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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 & Mathers 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 youve paid even the slightest attention to popular culture in the last couple of years,
youre 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. Theres 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 marketsBrazil, Russia, India, Chinamany 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 were equally excited about business right here at home. Ogilvy & Mather sees
a tremendous domestic opportunityone that doesnt 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 marketand that present compelling new
possibilities for growth. We call this new mass market The New General Market (TNGM).

Weve 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 conductedand that model is dangerously antiquated.
The good news is that were 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 founders 101st
birthday, we believe its important to reengage with some of David Ogilvys 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. Its 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.

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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 & Mathers Professional NetworksAdministrative Professional Network,


Black Diaspora, LatinRED, Ogilvy Pride, RedLotus, Womens 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

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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 moresthe rampant daytime drinking and womanizing, the blue haze of cigarette
smoke drifting through the officethe 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.

Whats so different, and is this a problem?


Well 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: The population was divided into five ethnic segments
White, Black, American Indian/Aleut Eskimo, Asian
White83.1% American or Pacific Islander, and other racesuntil
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 Americas 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

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increasingly obsolete. If you listen in on the whispered conversations in client meeting
rooms and agency huddles, youll 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 neitherprimarily 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 isnt 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%

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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, its 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 withand obvious shortcomings ofthe GMA and MCA model,
its 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

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is forcing change in the advertising world, whether were ready for it or not. We are in the
midst of one of the largest shifts in population and purchasing behavior in our nations
history. Its 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 weve
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%

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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 Markets prevalence in Americas 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 citys total population. The New General
Market accounts for more than 60% of the population in five of these cities, and in
threeHouston, San Antonio and Dallasit comprises 70% or more of the residents.

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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

Were not necessarily surprised by these massive demographic changesbut we are


somewhat taken aback by the speed with which they have occurred, given that most
predictions estimated they wouldnt 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 19902015 (in billions of dollars)


1,600

1,400

1,200

1,000
Hispanic
800 Black
Asian American
600 Multiracial

400

200

1990 2000 2010 Projected

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Looking closer, we are faced with an even more surprising realization. On a per-household
basis, The New General Market outspent whats considered to be the general market today
in most categories. While this makes sense once you think about itall of the so-called
minorities combined now add up to a majoritythe 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. Todays 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

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Asian American Population Density 2010

Media and The New General Market


Americas 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 nations 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
Bostonis at 49%. Its 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 industrys 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 elsethe impact of these
new demographics on technology, particularly on mobile and social media.

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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 technologyone 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, MarchApril 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.

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But television remains the king of all media, whether its 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. Thats 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.

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Ogilvy & Mathers new
approach: CrossCultural
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 its 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 agenciesboth 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

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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 todays 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 plansall for a single brand problem.

CONSUMER CONSUMER
INSIGHT INSIGHT
GENERAL
MARKET HISPANICS

BLACKS
LGBTs
ASIAN
CONSUMER
INSIGHT AMERICANS
CONSUMER
INSIGHT

CONSUMER
INSIGHT

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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.

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How does the
Cross-Cultural model
increase the value of
my brand?
Taking a page out of David A. Aakers book published in 1991, Managing Brand Equity,
weve 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 brands value?

Over the last year weve 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.

OgilvyCULTUREs 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
todays rapidly morphing landscape, in which brands are learning to engage socially and
through new and emerging channels, were 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.

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

Heavy brand investment


Brands with low relevancy and equity
measures within the segments
Cultural
Community Long-term commitment and no in and Provides Value
out investments with the product or event to Customer
by Enhancing
Once the brand is established, provides Customers:
high barriers to entry from the competition
Relationship/
Processing of
Benefits
Low to medium brand investment
Confidence in
Brand with low relevancy and equity the Purchase
measures Decision
Borrowing equity from an established Product/Brand
Cultural brand/talent that has a relationship or
Currency Satisfaction
trust with the segments
Brands receive immediate awareness
and consideration but do not establish
high barriers to entry from the
competition

Medium to high brand investment


Usually unique and authentic value
The New proposition
General
Brand with high relevancy and low
Market
Cultural equity or vice versa
Strategic Provides Value to
Authenticity
Territories Requires deep levels of consumer Firm by Enhancing:
for Building commitment from heavy users of
Brand Equity Efficiency and
the brand
Effectiveness
Usually results in attracting new users of Marketing
and loyal repeat purchasers Investment
Brand Affinity
Prices/Margins
Heavy investment to build the brand
across all segments Brand Association
Usually the brand has high equity and Trade Leverage
relevancy measures within one key
segment Competitive
Cultural Advantage
Confluence The brand has a unique and ownable
value proposition
Results in significant trial and usage,
usually creating a larger loyal base of
consumers

Medium to high brand investment


Purpose-driven brand building for
The New General Market specific
to the Hispanic, Black, Asian American
The Cultural and LGBT segments
Loop Builds high brand relevancy and
equity measures
Establishes a deep relationship with
the segments and usually delivers
brand loyalty

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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 Miamis 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, its 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 brands levels of engagementfrom, say, a sponsorship on the one hand,
to dedication of human resources and other forms of more tangible participation on the
otherit 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; its 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 communitys shared culture signals
that the brand cares and is here to stay. The communitys younger members grow up
with the brand and see it as an allya friendly entity thats investing in them personally.
Long-term brand loyalty often emerges as older generations endorse the products and
services they introduce to their progeny.

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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
nations definitive African-American live
music and cultural experience.

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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
whos 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 quasilitmus 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 communitya 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 approvalthe 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 brands 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.

Croc 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.

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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 audienceone
with which theyre familiarbut 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 segments cultural values into attributes relevant to whats considered the general market
When we reference Cultural Confluence, people sometimes think were 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 Harlems 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 centurysuch as Adam Clayton
Powell Jr., Nat King Cole and James
Baldwinwould converge to enjoy drinks
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
todays Harlem with that same spirit of
inclusiveness and community from its
past and present.

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the cultural loop
Linking a brand with a social cause or purpose
Purpose-driven brandsthose brands that put their capabilities to use in service of
a pressing social problemare 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
issuesoften 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 brands commitment to what matters
and conviction to do whats best for the audience it serves.

However, good intentions are not enough. Social issues must be relevant both to the
community and to a brands 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.

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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 clients 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
approachand explain the benefits of such a strategy. And third, inform the regional and
local markets.

An investigation into the retailers current approach revealed some interesting facts.
The first insight was that the retailer, seeking to find new customers, had only gone after
Hispanicsbut 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 retailers 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 retailers 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.

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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, weve 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 brands 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 brands value with The New
General Market.

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

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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 brands cross-cultural assessment.

Whats 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
industrys first Cross-Cultural Index. It is a proprietary approach weve developed to
measure how cross-cultural a brand is based on an assessment. This approach will allow
us to reassess a brands 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 brands 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 brands value in the marketplace. Companies will
have a better understanding of how to elevate their brands 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 & Mathers 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 & Mathers 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, 19802010 12 US Census Bureau

TNGM by State, Top 10 Populated, 12 US Census Bureau


19802010

TNGM by City, Top 25 Populated, 13 US Census Bureau


19802010

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

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Ogilvy & Mather, 2012

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