Marketers have been wilfully neglecting Britain's ethnic minorities. Or at least that was the message from a study released last month by Weber Shandwick Worldwide. It found that the vast majority of Asian (77%) and black (78%) consumers in the UK feel that mainstream marketing has no relevance to them.
This view is shared by Patricia Macaulay, head of black and minority ethnic (BME) communications at the COI. Given the government's obligation to communicate to the whole population, the COI has led the way in targeting ethnic minorities, with campaigns on issues such as forced marriage. But that enthusiasm has yet to be matched by brands. 'There is a lot of talk in the private sector about the BME population, and people are starting to discuss the importance of it, but not a lot is actually being done,' says Macaulay.
In the 2001 census, Britain's black and minority ethnic population stood at 4.6m, or 7.9% of the total population. The term refers to all non-white communities, the biggest being Indian, Pakistani, black Caribbean and black African.
There has been an attitude that this market is too small to take seriously. But this is starting to change as the significance of the BME population becomes apparent; the working-age population of ethnic minorities is set to grow 20 times faster than that of the white population by 2010, and it is a younger population concentrated in urban areas, with nearly half living in London.
Economically, BME consumers are a growing force. In 2002, the IPA estimated the population's disposable income to be £32bn and recent research has underlined the growing importance of ethnic minority markets to some brands and sectors. According to Starfish Research, which carried out a detailed study last year, BME consumers are three times more likely to own a BMW than the population in general and twice as likely to own a Mercedes-Benz. They are also more likely to own laptops and iPods, use the internet and have digital TV.
One reason it has taken so long for brands to recognise the BME influence is a lack of data on their media and brand preferences. 'The hard-to-reach groups are also hard to research,' admits Mark Greenstreet, managing director at Carat Insight. 'It is likely that many groups are under-represented in mainstream research. It is hard to know whether you're picking them up or not.'
That the management of most organisations is predominantly white is problematic. As ethnicity tends to be more significant for minority groups than it is for the majority, it is simply less apparent to white marketers that appealing to BMEs may be an important issue. There is also an anxiety about the potential backlash if the wrong approach is taken. 'It is a leap into the unknown,' says Parveen Bdesha, director of Starfish Research. 'Brands don't want to be accused of racial stereotyping.'
Yet there are signs that this hesitancy is beginning to subside. Financial services companies have been quick to offer specialist services, such as money-transfer products to allow people to send cash to their families overseas, or banking products that comply with Sharia law. Telecoms brands, too, have run campaigns targeting minority groups. For example, last year Orange targeted high-value Asian customers with a package for customers of B4U Movies, a Bollywood film channel; the package included free Bollywood ringtones.
There is a definite opportunity for brands and sectors that help BME customers foster and maintain links with overseas markets. One reason technology take-up is high among these groups is that it offers a way to communicate with relatives - Asian women, for example, are particularly keen users of Skype. Lloyds TSB has sought to tap into this by developing a product that helps UK citizens take out mortgages in India.
The US, where marketing specifically to Hispanic and black consumers is well-established, is the obvious comparison. While the US has a far greater ethnic market - both in terms of population and spending power - many commentators believe Britain will follow a similar line as companies look for ways to grow. 'In America, it is not just the buying power of ethnic minorities that forced the hand of brands,' says Terhas Asefaw Berhe, director of Ethnic Communications. 'Companies need new markets. In saturated sectors, they are looking for growth areas in ethnic communities.'
One company keen to take advantage of this is data-management firm Experian. It recently launched a tool called Ethnic Origins, developed in conjunction with Richard Webber, visiting professor at University College London. The tool can process consumer databases and work out with reasonable accuracy the ethnic origin of each individual, based on their name. The idea is to allow organisations to segment consumers by ethnic community and target them with relevant offers.
So far the tool has been taken up most enthusiastically by the public sector. The police, for example, has used it to identify Hindu and Muslim consumers in Surrey and target them with a mailing campaign about racism. However, there is private-sector interest too; one of the major supermarket chains is using it to form a better idea about its customers' backgrounds. 'Once the government is seen to be using it, commercial organisations will become less nervous about it,' says Webber.
The first step for brands interested in targeting the BME community is to know the communities they want to target. There is a tendency to see the BME population as a single group, but it is more a patchwork of different communities, each with its own needs. Deciding to target 'Asian' consumers, for example, is not enough, says Dal Singh, marketing manager at ethnic communications agency The Marketing Effect; more in-depth questions must be asked. 'Do you want to speak to the Indian, Pakistani or Bangladeshi communities? What are the cultural differences between each one? Do you know what media each community watches, reads and listens to? What are key cultural dates and events for each group? What are the spoken and written languages in each community? Do you translate?'
There are therefore very different ways of reaching the various communities. The Asian population, for example, has established media catering to it and is more likely to watch ethnic TV stations or listen to ethnic radio than black consumers.
There may well also be differences within communities, especially between different age groups. First-generation immigrants often have different attitudes to second- and third-generation. That said, the idea that ethnic minority consumers born and raised in the UK join the mainstream population - and thus consume mainstream brands and media - is a myth, according to Dr Marie-Claude Gervais, research director at ethnic research specialist Ethnos, who adds that those targeting the ethnic population must appreciate the fluid nature of interaction between ethnic consumers and the mainstream.
Gervais argues that someone may appear assimilated into mainstream culture in their work environment, but in their private lives (what they eat, for example) may remain rooted in their community. 'Integration is not a homogeneous process. A person could be separated from the mainstream in some areas of their life, and totally integrated in others. It is about understanding the complexities of the ways people relate both to their own communities and other communities.'
Total assimilation is something most ethnic consumers actively resist. The Muslim population is a good example, as the fall-out from 11 September 2001 has led to renewed tensions between the Muslim and white communities, making British Muslims more aware of their Muslim identity.
Gervais argues that there is a major opportunity for brands to target ethnic consumers determined not to lose touch with their roots. She points to research that Ethnos conducted for BSkyB, which found that one of the groups most eager to subscribe to Asian TV stations was young parents, born and raised in the UK. Their goal was to ensure their children retained links to their cultural heritage, precisely because they felt unable to provide this themselves. As communities become more established in the UK, this band of UK-born, educated, roots-oriented consumer will grow in number.
A common complaint is that marketers seeking to be more inclusive do little more than put a few ethnic faces in their ads. True inclusivity is about understanding the different needs of BME markets, how they overlap with and diverge from the mainstream. Targeting minorities need not be about separate products, campaigns and media; it can be about appreciating how a campaign will resonate in different communities and can be tweaked to serve them better. 'Although every campaign is different, relevance is key,' says Rakhee Vithlani, head of multicultural communications at Weber Shandwick Worldwide. 'Sometimes it isn't as much about treating groups separately, as it is adapting communications to reflect the varied audience.'
The consensus is that marketers need to act now. BME consumers tend to be more brand-loyal than the white population so there is a huge first-mover advantage for brands interested in this population. 'If they do something in three years' time, they will have missed the boat,' adds Vithlani. 'Brands that get in now will reap the rewards now and in the future.'
For a detailed breakdown on the media and brand preferences of BME Britain and a detailed demographic breakdown, see the 18 April edition of Marketing magazine.