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Catering to an Underserved Market: Randi Payton

 

Randi Payton’s Story: Randi Payton observed that African-American newspapers carried all sorts of coverage aimed at their readers -- except car reviews. So he started his own magazine, took a decidedly urban perspective for evaluating vehicles, and published it as a monthly supplement to African-American community newspapers.

Today 38 African-American newspapers across the country carry African-Americans On Wheels,  and so do a handful of major, mainstream metropolitan dailies including the Washington Post and Detroit News. Typically, 750,000 copies of each month’s 48-page issue get delivered throughout America’s major cities, and more and more people subscribe separately to African-Americans On Wheels as well.

“We’re the only automotive magazine of its kind, period,” Randi says. “For this audience, we’re right there in the middle between regular consumer magazines on one end and car-enthusiast ‘buff’ books on the other.”

The company is redesigning its web site. And in June 2006, Randi plans to launch new magazines aimed at two other fast-growing ethnic groups: Latinos on Wheels and Asians on Wheels.

“We’ve got enough going on now that we’re actually talking with venture capitalists and other investors about helping us expand,” Randi says. “Within a year, we could have 300% growth from that expansion capital. We’ve got everything in place in this industry to become a $10 million company.”

Randi’s Key Move: Catering to an Underserved Market

The Vietnam War vet and former PR guy became editor of the Washington African-American in the early Nineties and soon noticed a huge gap in the coverage that was provided not only by his newspaper but also by other black and ethnic newspapers in general.

Automotive coverage was absent from almost the entire genre of publications. They tended to do great coverage of everything from church picnics to entertainment news, from social announcements to sports, but they had declined to train their lens on the world’s largest consumer industry. And in their myopia, Randi believed, they were shortchanging readers who would eagerly greet the newspapers’ specific coverage of the vehicle market with their interests in mind.

At the same time, he was convinced that automakers, as advertisers, were missing out on a great opportunity to reach African-American consumers, who “trust and believe what they read in ethnic newspapers more than what they get in any other medium.” One big problem, he figured out, was that car makers hesitated to purchase ads in smaller newspapers whose circulation figures tended to be unreliable, because they weren’t audited by the big agencies that tally audiences of the nation’s larger newspapers.

Randi saw the possibility for filling the void and moved with both determination and deliberation to do it. First, he began writing weekly vehicle reviews and consumer content on the auto industry and syndicated it, free of charge, to about 200 black newspapers nationwide. It got swift pickup from his target-publisher customers – and also helped improve their advertising from local car dealerships.

Right from the start, however, Randi knew that he’d have to pay some dues. “You can’t just one day say that you’re an automotive journalist and have any credibility,” he says. “You have to become part of the network and get invited to press launches of vehicles and get to know the marketing people.”

In 1995 Randi tapped $10,000 of his savings and laid the groundwork for a new magazine that would greatly expand his take on vehicles for black consumers. And because he had become a legit part of the industry press, and had built relationships with automotive leaders, he was even able to get General Motors and BMW of North America to front him advances that paid for their companies’ advertisements in the first issue of African-Americans On Wheels. Randi used those proceeds to pay for its printing.

Randi also became the first major auto print publication to set up a website when he went online with Automag.com (which later became OnWheels.com) in July 1995.

Another crucial part of catering to this underserved audience was the kind of editorial product that Randi actually gave them. In fact, the unique editorial perspective of African-Americans On Wheels became a decisive factor in holding consumers’ interest.

“The majority of new-car buyers live in urban markets,” he says, “but most newspapers and magazines don’t act that way.”

So Randi deliberately adopted an urban point of view. While the typical benchmark in a review of a car is how fast it zooms from a standing start to 60 miles an hour, Randi instead chose to focus on a vehicle’s zero-to-40 time. “If you’re driving city freeways and streets, you’re much more concerned about zero-to-40 than zero-to-60,” he explains.

Similarly, his reviews focused on city-driver concerns such as turning ratios, ease of parking and whether a vehicle has OnStar, GM’s safety and security service, or something similar. “We focused on the consumer, and they recognized that,” Randi says. “One proof of that is that 53% of our readers are women. Even the buff books can’t get more than a few percentage points of women readers.”

Randi’s Bonus Insight

Entrepreneurs and large companies are both rushing to tap into growing ethnic markets in America. But Randi learned the hard way that execution matters just as much as opportunity.

He first tapped into the boom in America’s Hispanic population in 2002, with the first version of Latinos on Wheels. He and his big automotive advertisers wanted to publish in English and target second- and third-generation U.S. Latinos who, by and large, favored English over Spanish. But advertising agencies had a different approach: They were still focusing on first-generation American Hispanics who mostly preferred Spanish over English. So it became difficult for Randi to sell ads even to the automakers who had endorsed his strategy.

But with the next version of Latinos on Wheels, even the ad agencies have caught up with Randi’s correct initial interpretation of how to approach the Hispanic market. And the magazine will be printed in English, with a bilingual focus on culture.