Personalized Ads Draw Multicultural Consumers

  By Adriana Waterston, Horowitz Research

Once upon a time, TV was the undeniable gold standard for advertisers. No other medium could deliver TV’s reach, effectiveness or creative possibilities. Today, the plethora of media, channels and devices consumers use pose a challenge for advertisers and media planners. Which of these platforms deliver the greatest reach? Which ad formats are most effective? How can brands engage consumers with relevant messaging and creative?

The industry continues to struggle with measurement in today’s environment. Relying solely on exposure fails to account for the fact that often, consumers’ attention is divided among multiple screens and media at one time. Eight in 10 TV viewers (80%) say they multitask on another device at least some of the time while watching TV — and more than half (54%) do it a lot or all the time. With the majority of audiences using multiple platforms simultaneously, mere exposure to an ad is unlikely to move the needle forward for advertisers.

What’s more, consumers have more choices than ever about what they pay attention to and what they do not. So, while the ad might have reached the intended target, was it able to cut through the clutter and deliver the brand message effectively?

At Horowitz, we have long advocated that multicultural America is America, and that for brands to succeed in this fragmented environment, they must recognize that brand growth will largely be driven by America’s growing multicultural communities. In our latest study, State of Consumer Engagement — and its multicultural-focused reports, FOCUS Latino: Consumer Engagement, FOCUS Black: Consumer Engagement and FOCUS Asian: Consumer Engagement, we explore how new technologies, mediums and strategies can be leveraged to improve advertising, messaging and creative to reach, resonate with and engage multicultural consumers.

Which platforms deliver advertising most effectively, according to consumers?

Despite concerns about consumers skipping ads on TV, consumers report that across all the platforms they use, TV remains the platform on which they see the most ads. This, however, varies dramatically by age. Among 50-plus consumers, 61% say they see the most ads on live TV, and just about half (49%) of 35-49 year-olds say they see the most ads on live TV. Among 18-34 year-olds, though, just 33% say they feel live TV is one of the platforms they notice ads on the most. Instead, social media is the platform that 18-to-34 year-olds are most likely to say they see ads on, with 42% saying that social is the platform they notice the most ads on. Forty-one percent of 35-49 year-olds saying they see the most ads in their social media feeds, while 50-plus audiences are less likely to say social media (24%).

Another platform where there is a difference by age is online video: a quarter (24%) of 18-34 year-old and 35-49 year-old consumers say they notice ads on online video, compared to just 9% of 50-plus consumers.

Although the platforms where ads are noticed are similar by race, young multicultural consumers, like total market young consumers, are more likely to say they notice ads on social media than live TV. Moreover, multicultural consumers are heavier users of YouTube and Hispanic and Black consumers are more likely to say they notice ads in online video.

Personalization Means Speaking With, Not to, Today’s Consumers

Today, effective communication is all about personalized messaging. The one-way “broadcast” nature of traditional media platforms required messaging and creative that resonated with as wide an audience as possible. Personalization, on the other hand, presumes and requires a much more intimate conversation between brands and the consumers they hope to reach.

Thanks to consumers’ exposure to the addressable, data-driven capabilities of digital media, audiences are already coming to expect advertising personalized to their own specific interests and needs. This is especially true for younger audiences and multicultural audiences.

More than four in 10 (44%) consumers feel that seeing personalized ads during a TV show that they’re watching is appealing. This rises to 60% among Hispanics, 49% among African-Americans and 52% among Asian-Americans.

Hashtag campaigns, like Coca-Cola’s #ShareACoke, REI’s #OptOutside or Always’ #LikeAGirl, give consumers an opportunity to be a part of the conversation, not just be on the receiving end of a brand’s message. Multicultural consumers, who have traditionally been left out of many important conversations, are especially likely to want to participate. More than half (52%) of Hispanic consumers and four in 10 African-American and Asian-Americans consumers say that hashtag campaigns appeal to them. With higher levels of social media usage, multicultural consumers also have the power to amplify messages through social.

The appeal of personalization and engagement to multicultural consumers speaks to the desire to be recognized by the brands they embrace. More than half of Hispanic, African-American and Asian-American consumers say ads featuring people who look like them appeal to them. It’s not just about seeing themselves represented: Multicultural consumers are more likely to find it appealing when brands show a good amount of diversity overall in their advertising. When asked about the appeal of ads featuring people from different cultures, races, ethnicities, sexuality and family lifestyles, 63% of Hispanic consumers say that is appealing, as do 58% of Black consumers and 60% of Asian consumers.

Brand communication is about transparency as much as it is about positioning. Today’s consumers are less interested in transactional relationships and more interested in building meaningful relationships with brands with which they are aligned socially, culturally, and politically, and this is especially true among multicultural consumers. In a time where socio-political issues have brought to light deep divides, multicultural consumers want to — when they can — support and stand behind companies that support them. One-third (34%) of white consumers say that it would have a big positive impact on their likelihood to buy products from a company or brand (assuming they were in the market for the product) if the company’s values were aligned with theirs. In comparison, 41% of Hispanics, 43% of African-Americans and 45% of Asian-Americans say that alignment with company values would have a big positive impact on their likelihood to buy from that brand. In our polarized sociopolitical environment, understanding the issues that your audiences care about, and their points of view on those issues, is critical.

What’s Next for TV Advertising?

For young, multicultural audiences, innovation around TV advertising is imperative. With addressable advertising on digital TV and customized advertising in streamed video, the technology exists right now to deliver personalized TV advertising experiences that feel curated to the consumer. If hyper-targeted, personalized messages are what will work for consumers in today’s environment, it is more important than ever for brands to focus on really engaging with many smaller, niche audiences rather than chase the ephemeral dream of maximizing reach and exposure through generic messaging to the masses. As addressable technology improves and offers more opportunity for hypertargeting, there is, from a creative perspective, an untapped opportunity to reimagine TV as an advertising medium. By taking better advantage of new technology, big data, and consumer insights, TV can once again be the gold standard for delivering advertising that not only reaches its target audience, but resonates with those consumers in creative and highly relevant ways.

Adriana Waterston is senior VP, insights & strategy, at Horowitz Research.