Annual Edition 'Buying Power of
Black America' report breaks down billions in expenditures Black
consumers are responding to tighter economic condition by focusing more of
their spending on items and services that improve their homes and
lifestyle. That's one of the trends revealed in the 15th annual report,
"The Buying Power of Black America," published by Target Market News. The
report analyzes spending for black households in 2008 and finds that
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King to raise ad spending on black consumers after cutting black agency
(August 24, 2010) In an article appearing last week in the New York
Times, Burger King executives announced that they were re-assigning
advertising accounts handled by ethnic advertising agencies to general
market agencies. The shift was being made because top executives at the
quick service restaurant chain believe that younger African-American and
Hispanic consumers don't necessarily view the world as ethnically
divided, but rather as "a melting pot."
"We felt the right decision for Burger King is to address all our
consumers as a whole, instead of taking a segmented approach," Leo Leon,
vice president for marketing impact at the Burger King North American
operations was quoted as saying.
UniWorld Group, which had for decades been Burger King's
African-American agency of record, has seen its assignment diminish over
the past years with Wunderman, a WPP agency, handling more and more of
the advertising targeting black consumers. Hispanic-owned LatinWorks
will have its assignment for Hispanic advertising re-assigned to Crispin
Porter & Bogusky. According to the article, Burger King said UniWorld's
field team members will be offered positions at Wunderman.
Executives at Burger King are also quoted as saying, now that the shift
is being made, they intend to increase the dollars spent to advertise to
blacks and Latinos by "more than 30 percent." However, industry figures
show that Burger King has been cutting ad spending while their ethnic
agencies handled ethnic marketing.
According to data from Nielsen's Ad Views, Burger King spent $8.7
million with black targeted media in 2008. That figure dropped by 27
percent in 2009 to $6.3 million. The biggest decline in actual dollars
was in spot advertising purchased on urban radio stations and
black-targeted cable TV programs.
Burger King's total advertising spend in 2009 was $401 million.
Ironically, the ad spending cuts in black-oriented advertising come at
time when African-American consumers are spending slightly more per
households on eating at fast food chains than their white counterparts.
According to "The Buying Power of Black America" report, Black consumers
increased their spending at restaurants about five percent to $20.4
billion in 2008. About $1.1 billion is estimated to have been spent at
Burger King by African-Americans.
Burger King is taking a decidedly different approach than the industry
leader McDonald's to tapping into the billions of dollars represented by
black consumers . While both restaurant chains have retained an
African-American agency of record for about the same number of years,
McDonald's continues to rely on Burrell Communications for strategy and
creative targeting the African-American market. Burger King claims about
a 22 percent share of the quick service restaurant business, while
McDonald's has 41 percent.
Though Burger King has made numerous changes in advertising agencies
over the past 30 years, it had its most consistent agency relationship
with UniWorld Group. At one point during the long partnership, when
Burger King took almost a year to decide which new general market agency
to hire, UniWorld handled all of the restaurant's advertising, including
general market and Hispanic.
The Rev. Al Sharpton said on his radio show he intends to address the
elimination of Burger King's African-American and Hispanic ad agencies.
Members of The Marketing & Media Project of the Rainbow PUSH Coalition
have said they will request a meeting with Burger King executives to
discuss the change.