After working on more than 30 brands across therapeutic areas, on the client and agency side, I have yet to see a cultural investment that did not outperform an equivalent general market tactic from an ROI perspective.
I’ve now seen this drive over $70 million for one brand and consistently outperform the current marketing mix across brands—all the time. Every year, as part of the brand plan process, brands spend significant time exploring new opportunities for growth and innovation and yet, the multicultural market segments are just sitting there—untapped. It’s like a gold mine that doesn’t need any digging.
In the past two to three years, about 20 pharma companies have expanded their multicultural investment, with five companies investing up to about $20 million annually. Admittedly, there are a few common barriers that prevent a bigger industry uptake. First, brand teams believe their existing efforts are doing the job, and second, there is a hesitation due to the incremental investment to bring this area to market.
In terms of the first point, the data speaks for itself; the majority of the cultural consumers are under-reached by traditional marketing efforts, as shown by multiple Nielsen studies. Second point, the key is the mindset and the approach. Don’t look at the cultural segments as a separate marking plan, but instead as a basic marketing mix optimization of your overall plan. For example, when you have a display campaign, usually you have multiple creative banners and sizes that are in market at the same time. Over time, you optimize towards a better performing creative or size, but ultimately both banners are developed to support one digital campaign.
Optimize Towards Ethnicity
We optimize towards gender, age, creative, geography, and all of these other variables—but not ethnicity. That is so odd to me given that culture is such a huge driver of behavior and has tremendous potential to scale. I recommend conducting a simple analytics exercise to gauge your brand’s performance, source of business, as well as sales potential within at least four or five U.S. cultural groups. Then, re-allocate your existing budget to cover some of these segments in your first year. Don’t worry, it’s okay to shift budget from your general market segment. I don’t think it matters if your revenue comes from a Hispanic consumer, Chinese consumer, or a non-Hispanic white consumer; I can guarantee you that as the worst case, your return will be the same, but in most cases stronger. Most importantly, over time you will achieve a total market plan that is yielding a stronger return in your first year and certainly over time, given that the growth rates for most of the cultural segments are outpacing general market.