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Tapping Growth in African American Buying Power Made Easier

market segmentation strategy

by Kenneth Rudich

In February of this year we published a post titled “Insights for Tapping Growth in African American Buying Power.”  In it, we shared that a 2011 report issued by the Nielsen Company estimated AA buying power will be nearly $1 trillion annually and is projected to reach $1.1 trillion by 2015.

Numbers like these seldom escape the attention of the business-minded and this one’s no exception.  What makes this one look even better now, however, is some recently unveiled news that suggests tapping into it may be on the brink of getting just a little easier.  

Targeted TV Invites Target Marketing

It could turn out to be a clarion call for marketers.

According to a Variety article, “For TV, black is the new green,” the black TV universe is in process of growing appreciably larger with the addition of four new African-American-focused networks.  They are Aspire, Revolt, Bounce TV and Soul of the South

Along with BET and TV One, these new networks hold out the hope of making the black marketplace much more accessible, especially for those who want to precisely tailor their message to embrace the distinguishing characteristics of it (again, read “Insights for Tapping Growth in African American Buying Power”).

For the sake of understanding the size of this marketplace, the African American population is currently 42 million strong and still growing — albeit slowly.

David Siegel, vice chairman of GMC (formerly the Gospel Music Channel, and a minority partner in the Aspire venture), asserts the black audience has historically been underserved, given its viewing habits.

“African Americans spend more time watching television than any other group,” he said.  “I think that part of (the reason these audiences were underserved) is that networks and producers felt that African-Americans were happy or satisfied with general-market television and didn’t feel that their interests and tastes included any special needs, which I think to a large degree was not correct” (again we encourage reading “Insights for Tapping Growth in African American Buying Power”).

Eric Holoman, president of Magic Johnson Enterprises and chief operating officer of Aspire, added, “Since last September, we’ve done several focus groups, and what people told us they thought was missing in the marketplace was positive family entertainment for African Americans, content that both children and parents can watch together.”

But here’s the Marketing Caveat

Each network brand plans on positioning itself in a way that makes it stand apart from the others.  If all goes well this will further sub-divide the segment, giving marketers an opportunity to tightly focus their efforts on certain sub-segments within the larger audience pool.  Mixing and matching the right themes/messages with the right sub-segments can help establish and build a stronger rapport with customers and a greater affinity for a brand.

But before anyone begins to prematurely salivate at the prospect of this new gateway to opportunity, bear in mind that launching a TV network geared toward a niche audience is hardly an easy task.  It can be especially difficult to keep a rein on the costs of producing original programming that is both compelling and competitive for winning an audience.  And since original programming is one of the keys to carving out a truly viable market position, it’s an inescapable must.

An equally inescapable corollary is that it’s one thing to build it; it’s another to get an audience to come!

Variety deferred to someone who would know a little about this challenge when it observed: ‘Still, all of these new networks may want to heed the words of Oprah Winfrey, who is finding the launch of another new network — OWN, the Oprah Winfrey Network — far more difficult than she expected.

“The idea of creating a network was something that I wanted to do,” Winfrey recently told Gayle King, the new co-host of CBS’ “The Early Show” and Winfrey’s longtime best friend. “Had I known that it was this difficult, I might have done something else.”’

Twitter: http://twitter.com/KenRudich
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Email: ken@marketing-strategy-management.com

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