African Americans, Brand Affinity, And The Perils Of Ignoring $1 Trillion Spending Power
Artists like Jay-Z can impact a car company's fortunes
[Pardon My Rant]
NewsMedicaMetrics, a strategic marketing optimization company, released a study on August 5th showing the most popular brands amongst African Americans using a metric called an Emotional Attachment score.
African Americans are a powerful force in this country. Black Star News has published several online articles referencing the 2011 Nielsen report estimating the African American buying power to reach $1.1 Trillion by 2015.
For perspective, that would represent the 15th largest GDP of any country in the world placing African Americans in a tie with South Korea and ahead of countries like The Netherlands ($836B), Turkey ($774B), and Switzerland ($660B).
As the old adage from Voltaire says, “A great power imposes great responsibility”. In 2014, African Americans chose the following brands with their power: iPhone, Lexus, Nike, MAC Cosmetics, Visa, Disney Parks, and Carol's Daughter.
Many of these brands like Apple’s iPhone cut across multiple races, ages, and genders. Some brands like Carol’s Daughter followed the old “For Us/By Us” (FUBU) model evolving from a simple kitchen of an African American woman, to the set of The Cosby Show; from a mail order business from her apartment into two stores in Brooklyn and Harlem.
Then finally from expanding with the support of African American investors like Jada Pickett, Will Smith, and Mary J. Blige to reaching Oprah’s couch in 2002. Lastly, there are other brands like Lexus that enter the market strategically with a game plan and a goal.
Lexus was keenly aware of the long standing love fest between African Americans and Cadillac automobiles dating back to the early 1930’s drew upon those experiences to launch into this market. As the story goes, Cadillac refused sales to African Americans during the Great Depression as a marketing ploy to increase the brand’s allure and prestige.
However, the most affluent African Americans of the day --Boxers, Singers, and Doctors-- merely paid Caucasians to purchase Cadillac cars on their behalf. Nick Dreystadt, an executive of the company at the time, convinced the Board of Directors to tap into this African American market. Sales rose 70% and soon after, Dreystadt became the head of the Cadillac division in 1943.
The outcome of this strategic move permeated through African American culture seeping into its literature.
Mildred D. Taylor, a Newbery Award-winning author, wrote The Golden Cadillac in 1987. It was one of many stories about this prestigious car. It focused on ‘Lois and Wilma’s dad who buys a brand new 1950 gold Cadillac and takes his family on a road trip from Ohio to Mississippi. As they travel deeper into the rural south, they face stronger and stronger discrimination until finally the father says “[I’m] heading back to Memphis. Cousin Halton’s there. We’ll leave the Cadillac and get his car. Driving this car any farther south with [Mom] and the girls in the car, [is] just not worth the risk.”
It should be mentioned that enjoying what society has branded a “forbidden fruit” has always been a cultural phenomenon for Black cultures. Haitians eat Soup Joumou every New Year’s Day to signify their country’s independence in 1804. The soup is symbolic of their independence from French colonists that did not allow Haitians to partake of the meal while they were held in captivity.
So, let's fast forward to the early 1990’s, when the U.S. was facing yet another economic crisis. Cadillac captured the hearts and minds of African Americans yet again with the Escalade. It was a time when the SUV in general was gaining prominence. Cadiallac was able to corner the African American market yet again. This oversized gas-guzzling vehicle was revered by the Hiphop community at the time, which led to brand awareness and stature for the entire African American community. In fact, a J.D. Power survey showed than Cadillac captured 1 out of every 3 African American luxury car purchases.
So after so many years of success, how did Cadillac fall from grace?
Cadillac, and at a grander scale, General Motors deviated from their successful strategy after yet another economic downturn in 2008. Rather than sticking to the script, Cadillac and the General Motors leadership decided to veer away from the African American buying power coming out of this recession. They decided against marketing cars with a focus on the upper echelons of the African American social elite.
You see, General Motors, had been bailed out by the Federal government, which ushered in a new era of executive leadership and strategy. One of those new executives was Joel Ewanick, the Chief Marketing Officer.
He came in one year after General Motors discontinued its relationship with Sanders/Wingo and Carol H. Williams, the only two African-American owned advertising agencies contracted with the company.
However, despite his time at Hyundai that saw 3-times growth in sales largely due to purchases from African American buyers, he failed to bring those strategies over to General Motors, and most importantly, the Cadillac brand. His bigger focus was on a European market.
He is reported to have spent $560 million or 12% of his advertising budget on a Manchester United campaign aggressively entering the market of those with an affinity to soccer. This later became his downfall when General Motors ousted him saying he misrepresented the advertisement deal to the board.
Another blow to Cadillac was losing Don Butler, Vice President of Global Cadillac Strategic Development. Butler, an African American, was paramount to bringing back Carol H. Williams agency to try to stop the dropping numbers of African American buyers. But in what appears to be too little, too late, Butler himself announced unexpectedly his retirement from General Motors on August 5, 2013.
So how did Lexus have such a meteoric rise during the Cadillac downfall?
Eight years ago, Lexus did not even appear in a single category for top African American automobile purchases while Cadillac led with two cars in the Luxury SUVs catalog. Well, Lexus did everything Cadillac used to do.
In 2007, Lexus hired WaltonIssacson, an independent, minority-owned, full service brand-building agency. With an impressive track record, the agency quickly went to work improving the Lexus image among African Americans. Here is a list of some of their campaign highlights:
In 2009, in advance of the Grammy Awards, Lexus partnered with R&B singer, Keri Hilson, to launch “Listening Lounges” with affluent African American women to help build the brand.
In 2010, Lexus did a co-branding campaign with Black Entertainment Television (BET) and R&B singers, Alicia Keys and Ryan Leslie. These events built a database for marketing.
In 2011, Lexus partnered strategically with Essence magazine and other niche blogging websites and Black associations expanding the brand’s reach. Lastly, while General Motors and Cadillac publically abandoned Facebook advertisement right before Zuckerberg’ s IPO announcement in 2012 Lexus forged relationships with both Facebook and Twitter jumping in with both feet designing interactive games. Social media has been a proven fora that have disproportionally higher rates of African American traffic than other traditional marketing avenues.
What’s the residual effect of all Lexus’ efforts? Lexus leads the list of car companies with a high Emotional Attachment score among African Americans.
Additionally, rappers are not talking about Escalades in their songs and rolling up to star studded events in Cadillacs with tinted windows. Rather, Jay-Z’s hit record, “99 Problems” from The Black Album released in 2004 and dubbed #2 on Rolling Stone’s top 100 songs of ‘00s depicted himself being racial-profiled while riding around in a GS300.
Not exactly a Mildred D. Taylor book on a car that led to racial profiling, but the closest thing too it in our modern day era of music and media.
Fast forward to 2009 where Jay-Z’s album The Blueprint 3 features the critically acclaimed single “Empire State of Mind”. There the artist gives the “pseudo” head nod to Lexus rapping, “Cruising down 8th street. Off-white Lexus. Driving so slow but BK is from Texas” acknowledging the hometown of his spouse, Beyonce Knowles.
The song has since sold over 5 million copies peaking at number one on the Billboard Hot 100 list for five consecutive weeks.
Errol Pierre is a writer, political junkie, and social commentator with a passion for Healthcare Policy. He can be reached at www.errolpierre.com