Multicultural marketing in an era of increased diversity

As we look to 2025 and beyond, it is important to consider multicultural audiences when planning and creating an ad budget. This demographic, defined by a mix of ethnic, cultural and generational diversity, continues to grow each year. Collage Group reports that the US is set to become majority multicultural by 2042, with 42% of the population being from a multicultural background. For brands aiming to make a profit, having a marketing strategy that directly speaks to this audience is key. 

By the numbers

The US Census predicts a 6% increase in the Hispanic population, followed by a 3% increase in Asian and 2% increase in other underrepresented groups by 2050. The growing demographic and shift in buying power mean brands and agencies need to adapt their marketing strategies to effectively engage with culturally diverse consumers.

• Buying power. In the US, Hispanic, African American and Asian American consumers lead the multicultural market with buying power expected to reach $7 trillion by 2025. (eMarketer)
  • Hispanic – projected to reach $2.8 trillion by 2026, a 320% increase
  • African American – projected to reach $2.1 trillion, a 183% increase
  • Asian American – expected buying power of $1.9 trillion, a 367% increase from 2000 to 2026
• Population growth. Within 25 years, non-Hispanic whites will account for less than half of the American population. (Forbes)
• Digital engagement. Multicultural consumers are 10% more likely to engage with brands on social media than their non-multicultural counterparts, with high usage of platforms like Instagram, TikTok and WhatsApp. (Collage Group)
• Influence on consumer spending. Fashion, beauty, entertainment and food trends are heavily influenced by multicultural audiences, with over 75% of Generation Z and millennials reporting that they seek brands that reflect their cultural values. (Media Tool)
• Brand loyalty. 64% of multicultural consumers took action on a diverse or inclusive advertisement (WordStream) and 42% of Americans want to see more racial diversity in advertising. (Statista) 

These statistics illustrate the growing influence of multicultural consumers and the need for brands to engage authentically with this diverse audience. Horacio Gavilan, executive director of the Hispanic Marketing Council, discusses the value of the multicultural market and offers key insights to consider when developing your marketing strategy.

Q&A: Expert insights into engaging with a multicultural audience

What is the importance of multicultural marketing for brands and businesses?  

Gavilan: There is no denying that multicultural segments are driving growth, with the US Latinos leading the charge. Today, 20% of Americans are Latino, with people under 35 already a multicultural majority. According to a recent report by the Latino Donor Collaborative, US Latinos wield $3.6 trillion in GDP — essentially making them the fifth largest economy in the world and surpassing major economies like India, United Kingdom, France and Canada. It also is the second fastest-growing economy just behind China, and yet corporate America invests less than 5% of its marketing dollars. 

How can brands authentically engage multicultural audiences without falling into stereotypes?

Gavilan: Brands are barely scratching the surface when it comes to multicultural strategies. When it comes to Hispanic marketing, we at HMC call it Latino Coating, superficial marketing approaches coating products, campaigns, media or entertainment with Latino elements without a deeper connection, authentic messaging or meaningful representation. CMOs who continue to Latino coat are in peril of not only stagnating their brand’s growth but also kissing their careers goodbye. The general market is dead, and marketers need to wake up and follow the opportunity — it’s all about Latinos and multicultural markets as a whole.

Brands need the right partners to guide brands through the right cultural insights and develop the right messaging — it also is critical to invest at levels that reflect the opportunity multicultural audiences provide. By working with multicultural marketing experts, brands can ensure they are developing culture-driven business strategies that not only gain executive-level endorsement and support but also build brand loyalty and shareability. While original creative is often critical to driving brand awareness, familiarity and trust, brands should also create deeper connections throughout the year by sponsoring and supporting the many cultural festivals and passion areas that offer deeper connections beyond Hispanic Heritage Month with a steady drumbeat throughout the year.

What are some key strategies for understanding the cultural nuances within these diverse communities?

Gavilan: There is no silver bullet when it comes to multicultural marketing. We are not a monolith, just as whites are not monoliths. As experts in the multicultural space, we are able to navigate cultural cues, segment audiences and provide the right insights to ensure the most effective use of marketing dollars. To connect with the US Hispanic market, HMC’s Hispanic Market Guide serves as a road map to help marketers avoid the pitfalls of Latino coating. As the authoritative source for identifying companies with trusted Hispanic marketing expertise, the 25th anniversary edition of the guide also featured a checklist of offending practices and step-by-step instructions on getting Hispanic marketing right.

Outlook and emerging trends with multicultural audiences

Looking ahead, the multicultural market will continue to grow and shape the way consumers engage with brands. Working with multicultural marketing experts, tapping into data and connecting in an authentic way with this demographic is crucial to harnessing their buying power. By aligning with their values, respecting their identities, embracing inclusivity and investing in multicultural marketing initiatives beyond the generic, brands will not only build trust and loyalty but also gain a competitive edge in a market where representation matters more than ever.