into U.S.'s rich Asian consumers
Telcos lead the way with major campaigns
By Dave Lindorff
They spend between $100-200 billion a year, more than the GDP of a majority of the world's nations, have the largest family income of any ethnic group in America, including whites, and love top brands.
Of course, we're talking about Asians. What's surprising, though, is how little effort mainstream advertisers have traditionally put into reaching them. This despite a rich variety of media to choose from. There are some 600 nationally-circulated Asian language newspapers and magazines, and Asian language cable channels and radio stations available to advertisers.
"But they aren't getting a fraction of the advertising they should be getting from major advertisers." says Wanla Cheng, principal at Asialink Consulting Group, a New York-based research firm.
But Cheng, a former employee at Saatchi & Saatchi, says that's beginning to change.
The telecom industry, aware of the profit potential in high-margin long-distance phone calls to Asia, has been marketing itself heavily in the Asian-American community.
"Companies like AT&T, Sprint and MCI have been very involved," says Cheng. "And now the Baby Bells are starting to advertise to Asian-Americans too--especially Pacific Bell, which is in California where 40 percent of Asian-Americans live."
Also active marketers to Asian-Americans have been a number of financial services firms, notably Bank of America, New York Life and Met Life and Charles Schwab, the discount brokerage.
"They have recognized that Asians are big savers and investors," says Cheng. "But a lot of financial services companies still aren't targeting Asians."
Cheng says that her firm and others like it are getting contracted to conduct research on Asian-American markets by companies in the auto, healthcare and other industries, but so far few have taken the plunge and begun targeted advertising campaigns.
The irony is that Asian-Americans are particularly responsive to such targeted advertising.
Many Asians are immigrants, and back in Asia, buying American products is a sign that a family has made it. In China in particular, American products have a stellar reputation. A large chicken in the marketplace will be referred to as an American chicken, and no self-respecting Chinese official or businessperson would think of offering a guest anything but an American cigarette.
When those immigrants come to the U.S., they bring with them a marked preference for those U.S. brands that they previously bought in Asia. Hence the popularity among American Chinese immigrants of McDonald's hamburgers, Coca-Cola, Tylenol, Pantene and Head & Shoulders shampoos and IBM computers--all marketed heavily in China.
San Francisco Chinese-language TV station KTSF earlier this year conducted a study of brand preference among San Francisco's large Chinese population.
Station General Manager Michael J. Sherman concludes, "Companies that were cited as preferred brands, including AT&T and Bank of America, actively advertise to the U.S. Chinese community, or are heavily advertised in China."
Ironically, American businesses are probably spending more on marketing and branding campaigns in China than they are on marketing to the Asian-American community, though America's 10.8 million Asians are buying more American goods and services than all of China's 1.3 billion people put together.
Elliott Kang, president and CEO of Kang & Lee, a minority ad agency that was bought by Young & Rubicam a year ago, is president of the Association of Asian-American Advertising Agencies (the Five As), founded earlier this year by a group of seven Asian-American ad agencies.
Kang says that the Asian-American market, despite its relative wealth and consumer spending record, is the victim of wide-spread stereotypes that see Asians as mostly poor, immigrant sweat-shop workers.
In fact, he says it is a rapidly growing population with lots of cash, but one that largely sticks to its own languages and its own media.
Cheng offers another explanation for the lack of interest in the Asian-American market, saying, "It's a form of laziness really. Asians are only about 4 percent of the population, and people say, 'Oh, they're too diverse,' or 'They're too small a group.'"
That's a big mistake. Asians may only be a third the size of the African-American minority, but their average household income according to the last census is $46,695--nearly double the average black familyıs income of $25,872.
And their segment of the U.S. population is growing at 5.2 percent a year, much faster than Hispanics (3 percent), blacks (1.6 percent) or whites (0.6 percent).
Larry Moskowitz, director of strategic marketing services for Kang & Lee, says that the industry attitude towards Asian-Americans is changing, but he says convincing American businesspeople to test the Asian-American waters is still a hard sell.
"It's one battle at a time. The Asian language media is invisible to these people," he says. "They aren't even asking the right questions because the costs of media in this market are so small compared to even advertising Hispanic."
-Dave Lindorff is a staff writer for Media Life.