alike.”