In some affluent circles, the expectation to wear luxury apparel is the same across all races. But blacks inside and outside of the boardroom, courtroom, and ballroom have been known to lead fashion in popular culture through the consumption of luxury brands.
African Americans spent $27 billion on apparel and services in 2008, according to data compiled by Ken Smikle, president and founder of Target Market News, a company that researches marketing, advertising, and media targeting African Americans. But despite that, very little luxury advertising is placed in African American media. This is a problem because without advertising, black media can’t survive.
Luxury fashion brands have demonstrated a history of overlooking black publications, says Earl “Butch†Graves Jr., president and CEO of Earl G. Graves Publishing Co., the publisher of Black Enterprise magazine and an outspoken critic of discriminatory advertising practices.
“If African American consumers actually knew what advertisers generally think about them–or how little they think about them– they would be shocked,†said Graves.
Due to the collapse of the American economy, all companies have slowed spending with advertising across the board. However, a snapshot of ad spending at 23 luxury parent companies that sell apparel, jewelry, timepieces, and accessories in the U.S. shows that most of these brands spent very little to no advertising dollars with black magazine titles.
According to data compiled by Kantar Media, a marketing and research company, the top four magazines targeting black audiences, Essence, Ebony, Black Enterprise, and Vibe, received 0.54% of ad revenue from the 23 luxury retailers in 2008. None of the companies placed ads in Ebony magazine that year. Also, according to Upscale magazine, none of the luxury companies included in Kantar’s research placed ads in their publication.
Fourteen of the 23 companies spent zero ad dollars with black magazines, including Rolex Watch Co., Giorgio Armani, Prada, Gianni Versace, and Coach.
Louis Vuitton Moet Hennessey (LVMH), the parent company to brands including Fendi, Tag Heuer, Marc Jacobs, and Louis Vuitton, spent the most money on ads in black publications. They bought about 12 ad pages for $1.2 million in 2008. (More than six of those ads were for Hennessey.) On the other hand, LVMH bought 1,014 ad pages in about 70 general market publications for $192 million.
Essence, with a total circulation (including subscriptions and single copy sales) of 1,092,721, regularly showcases high-end fashion and style, yet received $2 million in total ad spending from the 23 luxury companies, while titles such as Marie Claire, with a circulation of 992,595 (including subscriptions and single copy sales), received $1 million in spending for Macy’s ads alone.
LVMH did not respond to requests for comments.
Power of the Black Dollar
So why the disparity? Some believe that luxury companies don’t advertise in black print media because black consumers don’t buy their products, but the reality is that the buying power of blacks is projected to grow to more than $1 trillion by 2012, according to the University of Georgia’s Selig Center for Economic Growth.
“Remember, a lot of people saw Michelle Obama and thought she came from Mars,†says Robin Givhan, a Pulitzer Prize-winning fashion reporter. “The idea that women like her existed outside of the Cosby Show came as a bolt of lightening for a lot of people.†On the campaign trail she wore high-end designers such as Narciso Rodriguez, Thakoon, Sonia Rykiel, Moschino, and mid-range items from J.Crew and H&M. Before she left Chicago for the White House, the first lady was known to shop at Ikram, a high-end women’s boutique.
Others believe that the companies don’t advertise with black media because they don’t have to. They know African Americans will buy the products, so why bother?
Carol H. Williams, founder and CEO of the Carol H. Williams advertising agency (No. 2 on the BE Advertising Agencies list with $311 million in billings), says the “cool†factor in African American buying power makes it worthwhile to target such a loyal consumer base. When blacks buy a product, she adds, that product becomes popular and worthy of consideration by other consumers.
Regardless of the reason behind the dearth of advertising dollars, luxury brands haven’t caught up to the 21st century, says Milton Pedraza, CEO of the Luxury Institute, a research organization that studies high net worth consumers.
“I think it is a benign lack of knowledge. There is no malice or ill intent toward anyone. The luxury industry has always been very product-centric and not customer-centric,†says Pedraza. “That means [they] are not tracking which customers buy at which time. They don’t have a plan. [They are] focused on selling the best scarves, the best ties, the best shoes [and] thinking about design and fashion.â€
But Givhan says that in a multicultural global industry, ignorance is no excuse.
Indeed, resources abound about the spending habits of blacks. They range from annual statistics from Target Market News to experts such as Leonard E. Burnett Jr., publisher of Vibe Magazine and former founder of Vanguard Media, which published Honey, Heart & Soul and Savoy magazines. His new book, Black Is the New Green: Marketing to Affluent African Americans, (Palgrave Macmillan; $35)Â explores the viability of the black dollar and why the African American consumer should not be ignored.
Diversity Dilemma at Ad Agencies
The lack of diversity at
most general market ad agencies likely leads to a lack of ad placement with black publications, says Sandra Sims-Williams, senior vice president of diversity & inclusion at VivaKi, the digital marketing arm and media communication of Publicis Group SA.“[Agencies] have a definition of who African Americans are based on an old assumption,†says Sims-Williams, who founded the Roundtable of Advertising Diversity Executives to increase diversity in the field. “They are not enlightened by the buying power of African Americans. They don’t know how key the segment is to our economy.â€
To change the practice where black Americans spend money but black media doesn’t receive any ad revenue in return, Smikle, Graves, Sims-Williams, and Pedraza all say that black consumers need to start asking more questions. First, they need to ask retailers why they don’t see their ads in black publications, on black radio, and black television. Sims-Williams adds that luxury clients have to pressure the ad agencies to spend more with black publications, she says.
And if conditions don’t change, then consumers should leverage their buying power accordingly and consider spend their money elsewhere, Smikle says.
Additional reporting by Wesley Miller
RESOURCES
The African American/Black Market Profile
The NAACP Madison Avenue Project