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The Cross-Cultural
Report
The Cross-Cultural Report




Jeffrey Bowman
Cross-Cultural Practice Lead
Ogilvy Cross-Cultural Practice
Contents




Introduction                                                           2

Contributors                                                           4

The changes roiling the industry                                      6

Ogilvy  Mather’s new approach:
Cross-Cultural rather than General Market or Multicultural            17

“How does the Cross-Cultural model increase the value of my brand?”   21

Releasing the value of a Cross-Cultural brand                         30

About the author                                                      34

References                                                            36
Introduction
If you’ve paid even the slightest attention to popular culture in the last couple of years,
you’re well aware of the television phenomenon Mad Men, a show about a fictional
advertising agency set 50 years in the past. The story, of course, fills in the timeline of
America throughout the 1960s via one set of highly creative (if also exceedingly hedonistic)
ad men and the campaigns they create. There’s a rich irony to this. At precisely the time
when America is besotted with its past, the future is threatening to run away from us.
Over the last decade, both in the United States and globally, the advertising industry
and marketplace have radically changed. Digital is the norm, social media is changing
the way we reach and have conversations with consumers, and agencies are turning
toward the emerging markets — Brazil, Russia, India, China — many believe will be the
engines of global growth for years to come.

At Ogilvy  Mather, we too foresee a bright future for those fast-growing economies.
But we’re equally excited about business right here at home. Ogilvy  Mather sees
a tremendous domestic opportunity — one that doesn’t depend on uncontrollable macro-
economic factors or a zero-sum game among advertising combatants. Instead, we see
a whole host of demographic changes in the United States that add up to a fundamental
repositioning of what we call the general market — and that present compelling new
possibilities for growth. We call this new mass market “The New General Market” (TNGM).

 We’ve arrived at this important moment motivated by two factors. The first, as we explain
 below, is that outside forces are fundamentally changing the advertising world. The way
 Don Draper and his Mad Men cohorts did business is surprisingly similar, in some respects,
 to how present-day advertising is conducted — and that model is dangerously antiquated.
 The good news is that we’re ideally positioned to take advantage of a tidal wave of change:
 Ogilvy  Mather has emerged from the global economic downturn in robust health.
 That leads us to the second reason for overhauling our model: We continually rethink
 the way we do things because we are Ogilvy  Mather. In the year of our founder’s 101st
 birthday, we believe it’s important to reengage with some of David Ogilvy’s most enduring
 ideas. Specifically, we are driven by what David called “Divine Discontent.” There is no
“good enough,” this idea says. There is always a chance to improve.

We have happened upon a major shift in the way we perceive and market to our clients’
cherished customers. In the following pages we explain this shift and the manner in
which we need to respond to it. The stakes are high. It’s no exaggeration to say that
this is a change-or-die moment for many players in our industry. We believe that with
this blueprint we are poised to prosper rather than perish. And we believe that David,
who had great respect for the consumer and a deeply held belief in constant adaptation,
would have approved.




                                                                                               3
Contributors
Ashley Mackel

Asten Morgan, Vibe Lifestyle Network

Brickson Diamond, founder, Blackhouse Foundation

Caroline Washington

CarolLyn Colon

Christine Villanueva

Deborah Balme

Dolly Turner and Felicia Walker Benson, NorthStar Group: Jones Magazine

Donna Pedro

Enrique Urquiola

Erin Goldson

Felipe Korzenny, PhD, coauthor of Hispanic Marketing: A Cultural Perspective

Jeremy Katz

John Seifert

Kathy Whitlock, Univision

Ogilvy  Mather’s Professional Networks — Administrative Professional Network,
Black Diaspora, LatinRED, Ogilvy Pride, RedLotus, Women’s Leadership,
Working Parents Network, Young Professional Network

Peter Francese, founder and publisher of American Demographics Magazine

Rebecca Clayton

Sacha Xavier

Sidra Smith, Gate Pass Entertainment

Willow Gross




                                                                                 5
The changes roiling
the industry
The agency model is old
If you watch Mad Men, you may be struck by one remarkable truth: Despite the outdated
social mores — the rampant daytime drinking and womanizing, the blue haze of cigarette
smoke drifting through the office — the fictional characters of Sterling Cooper Draper Pryce
still divide up the marketplace the same way we do. A bit of history: The first ad agency
catering to the general market opened in 1843. A pioneering ethnic agency came onto the
scene in 1956, creating the segmented structure to this day. The advertising industry still
divides itself into general market agencies (GMAs) and multicultural agencies (MCAs),
and our clients generally adhere to this model.


What’s so different, and is this a problem?
We’ll put it plainly: The bedrock industry practice of marketing to either general or ethnic
markets has remained unchanged since the Eisenhower administration. This model has
left us seriously out of step with the starkly altered demographics of the United States in
2012. The American population has changed profoundly and will continue to evolve in the
years ahead. In fact, as these demographic changes grow in magnitude, the whole notion
of what constitutes a minority must surely change.

Demographic1980                              Note:  he population was divided into five ethnic segments — 
                                                    T
                                                    White, Black, American Indian/Aleut Eskimo, Asian
White83.1%                                         American or Pacific Islander, and other races — until
Black11.7%                                         March 1989. Beginning with the 2000 census, Hispanic
Asian American 1.5%                                status was added to census forms, in recognition of
                                                    the fact that Hispanics may be of any race. Thus, while
Hispanic6.4%                                       it is now possible to ascertain exact percentages of
                                                    non-Hispanic minorities, pre-2000 figures do not allow
2010                                               this distinction.

White68.0%
Black12.6%
Asian American 4.8%
Hispanic13.9%

Point Change
White-15.1
Black+0.9
Asian American +3.3
Hispanic+7.4



Parts of our model have, in fact, morphed to reflect America’s dramatically shifting
demographics. Our business offerings now reflect the importance of Hispanics,
Blacks, and Asian Americans and the Lesbian, Gay, Bisexual and Transgender (LGBT)
community. However, as these segments have ballooned, the desire among clients for
MCA services has grown as well, and agencies more specifically focused on those markets
have often been better positioned to meet those needs.

But let there be no mistake: As the populations and spending power of minority consumers
continue to grow, the model that divides business between general market and MCAs is



                                                                                                               7
increasingly obsolete. If you listen in on the whispered conversations in client meeting
rooms and agency huddles, you’ll hear people questioning the viability of this 60-year-
old structure.

And for good reason. In a recent survey, we asked chief marketing officers, executive
vice presidents and directors of marketing a few questions about their level of satisfaction
with both the GMAs and MCAs with which they have worked. We found they were
satisfied with neither — primarily because of the agencies’ inability to deliver integrated
communications across the two platforms.

Question: On a scale of 1 to 5, with 5 being the highest, how would you rate your general
market advertising and/or marketing agency?

 1	Rating:        7.1%              The most common comments were “Did not bring real breakthrough
 2	Rating:       21.4%              ideas,” “Too tied to the process and politics” and “Did not drive things
                                     across channels to create a holistic, surround approach or really
 3	Rating:       42.9%              activate the idea.” Another was “Limited creative thinking;
 4	Rating:       28.6%              watered-down messaging to appeal to mass audiences.”
 5	Rating:        0.0%



We asked the same executives about their multicultural advertising and/or
marketing agency.

 1	Rating:       50.0%              Most respondents did not have an MCA of record and instead used one
 2	Rating:       14.3%              on a project-by-project basis. One comment was “Only focused on
                                     Hispanic market with same/similar messaging as general market.
 3	Rating:       28.6%              Not truly differentiated to meet the true needs of this target.”
 4	Rating:        0.0%
 5	Rating:        7.1%



Moreover, clients are frustrated that they have to endure multiple and seemingly redundant
meetings and billings in order to solve a single problem: how to build the brand. And that
effort isn’t always translating into the proper execution. Clients have responded to the
tremendous growth of the Hispanic market by shifting more of their budgets to focus
on that audience; despite this trend, however, measured media spend for that population
actually decreased from 2008 to 2009 by nearly 5%.

Spanish-Language Media Spend (in millions)
		                               Q3 ’08 – Q2 ’09	              Q3 ’07 – Q2 ’08               Point Change
Network and Cable TV	                $3,199.0	                      $3,265.8                          -2.0%
Spot TV	                             $1,521.1	                      $1,753.3                         -13.2%
Spot Radio	                           $569.0	                        $586.8                           -3.0%
National Magazines	                   $146.7	                        $177.9                          -17.5%
Local Newspapers	                       $88.6	                       $111.3                          -20.3%
Total	                               $5,524.5	$5,895.0                                                -6.3%




                                                                                                                8
The Black community saw even more of a disparity: Media spend for that market is down
by more than 7%.

Black Media Spend (in millions)
		                                Q3 ’08 – Q2 ’09	         Q3 ’07 – Q2 ’08        Point Change
Spot Radio	                             $794.1	                  $851.4                   -6.7%
Cable TV	                               $529.0	                  $495.7                    6.7%
National Magazines	                     $452.0	                  $578.2                  -21.8%
Syndicated TV	                           $45.2	                   $88.1                  -48.7%
Network TV	                              $27.3	                   $31.5                  -13.3%
Total	                                $1,847.6	$2,044.9                                   -9.6%



This has left brands with a dearth of culturally relevant communications for various
communities, and the current agency model is not flexible enough to address the problem.
In theory, GMAs speak to nearly 70% of the marketplace, and MCAs cover the remaining
30%. In practice, overall media spend for the United States is tilted steeply toward
the general market: The media buy for that segment chews up 93% of a $117B industry.
So, not only is the system clunky and frustrating for clients, it’s also increasingly ill-suited
to the task at hand. In a multihued nation, the advertising business looks alarmingly
monochrome. As presently structured, everybody loses. Clients reach only part of their
audience. Advertisers and marketers fall short of their benchmarks. The good news is that
all of this is avoidable, if we begin targeting The New General Market.

% of World Population by Age
50%
45%
40%
35%
30%
25%
20%
15%
10%
 5%
 0%
      	0-24	                      25-49	 50-74	 75-100+




Target markets have changed
Given the dissatisfaction with — and obvious shortcomings of — the GMA and MCA model,
it’s difficult to fathom how the old ways have continued to endure. There are valid reasons
for the longevity of the status quo: Many GMAs have limited experience and skill in the
multicultural space, and each type of agency naturally tends to feel protective of its own
position. But there is one undeniable truth we can no longer ignore: A new general market



                                                                                                   9
is forcing change in the advertising world, whether we’re ready for it or not. We are in the
midst of one of the largest shifts in population and purchasing behavior in our nation’s
history. It’s time to adapt.

OgilvyCULTURE introduced The New General Market in 2010 to create a distinction
between the old general market and multicultural advertising model and the new
cross-cultural model we built. The New General Market recognizes the altered global
demographics created by burgeoning populations of youths, of members of religions
outside the Judeo-Christian tradition, and of women. Within the United States, as we’ve
mentioned, the changes in demographics are just as compelling. According to 2010 census
data, we have a population that looks remarkably different than it did 30 years ago.
Here in the United States, The New General Market includes the Hispanic, Black, Asian
American and LGBT audiences, which make up a combined purchasing demographic
superpower that now constitutes more than 40% of the population.

US Race  Ethnicity

         White                                   200.2                                                16%

      Hispanic                                   50.0
                                                               White                                           12%
         Black                                   37.6          Hispanic
                                                               Black
Asian American                                   13.6          Asian American                                   4%
                                                               Multiracial          65%
                                                               Other                                           2%
    Multiracial                                  4.8
                                                                                                                    1%
         Other                                   2.8

                  0      50    100   150   200

                      Population (in millions)                                       Percentage of Total Population



It is important to understand not only the demographic changes but also where those
changes have taken place. Below is a look at how the demographics have changed in the
United States since the 1980 census was completed.

1980 Census, Hispanics	                                                         2010 Census, Hispanics


                              19%                                                                     14%


                                                                                                               8%
                                                         West
                                     8%
   52%                                                   South                     42%
                                                         Midwest
                                                         Northeast



                               21%                                                                       36%




                                                                                                                         10
Starting with that census, Hispanics began to post record population gains. Growth
in the Black community has been less dramatic, but that market has shifted in terms
of geographic density.

1980 Census, Blacks	                                         2010 Census, Blacks


                    12%                                                        9%


                                                                                       17%
                                             West
                             23%             South
   44%                                                         56%
                                             Midwest
                                             Northeast

                                                                                      18%

                   21%




When we analyzed the numbers state by state to compare the changes, the facts were
arresting. More than 50% of the people now living in California and Texas are firmly in
The New General Market. These are our two largest states in terms of population, and
their impact on elections, retail and education, as well as on media and advertising spend,
should not be underestimated.

2010 Census, Top 10 States
Rank	 State	 % Hispanic	 % Black	 % Asian American	 % TNGM
1	     CA	       38	         6	13	56
2	     TX	       38	       12	             4	          53
3	     NY	       18	       14	             7	          39
4	     FL	       23	       15	             2	          40
5	     IL	       16	       14	             5	          35
6	     PA	        6	       11	             9	          19
7	     OH	        3	       12	             2	          17
8	     MI	        4	       14	             2	          21
9	     GA	        9	       30	             9	          42
10	    NC	        8	       21	             2	          32



We were also struck by The New General Market’s prevalence in America’s top 10 most
populous cities. In each of the 10, the combined populations of Hispanics, Blacks and
Asian Americans account for at least 50% of the city’s total population. The New General
Market accounts for more than 60% of the population in five of these cities, and in
three — Houston, San Antonio and Dallas — it comprises 70% or more of the residents.




                                                                                              11
2010 Census, Top US Cities
Rank	   City	             State	     % Hispanic	    % Black	    % Asian American	   % TNGM
1	      New York	          NY	           29	          23	              13	             64
2	      Los Angeles	       CA	           49	           9	              11	             69
3	      Chicago	           IL	           29	          32	               5	             67
4	      Houston	           TX	           44	          23	               6	             73
5	      Philadelphia	      PA	           12	          42	               6	             61
6	      Phoenix	           AZ	           41	           6	               3	             50
7	      San Antonio	       TX	           63	           6	               2	             72
8	      San Diego	         CA	           29	           6	              16	             51
9	      Dallas	            TX	           42	          25	               3	             70
10	     San Jose	          CA	           33	           3	              32	             68



We’re not necessarily surprised by these massive demographic changes — but we are
somewhat taken aback by the speed with which they have occurred, given that most
predictions estimated they wouldn’t happen until 2050.

These shifts should fundamentally alter our approach to the marketplace. As an agency,
we can no longer afford to be put into a traditional general market box if we want to
be able to deliver relevant and effective communications and meet all of our clients’
needs. In order to serve The New General Market in the United States, the marketing
communications industry must change its service model, starting with the hiring of
a workforce that mirrors The New General Market.


What do these changes mean to advertising?
In order to effectively speak in a relevant way to The New General Market, we need
to understand more than just the raw numbers. We must also fully grasp the changing
purchasing behavior of The New General Market. After all, the combined spending
power of Hispanics, Blacks, Asian Americans and multiracial American communities
is larger than the GDP of many global markets like Brazil, India, Spain, Russia,
Australia and Argentina.

Multicultural Buying Power 1990–2015 (in billions of dollars)
1,600

1,400

1,200

1,000
                                                                                      Hispanic
 800                                                                                  Black
                                                                                      Asian American
 600                                                                                  Multiracial

 400

 200

   0

    	1990	                         2000	            2010	 Projected




                                                                                                       12
Looking closer, we are faced with an even more surprising realization. On a per-household
basis, The New General Market outspent what’s considered to be the general market today
in most categories. While this makes sense once you think about it — all of the so-called
minorities combined now add up to a majority — the sheer size of the market is sobering.

US Average Annual Expenditure Spending:
White vs. Hispanic, Black and Asian American (in dollars)
Categories	                           White	 TNGMDifference
Transportation	                        8,172	21,242 13,070
Food	                                  5,488	18,183 12,695
Insurance  Pensions	                  4,247	 14,897 10,650
Apparel	                               1,642	5,907 4,265
Healthcare	                            2,588	5,829 3,241
Entertainment	                         2,220	5,338 3,118
Education	                               791	3,625 2,834
Personal Care Products	                  536	  1,625  1,089
Furniture	                               427	906 479
Alcohol	                                 425	818 393
Laundry  Cleaning Supplies	             133	    448    315



Clients are grasping the significance of this, particularly in the retail/shopper space, where
customer experience is a fast-growing area of interest. Unlike with traditional marketing
communications via television, radio and print, advertisers can improvise a retail display-
and-search model and test its relevance in real time. Today’s retailers see firsthand the
effects of shopper marketing and can gauge whether their stores and customer experiences
are speaking to the audiences they serve.

Through the use of heat maps, some retailers and marketers are taking a precise approach
to The New General Market. The maps below illustrate where the most dynamic changes
are occurring across the United States.

Hispanic Population Density 2010                  Black Population Density 2010




                                                                                                 13
Asian American Population Density 2010




Media and The New General Market
America’s sweeping demographic shifts will have an effect far beyond just the shopper
experience. For our purposes, the coming transformations in media and content hold
the most intense interest.

To understand the impact of demographic shifts, we must first understand spending
patterns past and present and use that knowledge to project how media will change.

In addition to analyzing demographics in the nation’s largest cities, we analyzed the
designated market areas (DMAs) that most media buying agencies use for targeting.
The results were even more compelling. In nine of the 10 largest DMAs, The New General
Market already comprises more than 50% of the population. The remaining DMA — 
Boston — is at 49%. It’s no wonder brands are scrambling to target their messages
to The New General Market.

2010	            DMA	                           City                             % TNGM
    1	           New York	                      New York                               64
    2	           Los Angeles	                   Los Angeles                            69
    3	           Chicago	                       Chicago                                67
    4	           Philadelphia	                  Philadelphia                           61
    5	           Dallas-Fort Worth	             Dallas-Fort Worth                      70
    6	           San Francisco-	                San Francisco-                         56
	                Oakland-San Jose	              Oakland-San Jose                    54/69
 7	              Boston	                        Boston                                 49
 8	              Atlanta	                       Atlanta                                62
 9	              Washington DC	                 Washington DC                          63
 10	             Houston	                       Houston                                73



To amplify this data, OgilvyCULTURE met with the industry’s top media and content
partners and formed an alliance aimed at examining best practices and emerging offerings
for The New General Market. One factor stood out above all else — the impact of these
new demographics on technology, particularly on mobile and social media.




                                                                                             14
Advertisers and clients rightly look to digital as a way to create targeted and effective
communication. As the technology space formed in the 1990s, a digital divide emerged
between the general market and several minority groups. People in the general market
tended to have better connections to the Internet and greater access to email, and
therefore spent significantly more time online.

US Internet Use by Ethnicity
Ethnicity	                           2009	2010 2011
White (non-Hispanic)	               71.5%	 70.7% 70.9%
Black	                              11.5%	11.8% 11.8%
Hispanic	                           10.9%	11.2% 11.6%
Asian American	                      6.1%	  6.3%  6.5%
Other	                               1.3%	1.3% 1.3%



This disparity persists in traditional Internet use, but has been erased in the realms of mobile
and social media. The New General Market not only has caught up, but is in fact now the
driver of change in technology — one of the forces now shaping our culture. A study con-
ducted by eMarketer found that nearly half of Black and Hispanic consumers reported
having used a mobile device in 2009, versus 28% of Whites. A study by Pew Research also
shows that high mobile usage among minorities is not limited to online content. Black and
Hispanic users were more likely than Whites to participate in every mobile activity, from
sending and receiving text messages to taking pictures to playing games and accessing email.

Mobile Content Used by US Mobile Device Owners by Ethnicity, March–April 2009
(% of Respondents in Each Group)
Response	                           White	 BlackHispanic
Send/Receive Text	                   40%	   47%     59%
Take a Photo	                        15%	   22%     41%
Play a Game	                          7%	   12%     16%
Send/Receive Email	                  13%	   16%     21%
Access Internet	                     12%	   21%     23%
Record a Video	                       2%	    7%      8%
Play Music	                           6%	   23%     14%
Send/Receive IM	                      6%	   22%     14%
Get Map/Directions	                   3%	    4%      5%
Watch Videos	                         2%	    3%      5%
Did One of These	                    50%	   58%     70%



Mobile and smartphones are now in the vanguard of the new advertising frontier.
Advertisers and marketers are looking to develop relevant content for The New General
Market, paying special attention to foreign-language sports, entertainment and lifestyle
content for Hispanic users.




                                                                                                   15
But television remains the king of all media, whether it’s in the form of traditional digital
black box viewing or online via Hulu®, YouTube® or one of the other streaming services
now available. One audience in particular leads all ethnic groups when it comes to
television viewing: According to Nielsen, Blacks between the ages of 18 and 49 clock in
at a whopping 7 hours and 12 minutes a day. That’s more than 2 hours per day above the
national rate of 5 hours and 11 minutes and nearly 4 hours more than Asian Americans
watch (3 hours and 14 minutes). In other words, The New General Market can be reached
online, but not through a traditional PC. The best way to connect with them is via the
most traditional channel, the television.




                                                                                                16
Ogilvy  Mather’s new
approach: Cross‑Cultural
rather than General Market
or Multicultural
The segment shifts we saw in conjunction with our aging agency model led us to reevaluate
whether Ogilvy  Mather is increasingly trying to fit a square peg into a round hole.
And this led us to consider how to position the agency for the next 50 years. We realized
the question of GMA versus MCA is moot. The answer today is neither.

If we examine why we believe the agency model is broken, we can see that it’s partly
because of the way agencies and clients began to cheat at gathering insights.

A bit more background: Prior to the 1980 census, the industry was comprised of GMAs
and Black agencies — both of which were knowledgeable about their segments and thus
successful. Once the 1980 census correctly predicted the ascendancy of the Hispanic
population, the marketing budgets began to follow.


               CONSUMER                                                   CONSUMER
                INSIGHT                                                    INSIGHT
                                GENERAL
                                MARKET                  HISPANICS




                   BLACKS

 CONSUMER
  INSIGHT




This fully took hold after the 1990 census. The 1990s, of course, saw the introduction of
digital, which cut even deeper into most US brands’ already shrinking budgets for the
Black segment. By the end of the decade, the line item for Black marketing had fully
vanished into the general market box. This begs the question as to whether brands and
agencies are properly structured and planning correctly for The New General Market.


               CONSUMER                                                   CONSUMER
                INSIGHT                                                    INSIGHT
                                GENERAL
                                MARKET                  HISPANICS




                                                                                            18
When it comes to budgeting, most brands today consider only two audiences: General
Market and Hispanics. We believe this approach fails to deliver insights that are culturally
relevant across all segments (White, Black, Hispanic, Asian American and LGBT).

The new approach that Ogilvy  Mather is pursuing is cross-cultural. This new way of
doing business enables us to mine both the general and various multicultural markets for
insights, wants and needs.

General Market and                  Cross-Cultural
Multicultural Marketing             Marketing

Ethnic-based                        Total market
planning budget                     budget

Multiple creative                   Comprehensive
strategies                          creative strategy

Siloed                              Integrated
measurement                         measurement




Better targeting and service delivery
In today’s advertising world, clients can face a dizzying array of ideas and input.
Suppose they aspire to build their brand with five audience segments. To handle this
work, they might have five different agencies creating research projects and creative
briefs and executing five distinct marketing plans — all for a single brand problem.


                 CONSUMER                                                 CONSUMER
                  INSIGHT                                                  INSIGHT
                                        GENERAL
                                        MARKET            HISPANICS




                     BLACKS
                                                                      LGBTs
                                                ASIAN
 CONSUMER
  INSIGHT                                     AMERICANS
                                                                                     CONSUMER
                                                                                      INSIGHT


                                 CONSUMER
                                  INSIGHT




                                                                                                19
By contrast, our new cross-cultural marketing positioning enables an examination of the
“old” general market and newly relevant Hispanic, Black, Asian American and LGBT
 audiences. This model will serve as a bridge between all marketplaces, leading not only to
 a more streamlined business but also to better targeting and product/service positioning.

More relevant and effective advertising and communications
 Knowing that The New General Market will only continue to grow, we will be ideally
 poised to incorporate cross-cultural components when serving our clients. By incorporat-
 ing broader research and findings, we can generate creative briefs that are more informed
 and that firmly move Ogilvy  Mather out of the general market box and into one labeled
“total market.” Then we can measure our impact across all stages of the customer journey
 as well as across all consumer segments. Clients can focus on a comprehensive strategy
 that feels much more integrated and holistic.


                       THE BUSINESS  CULTURAL INSIGHTS



                           COMMUNICATIONS PLATFORM


                     ASIAN             GENERAL
   BLACKS                                               HISPANICS      LGBTs
                   AMERICANS           MARKET




                            CROSS-CULTURAL STRATEGY




Establishing the cross-cultural strategy requires significant investment and structural
change for both clients and the agency. The responsibility for adapting this approach does
not reside only within planning, creative, account and senior leadership; rather, it requires
internal embedding and talent acquisition, development and retention as well as retooled
day-to-day practices. Today we can deploy the cross-cultural strategy because of our talent,
value proposition and partners. The payback for making this commitment promises to be
profound: Moving forward, we will be able to offer clients the opportunity to understand
the cross-cultural value of their brand and the methodologies for maximizing that value.




                                                                                                20
“How does the
 Cross-Cultural model
 increase the value of
 my brand?”
Taking a page out of David A. Aaker’s book published in 1991, Managing Brand Equity,
we’ve developed strategic territories for how brands increase their brand value with
The New General Market (See page 25). We asked ourselves two questions: What defines
brand equity? How can brands increase their value?

The question we pose to clients and brands today is: If the demographic landscape has
changed or the customers who have traditionally purchased products have changed or are
changing as we have demonstrated in previous chapters, what is the new way of building
brand equity and increasing a brand’s value?

Over the last year we’ve been refining what we believe to be the future of building a brand
and a consumer relationship, and measuring the relevancy of The New General Market.

OgilvyCULTURE’s five key strategic territories
In order to develop our cross-cultural offering, we interviewed key clients and stakeholders
in both the current general market and multicultural spaces and augmented those findings
with desk research on the different ways brands are now targeting multicultural audiences.
We found our research complicated by the shifting boundaries between the general and the
multicultural markets. The clients we interviewed found it difficult to pinpoint a transition
point between their efforts to serve the two audiences.

We analyzed the ways in which more than 100 brands were marketed to Hispanic, Black,
Asian American and LGBT audiences separately. We eventually identified certain patterns
that we refined into five key strategies:

Cultural Community™
Cultural Currency™
Cultural Authenticity™
Cultural Confluence™
The Cultural Loop™

While we sought to avoid oversimplifying more than 40 years of multicultural and general
market executions, we needed a structured way of looking at how brands increase relevancy
and equity measures over time. These five elements create that framework. Faced with
today’s rapidly morphing landscape, in which brands are learning to engage socially and
through new and emerging channels, we’re still working out how to deploy these tactics as
part of a broad-based cross-cultural strategy funneled through various channels and touch
points along the customer journey.




                                                                                                22
The Cross-Cultural Strategic Territory Framework for Building Brand Relevancy and Equity

                                    • Heavy brand investment
                                    •  rands with low relevancy and equity
                                      B
                                      measures within the segments
                   Cultural
                   Community        •  ong-term commitment and no “in and
                                      L                                             Provides Value
                                      out” investments with the product or event    to Customer
                                                                                    by Enhancing
                                    •  nce the brand is established, provides
                                      O                                             Customer’s:
                                      high barriers to entry from the competition
                                                                                    •  elationship/
                                                                                      R
                                                                                      Processing of
                                                                                      Benefits
                                    • Low to medium brand investment
                                                                                    •  onfidence in
                                                                                      C
                                    •  rand with low relevancy and equity
                                      B                                               the Purchase
                                      measures                                        Decision
                                    •  orrowing equity from an established
                                      B                                             •  roduct/Brand
                                                                                      P
                   Cultural           brand/talent that has a relationship or
                   Currency                                                           Satisfaction
                                      trust with the segments
                                    •  rands receive immediate awareness
                                      B
                                      and consideration but do not establish
                                      high barriers to entry from the
                                      competition


                                    • Medium to high brand investment
                                    •  sually unique and authentic value
                                      U
 The New                              proposition
 General
                                    •  rand with high relevancy and low
                                      B
 Market
                   Cultural           equity or vice versa
 Strategic                                                                          Provides Value to
                   Authenticity
 Territories                        •  equires deep levels of consumer
                                      R                                             Firm by Enhancing:
 for Building                         commitment from heavy users of
 Brand Equity                                                                       •  fficiency and
                                                                                      E
                                      the brand
                                                                                      Effectiveness
                                    •  sually results in attracting new users
                                      U                                               of Marketing
                                      and loyal repeat purchasers                     Investment
                                                                                    • Brand Affinity
                                                                                    • Prices/Margins
                                    •  eavy investment to build the brand
                                      H
                                      across all segments                           • Brand Association
                                    •  sually the brand has high equity and
                                      U                                             • Trade Leverage
                                      relevancy measures within one key
                                      segment                                       •  ompetitive
                                                                                      C
                   Cultural                                                           Advantage
                   Confluence       •  he brand has a unique and ownable
                                      T
                                      value proposition
                                    •  esults in significant trial and usage,
                                      R
                                      usually creating a larger loyal base of
                                      consumers



                                    • Medium to high brand investment
                                    •  urpose-driven brand building for
                                      P
                                      The New General Market specific
                                      to the Hispanic, Black, Asian American
                   The Cultural       and LGBT segments
                   Loop             •  uilds high brand relevancy and
                                      B
                                      equity measures
                                    •  stablishes a deep relationship with
                                      E
                                      the segments and usually delivers
                                      brand loyalty




                                                                                                          23
cultural community ™
Participating in long-standing community-based cultural events and programs
Within many ethnic segments, people often strongly identify with community-based
events that celebrate a shared identity and carry cultural value down from generation
to generation. Take, for example, Calle Ocho, a street party staged by Miami’s sizable
Cuban American population; or the ESSENCE Music Festival, held annually in
New Orleans and widely attended by Blacks.

These “for the community, by the community” events have traditionally served to
strengthen the fabric of cultural communities, bringing extended families and friends
together around a common celebration to reinforce identity. For some brands, this is
an opportunity to introduce the brand to the community. For others, it’s a means of
reinforcing their long-standing support. Either way, the barriers to entry are usually low,
opening the door to the longer process of embedding the brand in community culture.

Caters well to :
Brands with low relevancy and low equity measures.

Risk/reward:
Depending on a brand’s levels of engagement — from, say, a sponsorship on the one hand,
to dedication of human resources and other forms of more tangible participation on the
other — it runs an expected risk of low initial payoff. Buying sponsorship rights will not
likely translate into deep affinity for the brand, at least in the short term.

When brands invest time and resources, the benefits are often rewarding. The Cultural
Community approach requires a long-term commitment; it’s the equivalent of the
residents of a tight-knit ethnic segment inviting the brands into their homes and offering
them the chance to prove they want a relationship.

For those brands that invest in the Cultural Community approach over time, the rewards
can be substantial. Demonstrating a commitment to a community’s shared culture signals
that the brand cares and is here to stay. The community’s younger members grow up
with the brand and see it as an ally — a friendly entity that’s investing in them personally.
Long-term brand loyalty often emerges as older generations endorse the products and
services they introduce to their progeny.




                                                                                                24
Calle Ocho
Calle Ocho started in 1978 as a way
to showcase Cuban culture in Miami.
Today over one million people come from
all over the world to attend this street
party, which is covered by press and major
networks and sponsored by many top
brands. Calle Ocho is renowned for its
music, with top Hispanic acts performing
during the weekend festival.




ESSENCE Music Festival
For three days hundreds of thousands
gather for concerts and community-based
events in New Orleans. The 2012 ESSENCE
Music Festival, presented by Coca-Cola,
drove more than 422,000 guests to the
city. According to Michelle Ebanks,
President of Essence Communications
Inc., “The ESSENCE Music Festival is the
ultimate destination for entertainment
and inspiration as we gather together to
celebrate culture and connect to our com-
munity with some of the hottest names in
music and entertainment.” Now in its 18th
year, The ESSENCE Music Festival is the
nation’s definitive African-American live
music and cultural experience.




                                             25
cultural currency ™
A partnership with talent or a prominent figure within the community
Sometimes, affinity by association helps. Prominent figures act not only as cultural icons,
but also as cultural gatekeepers. Brands that build associations/partnerships with talent
who’s built up cultural cachet and influence with a segment are borrowing cultural equity
to better reach and connect with that segment of consumers.

The most frequently used model is that of brands that engage talent (entertainment)
that “identifies with” a particular segment and has special authority to speak on its behalf.
Segments look to such brands for signals on what to trust (and brands to avoid) — 
a quasi – litmus test of trust.

Caters well to: 
Brands with low relevancy and low/medium equity measures.

Risk/reward:
As with Cultural Community, the Cultural Currency approach can serve as a needed
introduction between a brand and a community — a point of entry to establish an audience.
Instead of a community-based event, the channel for a relationship is through brand asso-
ciation via talent. Additionally, by borrowing cultural equity, brands may reap a particular
seal of approval — the equivalent of a reference from a well-trusted source.

But “quick entry” should not be conflated with “low risk.” Partnering through brand
association always carries inherit risk. Through association, the brand’s equity relies,
at least partially, on the equity of the talent. Should the talent lose his or her standing
in the community, so too might the brand.



                                                                Cîroc Vodka
                                                                After Diageo partnered with Sean
                                                               “Diddy” Combs, the brand grew 552%
                                                                from 2007 to 2010, replacing Belvedere
                                                                as the second-ranked vodka in the
                                                               “ultra-premium” category.




                                                                                                         26
cultural authenticity™
Connecting with The New General Market based on insights driven inward (multicultural) to outward
(general market), or vice versa
Most often, brands are practiced at connecting to a “general market” audience — one
with which they’re familiar — but face the challenge of building relevance with a specific
multicultural audience. As opposed to making an introduction (say, through an event
sponsorship), the Cultural Authenticity approach is a process of “getting to know you.”
Brands develop authentic relationships through the process of uncovering and utilizing
relevant cultural insights.

The best examples come from brands that use an insight most relevant to a particular
community. Distilling cultural insights requires heavy lifting by research, influencing
everything from product/service development to communications. Ultimately, the
approach calls for a high degree of insight and a dedication to reflecting that insight
in the marketplace.

Caters well to:
Brands with high relevancy and low equity measures, or vice versa.

Risk/reward:
Using Cultural Authenticity requires deep levels of understanding and commitment.
The best examples come from brands that, in their own way, create an organic bond with
the community. This requires a heavy investment in research or innovation during the
product development cycle, with the particular audience in mind. Sometimes brands
simply get it right from the beginning due to a deep cultural understanding of the total
market. But in general, Cultural Authenticity is not an easy tactic to execute because it
requires a powerful cultural insight rolled out in a holistic manner. The brands, in effect,
become natural extensions of the community. Brands that are successful at executing this
strategy often enjoy a long and profitable tenure with high barriers to category entry.



                                                          Honey Bunches of Oats
                                                          80% of Hispanics, regardless of fluency,
                                                          want bilingual packaging. The Honey
                                                          Bunches of Oats “Think Positive”
                                                          campaign marks the first time the
                                                          company has implemented a bilingual
                                                          pack promotion.




                                                                                                     27
cultural confluence ™
Turning a segment’s cultural values into attributes relevant to what’s considered the general market
When we reference Cultural Confluence, people sometimes think we’re suggesting
meshing or “watering down” the brand, thereby costing the brand its authenticity.
This is far from the truth. This cross-cultural approach is more accurately defined as
taking a holistic approach to the total marketplace.

Caters well to:
Brands with medium to high relevancy and/or medium to high equity measures.

Usually brands that are successful at this tactic have a high degree of initial trial and usage
measures and get a high degree of repeat usage.

Risk/reward:
This tactic helps brands increase loyalty among a larger base of consumers and establish
higher barriers to entry for competitors. We believe that as we continue to explore the
impact of The New General Market, we will begin to see more Cultural Confluence.



                                                              Red Rooster
                                                              After a celebrated run as executive
                                                              chef at Aquavit Restaurant, the Ethiopia-
                                                              born Marcus Samuelsson has built
                                                              Red Rooster, critically heralded and
                                                              reflective of Harlem’s many cultures.
                                                              The restaurant was named after the
                                                              legendary Harlem speakeasy that
                                                              was located at 138th Street and 7th
                                                              Avenue, where neighborhood folk, jazz
                                                              greats, authors, politicians and some
                                                              of the most noteworthy figures of the
                                                              20th century    uch as Adam Clayton
                                                                            —s
                                                              Powell Jr., Nat King Cole and James
                                                              Baldwin    ould converge to enjoy drinks
                                                                       —w
                                                              and music in an inviting atmosphere.
                                                              Since opening, it has attracted a world of
                                                              patrons. Red Rooster has hosted everyone
                                                              from the president of the United States
                                                              to Halle Berry. Red Rooster has embraced
                                                              today’s Harlem with that same spirit of
                                                              inclusiveness and community from its
                                                              past and present.




                                                                                                           28
the cultural loop ™
Linking a brand with a social cause or purpose
Purpose-driven brands — those brands that put their capabilities to use in service of
a pressing social problem — are sometimes neglected within the context of multicultural
marketing. And yet research definitively points toward the conclusion that multi-
cultural segments respond to and support those brands that address relevant social
issues — often more so than the general market.

“Social issues” is a broad umbrella, from sustainability to health to education, and much
 in between. The Cultural Loop poses the question: What issues are most important
 to the community, and how can brands go beyond business as usual to address them?
 This approach, broadly speaking, is about responding to what matters by playing a con-
 structive role in cultural communities.

Caters well to:
Brands with high relevancy and equity measures.

Risk/reward:
Research suggests that affinity and loyalty increase for those brands that effectively go
beyond business as usual. For cultural communities in particular, The Cultural Loop can
work toward building trust, demonstrating the brand’s commitment to “what matters”
and conviction to do what’s best for the audience it serves.

However, good intentions are not enough. Social issues must be relevant both to the
community and to a brand’s own capabilities. Putting resources behind a certain social
issue that the brand has little license to address will likely hit a note of dissonance and
risk inauthenticity.




Black Girls Rock!                                      b condoms
Black Girls Rock! Inc. is a nonprofit youth empower-   b condoms focuses on bettering sexual health
ment and mentoring organization established to         practices among four main target audiences:
promote the arts for young women of color, as well     Blacks, Hispanics, 50 and over, and gay and
as to encourage dialogue and analysis of the ways      bisexual males. b condoms reinvests a portion
women of color are portrayed in the media. Black       of its profits in organizations across the
Girls Rock! offers unique programs that range from     country that support sexually transmitted
DJ academies to cuisine tasting. The organization      disease education and prevention in the most
has also established an awards show on BET, which      affected areas.
was extremely successful in its inaugural year.


                                                                                                       29
Releasing the value of
a Cross-Cultural brand
The term “cross-cultural marketing” dates back to the 1930s, but circumstances did not
converge in a way that allowed the advertising industry to fully embrace the concept
until now. Because of global and domestic demographic shifts, a cross-cultural approach
is suddenly essential in terms of analyzing the changing consumer and gaining deeper
insights into The New General Market. With current technology allowing us to better
target within this evolving audience, we will be poised to meet the demand for effective
advertising and produce a greater ROI.

Below is a case study that demonstrates how we solved a client’s total market communica-
tions and business opportunity.

Case study: A total market strategy using the cross-cultural approach
In 2008, a global retail brand that had matured in the United States encountered a down-
turn when the economy went into a nosedive. The number of store visitors was declining,
and growth through expansion was not an option.

The challenges presented to OgilvyCULTURE were as follows: First, increase the number
of visits by 2015. Second, demonstrate what OgilvyCULTURE means by a “total market”
approach — and explain the benefits of such a strategy. And third, inform the regional and
local markets.

An investigation into the retailer’s current approach revealed some interesting facts.
The first insight was that the retailer, seeking to find new customers, had only gone after
Hispanics — but that segment comprised less than half (48%) of the total population of
potential new customers. Another revelation was that something was being lost in transla-
tion: The retailer’s positioning did not address each of the segments in a meaningful
way. Further, we discovered that there was no consistent strategy that linked the national
market to regional and local markets.

Given the opportunity, OgilvyCULTURE responded with a four-pronged approach.
Initially, we sized and segmented the opportunity. Then we performed a qualitative assess-
ment and a quantitative assessment designed to show that we were correct in our hypothesis
about where the retailer’s efforts were falling short. Once our theory was validated, we
developed a cross-cultural strategy and followed that up by designing a cross-cultural
experience plan.

The outcome? The retailer was able to understand the total market opportunity and the
need to prioritize all segments. Rather than create a one-size-fits-all multicultural strategy
that was in fact geared only toward Hispanics, it executed a communications strategy that
included Blacks, Asian Americans and the LGBT community in addition to the general
market and Hispanics. The retailer also launched an integrated experience strategy that was
consistent across the national and regional/local markets. Finally, we put in place a measure-
ment and effectiveness plan to track results.




                                                                                                 31
The Ogilvy  Mather Cross-Cultural Matrix
Is there an enormous untapped value in this approach? We are just beginning to tap
the surface. Usually the last question we get from clients after discussing the strategic
territories is “Where is my brand with regard to the relevancy or equity measures within
The New General Market?”

Our view is we must understand where the brand is with regard to cross-cultural
equity measures. Over the past year, we’ve measured relevancy through qualitative and
quantitative tools, stakeholder interviews and client sources. After assessing the brand,
we plot where it falls within the Ogilvy  Mather Cross-Cultural Matrix (see below).

                                                           Relevancy

                                             Growing                  Strong
                                          Cross-Cultural           Cross-Cultural
                                              Equity                   Equity
                         Category Index




                                          (Small, Strong Brands)   (Large, Strong Brands)




                                              Little                 Declining
                                          Cross-Cultural           Cross-Cultural
                                              Equity                   Equity
                                              (Small, Weak
                                                                   (Large, Weak Brands)
                                             or New Brands)




By plotting the brand’s current position within the Cross-Cultural Matrix, we are
able to understand how the brand is positioned within The New General Market and
begin to formulate a hypothesis as to how to increase the brand’s value with The New
General Market.

We develop a strategy to build the brand’s relevancy and equity measures with The
New General Market, based on the brand’s position within the Cross-Cultural Matrix.




                                                                                            32
The Ogilvy  Mather Cross-Cultural Matrix

                                                     Relevancy



                                          Cultural               Cultural
                                          Currency              Confluence




                         Category Index
                                                       The
                                                     Cultural
                                                      Loop

                                           Cultural              Cultural
                                          Community             Authenticity




As presented earlier in this report, these are our proprietary strategic territories. Using
this methodology and approach helps us understand what a brand needs to work on
to strengthen its positioning and how to increase the value of the brand over time with
The New General Market. The insights we gain allow us to evaluate various tactics based
on the brand’s cross-cultural assessment.

What’s next?
In the fall of 2012, through a joint WPP partnership using BrandZ™, Ogilvy  Mather,
Millward Brown and Firefly Millward Brown will release the marketing and advertising
industry’s first Cross-Cultural Index. It is a proprietary approach we’ve developed to
measure how cross-cultural a brand is based on an assessment. This approach will allow
us to reassess a brand’s market value and other brand metrics for the “Total Market”
within BrandZ™.
 
The beta version of the Cross-Cultural Index will rank and score a brand’s equity within
The New General Market. It is our belief that once this tool is released and refined, we truly
will have a “Total Market” view of a brand’s value in the marketplace. Companies will
have a better understanding of how to elevate their brand’s value using our cross-cultural
strategies and how to invest their assets in The New General Market. In the end we will
have a way to measure the Total Market for effective and inspiring communications for all.

The marketplace continues to evolve. With this report, we have established a framework
for addressing The New General Market needs for current and future brands that engage
with our services in this fast-changing world. We believe there is a need to change our
current methodology in order to produce deeper consumer insights, better targeting and
more effective communications. If you have any questions or comments, please do not
hesitate to contact Jeffrey Bowman at jeffrey.bowman@ogilvy.com.




                                                                                                 33
About the author
Jeffrey Bowman
                             Cross-Cultural Practice Lead

Jeffrey leads the North American Cross-Cultural Practice at Ogilvy  Mather, one of the
largest advertising and communications agencies in the world. Ogilvy  Mather’s cross-
cultural approach is viewed as an industry breakthrough because of the Inside-Outside
strategy, “The New General Market” approach, partnerships and client service model.

Since its launch in 2011, the Cross-Cultural Practice has nabbed eight global brands looking
to target The New General Market. Jeffrey has partnered with John Seifert, Chairman and
CEO of Ogilvy  Mather North America, and Donna Pedro, Chief Diversity Officer of
Ogilvy  Mather North America, to create a new communications model that serves as a
bridge between the general market and multicultural marketing communications models:
a “Total Market” communications model. This model has been celebrated in The New York
Times, Advertising Age, The Economist and other industry publications as well as at conferences.

Ogilvy  Mather’s depth and diversity of talent allowed Jeffrey to bring his experience
to a space thirsty for innovation. Jeffrey has more than 15 years of experience in marketing
strategy, brand management, experience planning, digital strategy, channel strategy and
marketing effectiveness with global brands within the beverage, consumer packaged goods,
retail and technology industries. Still in its infancy, OgilvyCULTURE is recognized as
a very promising practice for the agency.

When Jeffrey is not working, he enjoys spending time with his wife and two daughters in
New York City. Jeffrey holds an MBA in Marketing from Clark Atlanta University and
a BS in Marketing from South Carolina State University.




Contact us:	 contact.ogilvyculture@ogilvy.com
Follow us: 	 @ogilvyculture
Learn more:	 ogilvyculture.com
Facebook:	facebook.com/ogilvyculture




                                                                                                   35
References
Chart/Visual	                          Page	Source

1980 vs. 2010 Population Growth Rates 	 8	    1990 via World Databank, 2010 via CIA
		                                            World Factbook

Survey Data	                            9	    OgilvyCULTURE  LinkedIn Survey

Multicultural Spending and Shift to 	 9	      The Nielsen Company
Emphasize Hispanic Advertising		

Black Media Spend 	                     10	   Nielsen Report Media Spend 2009

Global Population by Age 	              10	   US Census Bureau International Database

Race and Ethnicity Chart 	 11	                Ad Age, “2010 America: What the 2010
		                                            Census Means for Marketing and
		                                            Advertising,” by Peter Francese

TNGM by Region, 1980 – 2010 	           12	   US Census Bureau

TNGM by State, Top 10 Populated,	 12	         US Census Bureau
1980 – 2010 		

TNGM by City, Top 25 Populated, 	 13	         US Census Bureau
1980 – 2010 		

Multicultural Buying Power 	 13	 Selig Center for Economic Growth, Terry
		                               College of Business, University of Georgia,
		                               US Average Annual Expenditure

Household Expenditure Spending: 	   14	       US Department of Labor, Bureau of Labor
Hispanic, Black and Asian American		          Statistics, Consumer Expenditure Survey

2010 Census Tract Heat Map, 	 14	             Data from US Census Bureau, Map via
% Hispanic 		                                 SocialExplorer

2010 Census Tract Heat Map, 	 14	             Data from US Census Bureau, Map via
% Non-Hispanic, Black 		                      SocialExplorer

2010 Census Tract Heat Map, 	   15	           Data from US Census Bureau, Map via
% Non-Hispanic, Asian American		              SocialExplorer

Top 10 DMAs and % TNGM in City 	 15	          The Nielsen Company Local Television
		                                            Market Estimates; US Census Bureau

Technology Usage	 16	 Mintel, Pew Research Center, eMarketer, IDC,
		                    US Census: Aside from Total Market, email
		                    assumptions are based on Census data and
		                    technology adoption rate




                                                                                        37
© Ogilvy  Mather, 2012


                          38

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Omcross culturalreport

  • 2. The Cross-Cultural Report Jeffrey Bowman Cross-Cultural Practice Lead Ogilvy Cross-Cultural Practice
  • 3. Contents Introduction 2 Contributors 4 The changes roiling the industry 6 Ogilvy Mather’s new approach: Cross-Cultural rather than General Market or Multicultural 17 “How does the Cross-Cultural model increase the value of my brand?” 21 Releasing the value of a Cross-Cultural brand 30 About the author 34 References 36
  • 5. If you’ve paid even the slightest attention to popular culture in the last couple of years, you’re well aware of the television phenomenon Mad Men, a show about a fictional advertising agency set 50 years in the past. The story, of course, fills in the timeline of America throughout the 1960s via one set of highly creative (if also exceedingly hedonistic) ad men and the campaigns they create. There’s a rich irony to this. At precisely the time when America is besotted with its past, the future is threatening to run away from us. Over the last decade, both in the United States and globally, the advertising industry and marketplace have radically changed. Digital is the norm, social media is changing the way we reach and have conversations with consumers, and agencies are turning toward the emerging markets — Brazil, Russia, India, China — many believe will be the engines of global growth for years to come. At Ogilvy Mather, we too foresee a bright future for those fast-growing economies. But we’re equally excited about business right here at home. Ogilvy Mather sees a tremendous domestic opportunity — one that doesn’t depend on uncontrollable macro- economic factors or a zero-sum game among advertising combatants. Instead, we see a whole host of demographic changes in the United States that add up to a fundamental repositioning of what we call the general market — and that present compelling new possibilities for growth. We call this new mass market “The New General Market” (TNGM). We’ve arrived at this important moment motivated by two factors. The first, as we explain below, is that outside forces are fundamentally changing the advertising world. The way Don Draper and his Mad Men cohorts did business is surprisingly similar, in some respects, to how present-day advertising is conducted — and that model is dangerously antiquated. The good news is that we’re ideally positioned to take advantage of a tidal wave of change: Ogilvy Mather has emerged from the global economic downturn in robust health. That leads us to the second reason for overhauling our model: We continually rethink the way we do things because we are Ogilvy Mather. In the year of our founder’s 101st birthday, we believe it’s important to reengage with some of David Ogilvy’s most enduring ideas. Specifically, we are driven by what David called “Divine Discontent.” There is no “good enough,” this idea says. There is always a chance to improve. We have happened upon a major shift in the way we perceive and market to our clients’ cherished customers. In the following pages we explain this shift and the manner in which we need to respond to it. The stakes are high. It’s no exaggeration to say that this is a change-or-die moment for many players in our industry. We believe that with this blueprint we are poised to prosper rather than perish. And we believe that David, who had great respect for the consumer and a deeply held belief in constant adaptation, would have approved. 3
  • 7. Ashley Mackel Asten Morgan, Vibe Lifestyle Network Brickson Diamond, founder, Blackhouse Foundation Caroline Washington CarolLyn Colon Christine Villanueva Deborah Balme Dolly Turner and Felicia Walker Benson, NorthStar Group: Jones Magazine Donna Pedro Enrique Urquiola Erin Goldson Felipe Korzenny, PhD, coauthor of Hispanic Marketing: A Cultural Perspective Jeremy Katz John Seifert Kathy Whitlock, Univision Ogilvy Mather’s Professional Networks — Administrative Professional Network, Black Diaspora, LatinRED, Ogilvy Pride, RedLotus, Women’s Leadership, Working Parents Network, Young Professional Network Peter Francese, founder and publisher of American Demographics Magazine Rebecca Clayton Sacha Xavier Sidra Smith, Gate Pass Entertainment Willow Gross 5
  • 9. The agency model is old If you watch Mad Men, you may be struck by one remarkable truth: Despite the outdated social mores — the rampant daytime drinking and womanizing, the blue haze of cigarette smoke drifting through the office — the fictional characters of Sterling Cooper Draper Pryce still divide up the marketplace the same way we do. A bit of history: The first ad agency catering to the general market opened in 1843. A pioneering ethnic agency came onto the scene in 1956, creating the segmented structure to this day. The advertising industry still divides itself into general market agencies (GMAs) and multicultural agencies (MCAs), and our clients generally adhere to this model. What’s so different, and is this a problem? We’ll put it plainly: The bedrock industry practice of marketing to either general or ethnic markets has remained unchanged since the Eisenhower administration. This model has left us seriously out of step with the starkly altered demographics of the United States in 2012. The American population has changed profoundly and will continue to evolve in the years ahead. In fact, as these demographic changes grow in magnitude, the whole notion of what constitutes a minority must surely change. Demographic1980 Note: he population was divided into five ethnic segments —  T White, Black, American Indian/Aleut Eskimo, Asian White83.1% American or Pacific Islander, and other races — until Black11.7% March 1989. Beginning with the 2000 census, Hispanic Asian American 1.5% status was added to census forms, in recognition of the fact that Hispanics may be of any race. Thus, while Hispanic6.4% it is now possible to ascertain exact percentages of non-Hispanic minorities, pre-2000 figures do not allow 2010 this distinction. White68.0% Black12.6% Asian American 4.8% Hispanic13.9% Point Change White-15.1 Black+0.9 Asian American +3.3 Hispanic+7.4 Parts of our model have, in fact, morphed to reflect America’s dramatically shifting demographics. Our business offerings now reflect the importance of Hispanics, Blacks, and Asian Americans and the Lesbian, Gay, Bisexual and Transgender (LGBT) community. However, as these segments have ballooned, the desire among clients for MCA services has grown as well, and agencies more specifically focused on those markets have often been better positioned to meet those needs. But let there be no mistake: As the populations and spending power of minority consumers continue to grow, the model that divides business between general market and MCAs is 7
  • 10. increasingly obsolete. If you listen in on the whispered conversations in client meeting rooms and agency huddles, you’ll hear people questioning the viability of this 60-year- old structure. And for good reason. In a recent survey, we asked chief marketing officers, executive vice presidents and directors of marketing a few questions about their level of satisfaction with both the GMAs and MCAs with which they have worked. We found they were satisfied with neither — primarily because of the agencies’ inability to deliver integrated communications across the two platforms. Question: On a scale of 1 to 5, with 5 being the highest, how would you rate your general market advertising and/or marketing agency? 1 Rating: 7.1% The most common comments were “Did not bring real breakthrough 2 Rating: 21.4% ideas,” “Too tied to the process and politics” and “Did not drive things across channels to create a holistic, surround approach or really 3 Rating: 42.9% activate the idea.” Another was “Limited creative thinking; 4 Rating: 28.6% watered-down messaging to appeal to mass audiences.” 5 Rating: 0.0% We asked the same executives about their multicultural advertising and/or marketing agency. 1 Rating: 50.0% Most respondents did not have an MCA of record and instead used one 2 Rating: 14.3% on a project-by-project basis. One comment was “Only focused on Hispanic market with same/similar messaging as general market. 3 Rating: 28.6% Not truly differentiated to meet the true needs of this target.” 4 Rating: 0.0% 5 Rating: 7.1% Moreover, clients are frustrated that they have to endure multiple and seemingly redundant meetings and billings in order to solve a single problem: how to build the brand. And that effort isn’t always translating into the proper execution. Clients have responded to the tremendous growth of the Hispanic market by shifting more of their budgets to focus on that audience; despite this trend, however, measured media spend for that population actually decreased from 2008 to 2009 by nearly 5%. Spanish-Language Media Spend (in millions) Q3 ’08 – Q2 ’09 Q3 ’07 – Q2 ’08 Point Change Network and Cable TV $3,199.0 $3,265.8 -2.0% Spot TV $1,521.1 $1,753.3 -13.2% Spot Radio $569.0 $586.8 -3.0% National Magazines $146.7 $177.9 -17.5% Local Newspapers $88.6 $111.3 -20.3% Total $5,524.5 $5,895.0 -6.3% 8
  • 11. The Black community saw even more of a disparity: Media spend for that market is down by more than 7%. Black Media Spend (in millions) Q3 ’08 – Q2 ’09 Q3 ’07 – Q2 ’08 Point Change Spot Radio $794.1 $851.4 -6.7% Cable TV $529.0 $495.7 6.7% National Magazines $452.0 $578.2 -21.8% Syndicated TV $45.2 $88.1 -48.7% Network TV $27.3 $31.5 -13.3% Total $1,847.6 $2,044.9 -9.6% This has left brands with a dearth of culturally relevant communications for various communities, and the current agency model is not flexible enough to address the problem. In theory, GMAs speak to nearly 70% of the marketplace, and MCAs cover the remaining 30%. In practice, overall media spend for the United States is tilted steeply toward the general market: The media buy for that segment chews up 93% of a $117B industry. So, not only is the system clunky and frustrating for clients, it’s also increasingly ill-suited to the task at hand. In a multihued nation, the advertising business looks alarmingly monochrome. As presently structured, everybody loses. Clients reach only part of their audience. Advertisers and marketers fall short of their benchmarks. The good news is that all of this is avoidable, if we begin targeting The New General Market. % of World Population by Age 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 0-24 25-49 50-74 75-100+ Target markets have changed Given the dissatisfaction with — and obvious shortcomings of — the GMA and MCA model, it’s difficult to fathom how the old ways have continued to endure. There are valid reasons for the longevity of the status quo: Many GMAs have limited experience and skill in the multicultural space, and each type of agency naturally tends to feel protective of its own position. But there is one undeniable truth we can no longer ignore: A new general market 9
  • 12. is forcing change in the advertising world, whether we’re ready for it or not. We are in the midst of one of the largest shifts in population and purchasing behavior in our nation’s history. It’s time to adapt. OgilvyCULTURE introduced The New General Market in 2010 to create a distinction between the old general market and multicultural advertising model and the new cross-cultural model we built. The New General Market recognizes the altered global demographics created by burgeoning populations of youths, of members of religions outside the Judeo-Christian tradition, and of women. Within the United States, as we’ve mentioned, the changes in demographics are just as compelling. According to 2010 census data, we have a population that looks remarkably different than it did 30 years ago. Here in the United States, The New General Market includes the Hispanic, Black, Asian American and LGBT audiences, which make up a combined purchasing demographic superpower that now constitutes more than 40% of the population. US Race Ethnicity White 200.2 16% Hispanic 50.0 White 12% Black 37.6 Hispanic Black Asian American 13.6 Asian American 4% Multiracial 65% Other 2% Multiracial 4.8 1% Other 2.8 0 50 100 150 200 Population (in millions) Percentage of Total Population It is important to understand not only the demographic changes but also where those changes have taken place. Below is a look at how the demographics have changed in the United States since the 1980 census was completed. 1980 Census, Hispanics 2010 Census, Hispanics 19% 14% 8% West 8% 52% South 42% Midwest Northeast 21% 36% 10
  • 13. Starting with that census, Hispanics began to post record population gains. Growth in the Black community has been less dramatic, but that market has shifted in terms of geographic density. 1980 Census, Blacks 2010 Census, Blacks 12% 9% 17% West 23% South 44% 56% Midwest Northeast 18% 21% When we analyzed the numbers state by state to compare the changes, the facts were arresting. More than 50% of the people now living in California and Texas are firmly in The New General Market. These are our two largest states in terms of population, and their impact on elections, retail and education, as well as on media and advertising spend, should not be underestimated. 2010 Census, Top 10 States Rank State % Hispanic % Black % Asian American % TNGM 1 CA 38 6 13 56 2 TX 38 12 4 53 3 NY 18 14 7 39 4 FL 23 15 2 40 5 IL 16 14 5 35 6 PA 6 11 9 19 7 OH 3 12 2 17 8 MI 4 14 2 21 9 GA 9 30 9 42 10 NC 8 21 2 32 We were also struck by The New General Market’s prevalence in America’s top 10 most populous cities. In each of the 10, the combined populations of Hispanics, Blacks and Asian Americans account for at least 50% of the city’s total population. The New General Market accounts for more than 60% of the population in five of these cities, and in three — Houston, San Antonio and Dallas — it comprises 70% or more of the residents. 11
  • 14. 2010 Census, Top US Cities Rank City State % Hispanic % Black % Asian American % TNGM 1 New York NY 29 23 13 64 2 Los Angeles CA 49 9 11 69 3 Chicago IL 29 32 5 67 4 Houston TX 44 23 6 73 5 Philadelphia PA 12 42 6 61 6 Phoenix AZ 41 6 3 50 7 San Antonio TX 63 6 2 72 8 San Diego CA 29 6 16 51 9 Dallas TX 42 25 3 70 10 San Jose CA 33 3 32 68 We’re not necessarily surprised by these massive demographic changes — but we are somewhat taken aback by the speed with which they have occurred, given that most predictions estimated they wouldn’t happen until 2050. These shifts should fundamentally alter our approach to the marketplace. As an agency, we can no longer afford to be put into a traditional general market box if we want to be able to deliver relevant and effective communications and meet all of our clients’ needs. In order to serve The New General Market in the United States, the marketing communications industry must change its service model, starting with the hiring of a workforce that mirrors The New General Market. What do these changes mean to advertising? In order to effectively speak in a relevant way to The New General Market, we need to understand more than just the raw numbers. We must also fully grasp the changing purchasing behavior of The New General Market. After all, the combined spending power of Hispanics, Blacks, Asian Americans and multiracial American communities is larger than the GDP of many global markets like Brazil, India, Spain, Russia, Australia and Argentina. Multicultural Buying Power 1990–2015 (in billions of dollars) 1,600 1,400 1,200 1,000 Hispanic 800 Black Asian American 600 Multiracial 400 200 0 1990 2000 2010 Projected 12
  • 15. Looking closer, we are faced with an even more surprising realization. On a per-household basis, The New General Market outspent what’s considered to be the general market today in most categories. While this makes sense once you think about it — all of the so-called minorities combined now add up to a majority — the sheer size of the market is sobering. US Average Annual Expenditure Spending: White vs. Hispanic, Black and Asian American (in dollars) Categories White TNGMDifference Transportation 8,172 21,242 13,070 Food 5,488 18,183 12,695 Insurance Pensions 4,247 14,897 10,650 Apparel 1,642 5,907 4,265 Healthcare 2,588 5,829 3,241 Entertainment 2,220 5,338 3,118 Education 791 3,625 2,834 Personal Care Products 536 1,625 1,089 Furniture 427 906 479 Alcohol 425 818 393 Laundry Cleaning Supplies 133 448 315 Clients are grasping the significance of this, particularly in the retail/shopper space, where customer experience is a fast-growing area of interest. Unlike with traditional marketing communications via television, radio and print, advertisers can improvise a retail display- and-search model and test its relevance in real time. Today’s retailers see firsthand the effects of shopper marketing and can gauge whether their stores and customer experiences are speaking to the audiences they serve. Through the use of heat maps, some retailers and marketers are taking a precise approach to The New General Market. The maps below illustrate where the most dynamic changes are occurring across the United States. Hispanic Population Density 2010 Black Population Density 2010 13
  • 16. Asian American Population Density 2010 Media and The New General Market America’s sweeping demographic shifts will have an effect far beyond just the shopper experience. For our purposes, the coming transformations in media and content hold the most intense interest. To understand the impact of demographic shifts, we must first understand spending patterns past and present and use that knowledge to project how media will change. In addition to analyzing demographics in the nation’s largest cities, we analyzed the designated market areas (DMAs) that most media buying agencies use for targeting. The results were even more compelling. In nine of the 10 largest DMAs, The New General Market already comprises more than 50% of the population. The remaining DMA —  Boston — is at 49%. It’s no wonder brands are scrambling to target their messages to The New General Market. 2010 DMA City % TNGM 1 New York New York 64 2 Los Angeles Los Angeles 69 3 Chicago Chicago 67 4 Philadelphia Philadelphia 61 5 Dallas-Fort Worth Dallas-Fort Worth 70 6 San Francisco- San Francisco- 56 Oakland-San Jose Oakland-San Jose 54/69 7 Boston Boston 49 8 Atlanta Atlanta 62 9 Washington DC Washington DC 63 10 Houston Houston 73 To amplify this data, OgilvyCULTURE met with the industry’s top media and content partners and formed an alliance aimed at examining best practices and emerging offerings for The New General Market. One factor stood out above all else — the impact of these new demographics on technology, particularly on mobile and social media. 14
  • 17. Advertisers and clients rightly look to digital as a way to create targeted and effective communication. As the technology space formed in the 1990s, a digital divide emerged between the general market and several minority groups. People in the general market tended to have better connections to the Internet and greater access to email, and therefore spent significantly more time online. US Internet Use by Ethnicity Ethnicity 2009 2010 2011 White (non-Hispanic) 71.5% 70.7% 70.9% Black 11.5% 11.8% 11.8% Hispanic 10.9% 11.2% 11.6% Asian American 6.1% 6.3% 6.5% Other 1.3% 1.3% 1.3% This disparity persists in traditional Internet use, but has been erased in the realms of mobile and social media. The New General Market not only has caught up, but is in fact now the driver of change in technology — one of the forces now shaping our culture. A study con- ducted by eMarketer found that nearly half of Black and Hispanic consumers reported having used a mobile device in 2009, versus 28% of Whites. A study by Pew Research also shows that high mobile usage among minorities is not limited to online content. Black and Hispanic users were more likely than Whites to participate in every mobile activity, from sending and receiving text messages to taking pictures to playing games and accessing email. Mobile Content Used by US Mobile Device Owners by Ethnicity, March–April 2009 (% of Respondents in Each Group) Response White BlackHispanic Send/Receive Text 40% 47% 59% Take a Photo 15% 22% 41% Play a Game 7% 12% 16% Send/Receive Email 13% 16% 21% Access Internet 12% 21% 23% Record a Video 2% 7% 8% Play Music 6% 23% 14% Send/Receive IM 6% 22% 14% Get Map/Directions 3% 4% 5% Watch Videos 2% 3% 5% Did One of These 50% 58% 70% Mobile and smartphones are now in the vanguard of the new advertising frontier. Advertisers and marketers are looking to develop relevant content for The New General Market, paying special attention to foreign-language sports, entertainment and lifestyle content for Hispanic users. 15
  • 18. But television remains the king of all media, whether it’s in the form of traditional digital black box viewing or online via Hulu®, YouTube® or one of the other streaming services now available. One audience in particular leads all ethnic groups when it comes to television viewing: According to Nielsen, Blacks between the ages of 18 and 49 clock in at a whopping 7 hours and 12 minutes a day. That’s more than 2 hours per day above the national rate of 5 hours and 11 minutes and nearly 4 hours more than Asian Americans watch (3 hours and 14 minutes). In other words, The New General Market can be reached online, but not through a traditional PC. The best way to connect with them is via the most traditional channel, the television. 16
  • 19. Ogilvy Mather’s new approach: Cross‑Cultural rather than General Market or Multicultural
  • 20. The segment shifts we saw in conjunction with our aging agency model led us to reevaluate whether Ogilvy Mather is increasingly trying to fit a square peg into a round hole. And this led us to consider how to position the agency for the next 50 years. We realized the question of GMA versus MCA is moot. The answer today is neither. If we examine why we believe the agency model is broken, we can see that it’s partly because of the way agencies and clients began to cheat at gathering insights. A bit more background: Prior to the 1980 census, the industry was comprised of GMAs and Black agencies — both of which were knowledgeable about their segments and thus successful. Once the 1980 census correctly predicted the ascendancy of the Hispanic population, the marketing budgets began to follow. CONSUMER CONSUMER INSIGHT INSIGHT GENERAL MARKET HISPANICS BLACKS CONSUMER INSIGHT This fully took hold after the 1990 census. The 1990s, of course, saw the introduction of digital, which cut even deeper into most US brands’ already shrinking budgets for the Black segment. By the end of the decade, the line item for Black marketing had fully vanished into the general market box. This begs the question as to whether brands and agencies are properly structured and planning correctly for The New General Market. CONSUMER CONSUMER INSIGHT INSIGHT GENERAL MARKET HISPANICS 18
  • 21. When it comes to budgeting, most brands today consider only two audiences: General Market and Hispanics. We believe this approach fails to deliver insights that are culturally relevant across all segments (White, Black, Hispanic, Asian American and LGBT). The new approach that Ogilvy Mather is pursuing is cross-cultural. This new way of doing business enables us to mine both the general and various multicultural markets for insights, wants and needs. General Market and Cross-Cultural Multicultural Marketing Marketing Ethnic-based Total market planning budget budget Multiple creative Comprehensive strategies creative strategy Siloed Integrated measurement measurement Better targeting and service delivery In today’s advertising world, clients can face a dizzying array of ideas and input. Suppose they aspire to build their brand with five audience segments. To handle this work, they might have five different agencies creating research projects and creative briefs and executing five distinct marketing plans — all for a single brand problem. CONSUMER CONSUMER INSIGHT INSIGHT GENERAL MARKET HISPANICS BLACKS LGBTs ASIAN CONSUMER INSIGHT AMERICANS CONSUMER INSIGHT CONSUMER INSIGHT 19
  • 22. By contrast, our new cross-cultural marketing positioning enables an examination of the “old” general market and newly relevant Hispanic, Black, Asian American and LGBT audiences. This model will serve as a bridge between all marketplaces, leading not only to a more streamlined business but also to better targeting and product/service positioning. More relevant and effective advertising and communications Knowing that The New General Market will only continue to grow, we will be ideally poised to incorporate cross-cultural components when serving our clients. By incorporat- ing broader research and findings, we can generate creative briefs that are more informed and that firmly move Ogilvy Mather out of the general market box and into one labeled “total market.” Then we can measure our impact across all stages of the customer journey as well as across all consumer segments. Clients can focus on a comprehensive strategy that feels much more integrated and holistic. THE BUSINESS CULTURAL INSIGHTS COMMUNICATIONS PLATFORM ASIAN GENERAL BLACKS HISPANICS LGBTs AMERICANS MARKET CROSS-CULTURAL STRATEGY Establishing the cross-cultural strategy requires significant investment and structural change for both clients and the agency. The responsibility for adapting this approach does not reside only within planning, creative, account and senior leadership; rather, it requires internal embedding and talent acquisition, development and retention as well as retooled day-to-day practices. Today we can deploy the cross-cultural strategy because of our talent, value proposition and partners. The payback for making this commitment promises to be profound: Moving forward, we will be able to offer clients the opportunity to understand the cross-cultural value of their brand and the methodologies for maximizing that value. 20
  • 23. “How does the Cross-Cultural model increase the value of my brand?”
  • 24. Taking a page out of David A. Aaker’s book published in 1991, Managing Brand Equity, we’ve developed strategic territories for how brands increase their brand value with The New General Market (See page 25). We asked ourselves two questions: What defines brand equity? How can brands increase their value? The question we pose to clients and brands today is: If the demographic landscape has changed or the customers who have traditionally purchased products have changed or are changing as we have demonstrated in previous chapters, what is the new way of building brand equity and increasing a brand’s value? Over the last year we’ve been refining what we believe to be the future of building a brand and a consumer relationship, and measuring the relevancy of The New General Market. OgilvyCULTURE’s five key strategic territories In order to develop our cross-cultural offering, we interviewed key clients and stakeholders in both the current general market and multicultural spaces and augmented those findings with desk research on the different ways brands are now targeting multicultural audiences. We found our research complicated by the shifting boundaries between the general and the multicultural markets. The clients we interviewed found it difficult to pinpoint a transition point between their efforts to serve the two audiences. We analyzed the ways in which more than 100 brands were marketed to Hispanic, Black, Asian American and LGBT audiences separately. We eventually identified certain patterns that we refined into five key strategies: Cultural Community™ Cultural Currency™ Cultural Authenticity™ Cultural Confluence™ The Cultural Loop™ While we sought to avoid oversimplifying more than 40 years of multicultural and general market executions, we needed a structured way of looking at how brands increase relevancy and equity measures over time. These five elements create that framework. Faced with today’s rapidly morphing landscape, in which brands are learning to engage socially and through new and emerging channels, we’re still working out how to deploy these tactics as part of a broad-based cross-cultural strategy funneled through various channels and touch points along the customer journey. 22
  • 25. The Cross-Cultural Strategic Territory Framework for Building Brand Relevancy and Equity • Heavy brand investment • rands with low relevancy and equity B measures within the segments Cultural Community • ong-term commitment and no “in and L Provides Value out” investments with the product or event to Customer by Enhancing • nce the brand is established, provides O Customer’s: high barriers to entry from the competition • elationship/ R Processing of Benefits • Low to medium brand investment • onfidence in C • rand with low relevancy and equity B the Purchase measures Decision • orrowing equity from an established B • roduct/Brand P Cultural brand/talent that has a relationship or Currency Satisfaction trust with the segments • rands receive immediate awareness B and consideration but do not establish high barriers to entry from the competition • Medium to high brand investment • sually unique and authentic value U The New proposition General • rand with high relevancy and low B Market Cultural equity or vice versa Strategic Provides Value to Authenticity Territories • equires deep levels of consumer R Firm by Enhancing: for Building commitment from heavy users of Brand Equity • fficiency and E the brand Effectiveness • sually results in attracting new users U of Marketing and loyal repeat purchasers Investment • Brand Affinity • Prices/Margins • eavy investment to build the brand H across all segments • Brand Association • sually the brand has high equity and U • Trade Leverage relevancy measures within one key segment • ompetitive C Cultural Advantage Confluence • he brand has a unique and ownable T value proposition • esults in significant trial and usage, R usually creating a larger loyal base of consumers • Medium to high brand investment • urpose-driven brand building for P The New General Market specific to the Hispanic, Black, Asian American The Cultural and LGBT segments Loop • uilds high brand relevancy and B equity measures • stablishes a deep relationship with E the segments and usually delivers brand loyalty 23
  • 26. cultural community ™ Participating in long-standing community-based cultural events and programs Within many ethnic segments, people often strongly identify with community-based events that celebrate a shared identity and carry cultural value down from generation to generation. Take, for example, Calle Ocho, a street party staged by Miami’s sizable Cuban American population; or the ESSENCE Music Festival, held annually in New Orleans and widely attended by Blacks. These “for the community, by the community” events have traditionally served to strengthen the fabric of cultural communities, bringing extended families and friends together around a common celebration to reinforce identity. For some brands, this is an opportunity to introduce the brand to the community. For others, it’s a means of reinforcing their long-standing support. Either way, the barriers to entry are usually low, opening the door to the longer process of embedding the brand in community culture. Caters well to : Brands with low relevancy and low equity measures. Risk/reward: Depending on a brand’s levels of engagement — from, say, a sponsorship on the one hand, to dedication of human resources and other forms of more tangible participation on the other — it runs an expected risk of low initial payoff. Buying sponsorship rights will not likely translate into deep affinity for the brand, at least in the short term. When brands invest time and resources, the benefits are often rewarding. The Cultural Community approach requires a long-term commitment; it’s the equivalent of the residents of a tight-knit ethnic segment inviting the brands into their homes and offering them the chance to prove they want a relationship. For those brands that invest in the Cultural Community approach over time, the rewards can be substantial. Demonstrating a commitment to a community’s shared culture signals that the brand cares and is here to stay. The community’s younger members grow up with the brand and see it as an ally — a friendly entity that’s investing in them personally. Long-term brand loyalty often emerges as older generations endorse the products and services they introduce to their progeny. 24
  • 27. Calle Ocho Calle Ocho started in 1978 as a way to showcase Cuban culture in Miami. Today over one million people come from all over the world to attend this street party, which is covered by press and major networks and sponsored by many top brands. Calle Ocho is renowned for its music, with top Hispanic acts performing during the weekend festival. ESSENCE Music Festival For three days hundreds of thousands gather for concerts and community-based events in New Orleans. The 2012 ESSENCE Music Festival, presented by Coca-Cola, drove more than 422,000 guests to the city. According to Michelle Ebanks, President of Essence Communications Inc., “The ESSENCE Music Festival is the ultimate destination for entertainment and inspiration as we gather together to celebrate culture and connect to our com- munity with some of the hottest names in music and entertainment.” Now in its 18th year, The ESSENCE Music Festival is the nation’s definitive African-American live music and cultural experience. 25
  • 28. cultural currency ™ A partnership with talent or a prominent figure within the community Sometimes, affinity by association helps. Prominent figures act not only as cultural icons, but also as cultural gatekeepers. Brands that build associations/partnerships with talent who’s built up cultural cachet and influence with a segment are borrowing cultural equity to better reach and connect with that segment of consumers. The most frequently used model is that of brands that engage talent (entertainment) that “identifies with” a particular segment and has special authority to speak on its behalf. Segments look to such brands for signals on what to trust (and brands to avoid) —  a quasi – litmus test of trust. Caters well to:  Brands with low relevancy and low/medium equity measures. Risk/reward: As with Cultural Community, the Cultural Currency approach can serve as a needed introduction between a brand and a community — a point of entry to establish an audience. Instead of a community-based event, the channel for a relationship is through brand asso- ciation via talent. Additionally, by borrowing cultural equity, brands may reap a particular seal of approval — the equivalent of a reference from a well-trusted source. But “quick entry” should not be conflated with “low risk.” Partnering through brand association always carries inherit risk. Through association, the brand’s equity relies, at least partially, on the equity of the talent. Should the talent lose his or her standing in the community, so too might the brand. Cîroc Vodka After Diageo partnered with Sean “Diddy” Combs, the brand grew 552% from 2007 to 2010, replacing Belvedere as the second-ranked vodka in the “ultra-premium” category. 26
  • 29. cultural authenticity™ Connecting with The New General Market based on insights driven inward (multicultural) to outward (general market), or vice versa Most often, brands are practiced at connecting to a “general market” audience — one with which they’re familiar — but face the challenge of building relevance with a specific multicultural audience. As opposed to making an introduction (say, through an event sponsorship), the Cultural Authenticity approach is a process of “getting to know you.” Brands develop authentic relationships through the process of uncovering and utilizing relevant cultural insights. The best examples come from brands that use an insight most relevant to a particular community. Distilling cultural insights requires heavy lifting by research, influencing everything from product/service development to communications. Ultimately, the approach calls for a high degree of insight and a dedication to reflecting that insight in the marketplace. Caters well to: Brands with high relevancy and low equity measures, or vice versa. Risk/reward: Using Cultural Authenticity requires deep levels of understanding and commitment. The best examples come from brands that, in their own way, create an organic bond with the community. This requires a heavy investment in research or innovation during the product development cycle, with the particular audience in mind. Sometimes brands simply get it right from the beginning due to a deep cultural understanding of the total market. But in general, Cultural Authenticity is not an easy tactic to execute because it requires a powerful cultural insight rolled out in a holistic manner. The brands, in effect, become natural extensions of the community. Brands that are successful at executing this strategy often enjoy a long and profitable tenure with high barriers to category entry. Honey Bunches of Oats 80% of Hispanics, regardless of fluency, want bilingual packaging. The Honey Bunches of Oats “Think Positive” campaign marks the first time the company has implemented a bilingual pack promotion. 27
  • 30. cultural confluence ™ Turning a segment’s cultural values into attributes relevant to what’s considered the general market When we reference Cultural Confluence, people sometimes think we’re suggesting meshing or “watering down” the brand, thereby costing the brand its authenticity. This is far from the truth. This cross-cultural approach is more accurately defined as taking a holistic approach to the total marketplace. Caters well to: Brands with medium to high relevancy and/or medium to high equity measures. Usually brands that are successful at this tactic have a high degree of initial trial and usage measures and get a high degree of repeat usage. Risk/reward: This tactic helps brands increase loyalty among a larger base of consumers and establish higher barriers to entry for competitors. We believe that as we continue to explore the impact of The New General Market, we will begin to see more Cultural Confluence. Red Rooster After a celebrated run as executive chef at Aquavit Restaurant, the Ethiopia- born Marcus Samuelsson has built Red Rooster, critically heralded and reflective of Harlem’s many cultures. The restaurant was named after the legendary Harlem speakeasy that was located at 138th Street and 7th Avenue, where neighborhood folk, jazz greats, authors, politicians and some of the most noteworthy figures of the 20th century    uch as Adam Clayton —s Powell Jr., Nat King Cole and James Baldwin    ould converge to enjoy drinks —w and music in an inviting atmosphere. Since opening, it has attracted a world of patrons. Red Rooster has hosted everyone from the president of the United States to Halle Berry. Red Rooster has embraced today’s Harlem with that same spirit of inclusiveness and community from its past and present. 28
  • 31. the cultural loop ™ Linking a brand with a social cause or purpose Purpose-driven brands — those brands that put their capabilities to use in service of a pressing social problem — are sometimes neglected within the context of multicultural marketing. And yet research definitively points toward the conclusion that multi- cultural segments respond to and support those brands that address relevant social issues — often more so than the general market. “Social issues” is a broad umbrella, from sustainability to health to education, and much in between. The Cultural Loop poses the question: What issues are most important to the community, and how can brands go beyond business as usual to address them? This approach, broadly speaking, is about responding to what matters by playing a con- structive role in cultural communities. Caters well to: Brands with high relevancy and equity measures. Risk/reward: Research suggests that affinity and loyalty increase for those brands that effectively go beyond business as usual. For cultural communities in particular, The Cultural Loop can work toward building trust, demonstrating the brand’s commitment to “what matters” and conviction to do what’s best for the audience it serves. However, good intentions are not enough. Social issues must be relevant both to the community and to a brand’s own capabilities. Putting resources behind a certain social issue that the brand has little license to address will likely hit a note of dissonance and risk inauthenticity. Black Girls Rock! b condoms Black Girls Rock! Inc. is a nonprofit youth empower- b condoms focuses on bettering sexual health ment and mentoring organization established to practices among four main target audiences: promote the arts for young women of color, as well Blacks, Hispanics, 50 and over, and gay and as to encourage dialogue and analysis of the ways bisexual males. b condoms reinvests a portion women of color are portrayed in the media. Black of its profits in organizations across the Girls Rock! offers unique programs that range from country that support sexually transmitted DJ academies to cuisine tasting. The organization disease education and prevention in the most has also established an awards show on BET, which affected areas. was extremely successful in its inaugural year. 29
  • 32. Releasing the value of a Cross-Cultural brand
  • 33. The term “cross-cultural marketing” dates back to the 1930s, but circumstances did not converge in a way that allowed the advertising industry to fully embrace the concept until now. Because of global and domestic demographic shifts, a cross-cultural approach is suddenly essential in terms of analyzing the changing consumer and gaining deeper insights into The New General Market. With current technology allowing us to better target within this evolving audience, we will be poised to meet the demand for effective advertising and produce a greater ROI. Below is a case study that demonstrates how we solved a client’s total market communica- tions and business opportunity. Case study: A total market strategy using the cross-cultural approach In 2008, a global retail brand that had matured in the United States encountered a down- turn when the economy went into a nosedive. The number of store visitors was declining, and growth through expansion was not an option. The challenges presented to OgilvyCULTURE were as follows: First, increase the number of visits by 2015. Second, demonstrate what OgilvyCULTURE means by a “total market” approach — and explain the benefits of such a strategy. And third, inform the regional and local markets. An investigation into the retailer’s current approach revealed some interesting facts. The first insight was that the retailer, seeking to find new customers, had only gone after Hispanics — but that segment comprised less than half (48%) of the total population of potential new customers. Another revelation was that something was being lost in transla- tion: The retailer’s positioning did not address each of the segments in a meaningful way. Further, we discovered that there was no consistent strategy that linked the national market to regional and local markets. Given the opportunity, OgilvyCULTURE responded with a four-pronged approach. Initially, we sized and segmented the opportunity. Then we performed a qualitative assess- ment and a quantitative assessment designed to show that we were correct in our hypothesis about where the retailer’s efforts were falling short. Once our theory was validated, we developed a cross-cultural strategy and followed that up by designing a cross-cultural experience plan. The outcome? The retailer was able to understand the total market opportunity and the need to prioritize all segments. Rather than create a one-size-fits-all multicultural strategy that was in fact geared only toward Hispanics, it executed a communications strategy that included Blacks, Asian Americans and the LGBT community in addition to the general market and Hispanics. The retailer also launched an integrated experience strategy that was consistent across the national and regional/local markets. Finally, we put in place a measure- ment and effectiveness plan to track results. 31
  • 34. The Ogilvy Mather Cross-Cultural Matrix Is there an enormous untapped value in this approach? We are just beginning to tap the surface. Usually the last question we get from clients after discussing the strategic territories is “Where is my brand with regard to the relevancy or equity measures within The New General Market?” Our view is we must understand where the brand is with regard to cross-cultural equity measures. Over the past year, we’ve measured relevancy through qualitative and quantitative tools, stakeholder interviews and client sources. After assessing the brand, we plot where it falls within the Ogilvy Mather Cross-Cultural Matrix (see below). Relevancy Growing Strong Cross-Cultural Cross-Cultural Equity Equity Category Index (Small, Strong Brands) (Large, Strong Brands) Little Declining Cross-Cultural Cross-Cultural Equity Equity (Small, Weak (Large, Weak Brands) or New Brands) By plotting the brand’s current position within the Cross-Cultural Matrix, we are able to understand how the brand is positioned within The New General Market and begin to formulate a hypothesis as to how to increase the brand’s value with The New General Market. We develop a strategy to build the brand’s relevancy and equity measures with The New General Market, based on the brand’s position within the Cross-Cultural Matrix. 32
  • 35. The Ogilvy Mather Cross-Cultural Matrix Relevancy Cultural Cultural Currency Confluence Category Index The Cultural Loop Cultural Cultural Community Authenticity As presented earlier in this report, these are our proprietary strategic territories. Using this methodology and approach helps us understand what a brand needs to work on to strengthen its positioning and how to increase the value of the brand over time with The New General Market. The insights we gain allow us to evaluate various tactics based on the brand’s cross-cultural assessment. What’s next? In the fall of 2012, through a joint WPP partnership using BrandZ™, Ogilvy Mather, Millward Brown and Firefly Millward Brown will release the marketing and advertising industry’s first Cross-Cultural Index. It is a proprietary approach we’ve developed to measure how cross-cultural a brand is based on an assessment. This approach will allow us to reassess a brand’s market value and other brand metrics for the “Total Market” within BrandZ™.   The beta version of the Cross-Cultural Index will rank and score a brand’s equity within The New General Market. It is our belief that once this tool is released and refined, we truly will have a “Total Market” view of a brand’s value in the marketplace. Companies will have a better understanding of how to elevate their brand’s value using our cross-cultural strategies and how to invest their assets in The New General Market. In the end we will have a way to measure the Total Market for effective and inspiring communications for all. The marketplace continues to evolve. With this report, we have established a framework for addressing The New General Market needs for current and future brands that engage with our services in this fast-changing world. We believe there is a need to change our current methodology in order to produce deeper consumer insights, better targeting and more effective communications. If you have any questions or comments, please do not hesitate to contact Jeffrey Bowman at jeffrey.bowman@ogilvy.com. 33
  • 37. Jeffrey Bowman Cross-Cultural Practice Lead Jeffrey leads the North American Cross-Cultural Practice at Ogilvy Mather, one of the largest advertising and communications agencies in the world. Ogilvy Mather’s cross- cultural approach is viewed as an industry breakthrough because of the Inside-Outside strategy, “The New General Market” approach, partnerships and client service model. Since its launch in 2011, the Cross-Cultural Practice has nabbed eight global brands looking to target The New General Market. Jeffrey has partnered with John Seifert, Chairman and CEO of Ogilvy Mather North America, and Donna Pedro, Chief Diversity Officer of Ogilvy Mather North America, to create a new communications model that serves as a bridge between the general market and multicultural marketing communications models: a “Total Market” communications model. This model has been celebrated in The New York Times, Advertising Age, The Economist and other industry publications as well as at conferences. Ogilvy Mather’s depth and diversity of talent allowed Jeffrey to bring his experience to a space thirsty for innovation. Jeffrey has more than 15 years of experience in marketing strategy, brand management, experience planning, digital strategy, channel strategy and marketing effectiveness with global brands within the beverage, consumer packaged goods, retail and technology industries. Still in its infancy, OgilvyCULTURE is recognized as a very promising practice for the agency. When Jeffrey is not working, he enjoys spending time with his wife and two daughters in New York City. Jeffrey holds an MBA in Marketing from Clark Atlanta University and a BS in Marketing from South Carolina State University. Contact us: contact.ogilvyculture@ogilvy.com Follow us: @ogilvyculture Learn more: ogilvyculture.com Facebook: facebook.com/ogilvyculture 35
  • 39. Chart/Visual Page Source 1980 vs. 2010 Population Growth Rates 8 1990 via World Databank, 2010 via CIA World Factbook Survey Data 9 OgilvyCULTURE LinkedIn Survey Multicultural Spending and Shift to 9 The Nielsen Company Emphasize Hispanic Advertising Black Media Spend 10 Nielsen Report Media Spend 2009 Global Population by Age 10 US Census Bureau International Database Race and Ethnicity Chart 11 Ad Age, “2010 America: What the 2010 Census Means for Marketing and Advertising,” by Peter Francese TNGM by Region, 1980 – 2010 12 US Census Bureau TNGM by State, Top 10 Populated, 12 US Census Bureau 1980 – 2010 TNGM by City, Top 25 Populated, 13 US Census Bureau 1980 – 2010 Multicultural Buying Power 13 Selig Center for Economic Growth, Terry College of Business, University of Georgia, US Average Annual Expenditure Household Expenditure Spending: 14 US Department of Labor, Bureau of Labor Hispanic, Black and Asian American Statistics, Consumer Expenditure Survey 2010 Census Tract Heat Map, 14 Data from US Census Bureau, Map via % Hispanic SocialExplorer 2010 Census Tract Heat Map, 14 Data from US Census Bureau, Map via % Non-Hispanic, Black SocialExplorer 2010 Census Tract Heat Map, 15 Data from US Census Bureau, Map via % Non-Hispanic, Asian American SocialExplorer Top 10 DMAs and % TNGM in City 15 The Nielsen Company Local Television Market Estimates; US Census Bureau Technology Usage 16 Mintel, Pew Research Center, eMarketer, IDC, US Census: Aside from Total Market, email assumptions are based on Census data and technology adoption rate 37
  • 40. © Ogilvy Mather, 2012 38