Reaching Multicultural Audiences in a Fragmented Media Ecosystem
The media ecosystem has undergone profound change in recent years with the introduction of OTT SVOD services and virtual MVPDs like YouTube TV, Sling TV, DirecTV Now, Playstation Vue, and Hulu with Live TV, which enable consumer access to endless content choices.
As consumers revel in their newfound ability to control their media experiences, players on the business side of the media ecosystem face enormous challenges. Networks and content providers must learn to reach fickle audiences, which are harder to find, to please, and to retain. Advertisers and media buyers must make critical decisions using metrics that have not fully adapted to the new environment. Even new players must keep their expectations in check. While they have disrupted the traditional media ecosystem, they find themselves subject to the same challenges traditional players face.
We have long asserted that America’s multicultural audiences have always been among the best entertainment customers on the leading edge of the tech adoption curve. Indeed, from 2013 on, Asian, Latino, and Black audiences have consistently been ahead of the streaming curve. While average TV viewers spends 43 percent of their time with live TV and 35 percent with streamed content, Latinos, Blacks, and Asians split their time between live and streamed TV, with about 4 in every 10 hours spent on live, another 4 in 10 on streaming, and the rest on VOD, DVR, or DVDs.
Across households, the explosion of streaming can be directly correlated to the growth of connected TV penetration. Our tracking data shows that when streaming was a second-screen phenomenon, it had little impact on in-home TV consumption or the perceived value of these services. Back then, traditional platforms (OTA or cable) dominated in-home viewing, with streaming limited to out-of-home mobile viewing, viewing TV contentin rooms without a TV, or co-viewing scenarios while the main TV set was being watched.
With almost 8 in 10 households now having some sort of connected TV all bets are off. Clearly, there is a correlation between the increased penetration of connected TVs and cord cutting: Indeed, we’ve found a decrease of 11 percent, self-reported, of traditional multichannel penetration since 2014.
Notably, Latinos and Asians are likely to show fewer signs of cord cutting than White and Black households, due to the “stickiness” of in-language and in-cultural packages.
Half of the viewers surveyed subscribe to an OTT SVOD service like Netflix, Amazon Prime, or Hulu; 30 percent of households have more than one.For the most part, these services complement traditional MVPD services.
Moreover, 15 percent of households subscribe to a vMVPD such as YouTube TV, Sling, DirecTV Now, Playstation Vue, or Hulu with Live TV, and Hispanic, Black, and Asian households are even more likely to experiment with these services. But given these services’ “cable-like” benefits, combined with their OTT SVOD-like functionalities and user experiences, we anticipate this changing dramatically in the near future.
When we asked consumers who did not subscribe to a MVPD, most participants point to the lower cost of these services and the liberation from long-term contracts as the main drivers. But, these platforms’ tech forward features are also major drivers.
The Content Omnivore Paradigm
In this complex media space, how can today’s audiences be entertained and retained?
We believeto succeed today, companies must make it a strategic imperative to cater to the needs of Hispanic and multicultural consumers. These larger households are run by younger parents and are more likely to include children than their non-Hispanic counterparts. They are often multigenerational and multilingual. To keep up with their varied content needs, they are willing to use all the platforms, screens, and services available.
This environment creates opportunities for content creators and networks. For example, even though much critical acclaim goes to cable, premium, and OTT shows, broadcast content still matters to multicultural audiences, as well as Millennials, 71 percent say that broadcast TV shows are important. But in today’s transformed media ecosystem, perception is everything. Six in 10 consumers think streaming services offer better shows than broadcast,
Breaking Boundaries, Resetting Expectations around Content
Despite the continued importance of broadcast fare, OTT SVOD services have pushed the envelope, setting a higher bar by democratizing access to the kind of engaging content that once was the exclusive purview of a few cable and premium networks. Nowadays, dystopian dramas, dramas with edgy, urban themes, and narco-series (which appeal across ethnic groups) compete on the same platforms with “cookie-cutter” shows like medical and police procedurals.
Our data on Spanish-language viewing underscores the imperative to innovate, and points out opportunities to reach new audiences. The Hispanic market is always in flux, with Spanish-dominant audiences broadening viewing horizons as they become fluent in English. One would anticipate that Spanish language viewing will decline over time while English language viewing will increase, but, surprisingly, the data shows that the share of Spanish-language viewing among bilingual and English-oriented Latinos has increased over time—likely do to improvements in the quality of Spanish-language TV, as well as increased access to quality bilingual and Spanish-language content in the OTT space (i.e., "Narcos" and "La Casa de Papel"). Almost nine in 10 bilinguals watch some Spanish language television, spending 34 percent of their TV time with Spanish content —up from 26 percent in 2013.
Indeed, providing culturally attuned content is critical. People want their stories told. About half of Latinos and Asians, and two in three Black viewers, say it’s important to have access to content created for them. Given the box office successes of movies like "Black Panther," "Crazy Rich Asians," and "Instructions Not Included," it should be no surprise that over half of Latinos and Asians, and two in three Black respondents would make an effort to check out a show that features characters that look like them. The bottom line: All of us want to have our voices reflected in the broader context of media,which is why 6 in 10 viewers across ethnic and racial groups, say that shows featuring diverse casts are more reflective of America today.
Advertising in a Fragmented Ecosystem
In this increasingly fragmented ecosystem, knowing which medium drives ROI for advertisers is increasingly challenging. But it’s more about creating an opportunity for audiences to have a holistic, omnichannel experience with a brand or campaign.
When consumers were asked of all the media they are exposed daily which is most effective for brands, TVstill reigns: 6 in 10 consumers say it is the most effective way to reach them; half say that ads placed during streamed shows and TV product placements are effective.And, in our increasingly personalized environment, organic social media relationships that a brand builds with customers are critical.It’s all about being everywhere your customer is
In social media, Facebook still has a reach like no other: 6 in 10 consumers across all segments are daily or almost daily Facebook users, compared to 29 percent who are Instagram users, 22 percent who use Twitter, and 17 percent who use Snapchat. Hispanics over-index on all social media platforms.
But especially among multicultural Millennials (18 to 34), social media usage is fragmented, with Instagram quickly catching Facebook.While 62 percent of Latino Millennials use Facebook daily, 54 percent use Instagram.Among Black Millennials, 54 percent use Facebook, 49 percent Instagram; among Asian Millennials, 62 percent use Facebook, 55 percent Instagram.
To Build Relationships, Take a Stand
Brands, too, must acknowledge multicultural audiences to create resonant advertising. Almost 6 in 10 Latino and Black consumers and over half of Asian consumers say it appeals when a brand creates advertising that includes people who look like them. Across multicultural groups, 6 in 10 consumers (over 4 in 10 White consumers) say it appeals when a brand creates advertising that features people of different cultures, races, ethnicities, sexualities, and lifestyles. Among Latinos, making a meaningful connection also means acknowledging their bicultural, bilingual lives in advertising
In today’s highly polarized environment, some brands may be hesitant to create advertising that is inclusive, or take a stand on political and social issues. But it is becoming increasingly necessary to do so. For young people especially, brand perceptions are intrinsically tied to aligning with brand values. Thirty-eight percent of White, 40 percent of Latino, 42 percent of Black, and 42 percent of Asian Millennials say it has a positive impact on their likelihood to buy from a company whose values match theirs. Yes, backlash should be expected, but backlash gives people a reason to not just be a consumer, but to become a brand advocate. The bottom line, as Nike just experienced, showing solidarity with your audience can have a positive impact on ROI.
Crack the Code, Be Bold, Be Nimble
Today’s transformed media ecosystem is fundamentally changing the way people discover, interact with and feel about content and advertising. Indeed, we stand on the brink of even more change. Developments in the connected home, the connected consumer, and our ability to deliver ever more personalized messaging through AI and 5G are upon us.
Audience expectations of the quality of content and advertising are already high. Expectations about engaging with content and brands in more personalized and transparent ways will quickly rise. As change accelerates, it’s critical that brands get in front of trends in technology and think strategically about leveraging them to build lasting consumer relationships.
We need to move beyond a transactional mindset and recognize that every touch-point, every channel, every social media post presents an opportunity to build relationships with customers that turn them into fans who will promote your brand or content.
But the stories need to be authentic. The execution must be inclusive; brand values need to be transparent. For media brands and advertisers today, there’s no choice but to be bold.
[Editor's Note: This is a contributed article from Horowitz Research. StreamingMedia.com accepts vendor bylines based solely on their value to our readers.]
Hispanic Streaming Going Forward