The Black Informant | African American Commentary, News and Community Building

” “Why should companies feel compelled to pump more money into Black ad shops when we, ABOVE ALL OTHER ETHNIC GROUPS tend to watch commercials as well as outspend other races when it comes to depreciatable products?”

We had this discussion once before. Apparently, you still haven’t learned a thing. According to The Bureau of Labor Statistics, Af-Am households actually spend less as a percentage of per capita income and in overall dollars on consumer goods than all other groups measured. As I’ve written previously, the Af-Am market is clearly underdeveloped.

The other lesson to be learned from this information is exposure does not always result in action. I won’t debate whether Af-Ams consume more media than other groups — especially TV and radio. For whatever reason, they’re not reacting, proportionally, to the advertising that’s presented. That’s the fact.

Fyi:

Anytime you include a link in a comment, wordpress will automatically throw it into “moderate”. This gives me better control over spam.

Now, as to your comment.

There was nothing to learn in what you presented in past and in this latest especially when you ignore studies like the one conducted by the U. GA that found:

The Selig Center has reported that Black buying power will increase by 203 percent, from $318 billion in 1990 to$723 billion in 2004, to $965 billion in 2009. “This overall percentage gain outstrips the 140 percent increase in White buying power and the 150 percent increase in total buying power (all races combined),” the report explains. In effect, the report projects that by the year 2009, African Americans will account for almost nine cents out of every dollar that is spent in this country.

Target Marketing News also found that…

Target Market News, a research company that tracks the spending habits of African Americans, we outspend our White counterparts when it comes to video games, televisions, CD players, cable TV services and sound equipment.

Now, is there more that could be done marketing-wise within the AA community? Sure. But again, just based on the simple fact that we consume more media than any other group (I would think that the Japanese were right up there), Black ad shops cannot make the claim that the Black consumer is “being left out in the cold” economically when it comes to this issue. We have been practically giving away our money to companies that do not cater their marketing for Black audiences and that is something Black advertising shops have to deal with more so than trying to find the racist in the boardroom who does not see a strong incentive to pour more money into Black advertising shops.

Again I ask the question: “Do Black consumers really care who is doing the advertising?” This is the question that Black ad shops are afraid to ask.

##Updated

I was in a bit of a rush with the above comment. Here is the rest I wanted to add:

Here is another study done by a AA market research company:

Tara Smith, president of T.M. Smith & Associates, a Cincinnati African American market research and consulting firm, agrees. She said that despite the economy and decline in advertising spending since 2001, the one thing that has remained steady is advertising to “urban” markets. Ms Smith stated that studies have shown African American teenagers spend 6% more per month, or $5136 per year, than the average U.S. teen. “Our teens are more likely to buy high-end clothing, jewelry, and athletic footwear, which makes up the extra 6%, whereas if they shopped at discount stores, their spending would equal the national average.” African American teens are trendsetters, and the unfortunate side of trends is that because they are typically short-term and name-brand driven, prices tend to be higher, she said. African American teenagers are a hot target market because 1) they have disposable income, and 2) they have major influence in mainstream markets, particularly in the music, sports and fashion markets. Ms. Smith stated that the reason trends for African American teenagers are so short-lived is because, once the trend has crossed-over to the mainstream, African American teens no longer find the trend to be “hip.” (source)

I would challenge the word “disposable” here for the same reason why I would challenge your mentioning of Black per-capita findings. Why I do not doubt that we spend less than Whites per-capita, what the findings do not cover is the debt-to-income ratio for the Black community. In other words, it is wrong to assume that just because we spend less than Whites per-capita it does not mean that there is some untapped surplus of money within the Black community You have to match the info you provided in your link with reports like this that addresses our debt in order to get a more complete picture.

#

I was in a bit of a hurry in my last comment. Here is something else I wanted to add:

Here is another study done by a AA market research company:

Tara Smith, president of T.M. Smith & Associates, a Cincinnati African American market research and consulting firm, agrees. She said that despite the economy and decline in advertising spending since 2001, the one thing that has remained steady is advertising to “urban” markets. Ms Smith stated that studies have shown African American teenagers spend 6% more per month, or $5136 per year, than the average U.S. teen. “Our teens are more likely to buy high-end clothing, jewelry, and athletic footwear, which makes up the extra 6%, whereas if they shopped at discount stores, their spending would equal the national average.” African American teens are trendsetters, and the unfortunate side of trends is that because they are typically short-term and name-brand driven, prices tend to be higher, she said. African American teenagers are a hot target market because 1) they have disposable income, and 2) they have major influence in mainstream markets, particularly in the music, sports and fashion markets. Ms. Smith stated that the reason trends for African American teenagers are so short-lived is because, once the trend has crossed-over to the mainstream, African American teens no longer find the trend to be “hip.” (source)

I would challenge the word “disposable” here for the same reason why I would challenge your mentioning of Black per-capita findings. Why I do not doubt that we spend less than Whites per-capita, what the findings do not cover is the debt-to-income ratio for the Black community. In other words, it is wrong to assume that just because we spend less than Whites per-capita it does not mean that there is some untapped surplus of money within the Black community You have to match the info you provided in your link with reports like this that addresses our debt in order to get a more complete picture.

#

I was in a bit of a hurry in my last comment. Here is something else I wanted to add:

Here is another study done by a AA market research company:

Tara Smith, president of T.M. Smith & Associates, a Cincinnati African American market research and consulting firm, agrees. She said that despite the economy and decline in advertising spending since 2001, the one thing that has remained steady is advertising to “urban” markets. Ms Smith stated that studies have shown African American teenagers spend 6% more per month, or $5136 per year, than the average U.S. teen. “Our teens are more likely to buy high-end clothing, jewelry, and athletic footwear, which makes up the extra 6%, whereas if they shopped at discount stores, their spending would equal the national average.” African American teens are trendsetters, and the unfortunate side of trends is that because they are typically short-term and name-brand driven, prices tend to be higher, she said. African American teenagers are a hot target market because 1) they have disposable income, and 2) they have major influence in mainstream markets, particularly in the music, sports and fashion markets. Ms. Smith stated that the reason trends for African American teenagers are so short-lived is because, once the trend has crossed-over to the mainstream, African American teens no longer find the trend to be “hip.” (source)

I would challenge the word “disposable” here for the same reason why I would challenge your mentioning of Black per-capita findings. Why I do not doubt that we spend less than Whites per-capita, what the findings do not cover is the debt-to-income ratio for the Black community. In other words, it is wrong to assume that just because we spend less than Whites per-capita it does not mean that there is some untapped surplus of money within the Black community You have to match the info you provided in your link with reports like this that addresses our debt in order to get a more complete picture.

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My apologies for the duplicate posts. I did not see the message that the post was subject to moderation.

“There was nothing to learn in what you presented in past and in this latest especially when you ignore studies like the one conducted by the U. GA…”

Au contraire! The BLS’ numbers were not projections of growth rates in consumer spending like the Univ. of Georgia’s study, but actual expenditures that plainly refute the assertion Af-Ams spend more than other groups on “depreciable products”. For example, Af-Am households spend less in cumulative dollars on automobiles and furniture (both depreciable assets) by a considerable margin than Whites, Asians, and Latinos. The trend is largely the same for consumer goods in general, whether we’re discussing food/groceries, bank/financial services, entertainment (?!?), health care, housing (owning or renting), and so forth. Now, a partial explanation for these numbers is Af-Am households have significantly less income to spend on consumer items. But the amounts of total dollars spent don’t tell the entire story.

Af-Ams don’t make consumer expenditures in proportion to our representative numbers, generally speaking. At approximately 14% of the U.S. population, we account for less than 6% of the country’s annual economy. Even if we were to apply the Univ. of Georgia’s projections as fact and hold the nation’s annual economic production constant at today’s level (~ $11 trillion), Af-Ams would still count for less than 9% of consumer spending. In considering all the consumer statistics in combination, the Af-Am market qualifies as both underdeveloped and underserved.

The statistics also bear out what I’ve maintained; consumption of mass media advertising does not directly translate into consumer action, especially among Af-Ams. Rather than parse out those exceptions to consumer behavior as the rule (e.g.; Af-Am teens’ purchase of athletic footwear), your time would be better spent examining solutions that foster Af-Am economic parity. Such solutions would include corporate America increasing their business with Black-owned & operated ad agencies and media outlets.