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Page 1 of 4
Digging for Black Diamonds
It is often said that in life there are those who know what is happening, those who don’t know
what is happening, and those who don’t know anything has happened at all. Remarkably, the
media industry’s response to the re-calibration of the 10-LSM® model into 14 New LSM
®
segments in AMPS 2008 encompasses all three states of awareness.
The realisation in 1997 that the original 8-LSM® model was no longer sensitive enough to
differentiate the increasingly complex media and product consumption patterns of upper middle
class and top end consumers, led to the initial recalibration of the original LSM®
7 and LSM® 8
segments, creating the 10-LSM® model that was in use until 2008.
Accelerated change in the South African marketplace and society at large has essentially
recreated the same set of circumstances that precipitated the 1997 split. The top end of the market
and the burgeoning middle class can no longer be effectively segmented by a simplistic 10-LSM®
model. Analysis of AMPS reveals that whereas in 2001 LSM® 1–3 constituted 39,5% of the adult
population, by 2008 that had been eroded to 21,5%. Correspondingly, LSM® 4–8 now constitutes
64,2% of the adult population (up from 50,7% in 2001).
That’s good news for the country and great news for marketers and media owners. That translates
into over 4 million economically active consumers moving into the product and media
consumption zone. These facts presented a clear case for the further sensitization of the LSM®
model and the only debate of any value which remains is how to use these new insights to create
better advertising campaigns and better return on media investment.
One application of the 14-LSM® model, which would provide value through consensus and
ultimately common practice, is to create a firm, quantifiable definition of so called Black
Diamonds.
The first significant efforts to identify black consumers as an homogenous consumer community,
with massive buying power, can be traced back to AMPS 1981 New Consumer Report and while
all the interesting insights that have been created around Black Diamonds recently have
reenergised the search, planners in South Africa are still no better off in terms of finding a
commonly accepted working definition and location for this market segment in AMPS.
One technique for unpacking the insights is the clustering of LSM®
segments and the early 8-
LSM® model offered three such clusters.
• Supergroup A ( Established Achievers): LSM® 6, 7 & 8
• Supergroup B (Emergent Market): LSM® 3, 4, & 5
• Supergroup C (Less Privileged): LSM®
1 & 2
Initially insightful as they were, from a media planning perspective, using the Supergroups was
rather like trying to dissect a piece of sashimi with a set of garden shears, and the Supergroup
Cluster Model soon fell into disuse.
Page 2 of 4
With AMPS 2008 now demarcating 14 LSM® segments, once again clustering of LSMs
®
provides a very effective means of managing the segmentation and creating practical, commonly
applied, market and media consumption insights. The Muller Cluster Model offers one such
option.
This simple macro-segmentation cluster model, based around a mid-point analysis of population
and household income suggests the following clusters …
• Traditional Market (LSM® 1–3)
o 21,6% of adult population contributing 4,4% Household Income
• Transitional Market (LSM® 4–5)
o 30% of population contributing 11,9% of Household Income
• Middle Class (LSM® 6–7 Low)
o 22,7% of population contributing 19,6% of Household income
• Upper Middle Class (LSM®7 High–10 Low)
o 22,7% of population contributing 51,1% of Household income
• Elite (LSM®10 High)
o 3% of population contributing 13% of Household income
It lies outside the scope of this submission to articulate the process of data analysis, but from a
pragmatic planner’s perspective the model is a sensitive differentiator of both media and product
consumption. So, can the model isolate Black Diamonds as a segment and more importantly,
from a media planning perspective, does it identify unique media consumption patterns for that
segment?
Page 3 of 4
Nobody has debated the volume contribution of black consumers in the South African
marketplace for 40 years so let’s assume Black Diamonds is a reference to above average
consumption and value. Simplistically then we can eliminate the Traditional and Transitional
market segments (LSM® 1–5) as having below average buying power; 51% of the adult
population generate only 16,3% of total household income. Similarly the Middle Class (black,
white, or purple) are not diamonds because of their average buying power. Call them Cubic
Zirconias if they need a gemmological name.
Elite consumers represent only 3% of adult population but their obvious wealth and conspicuous
consumption clearly identifies them as a distinctly demarcated market segment, making them
more valuable in isolation than simple diamonds. Let’s call them something uniquely African.
Call them Tanzanites.
By process of elimination, all that remains is the Upper Middle Class segment. 23% of total
population accounting for over 50% of total market value! They are bench-pressing more than
twice their mass and that’s a pretty valuable contribution. That’s why the lock-forwards in a
rugby team are called the engine room. Black consumers represent 36% of this massive economic
powerhouse and if you need to give them a name, then Black Diamonds will do.
Like all Upper Middle Class households they are, of course, heavy consumers of all media forms,
but do Black Diamonds have a unique pattern of media consumption which distinguishes them
from their immediate neighbours? If we examine the Gauteng region, which accounts for 35% of
the Upper Middle Class and 44% of Black Diamonds, we can discern very clear points of
variance in terms of media selection and consumption.
Media Daily Press Weekly Press Magazines Regional
Radio TV
Home
Language
Market Segments Top 2 by Media Type Most Spoken
Daily Sun Sunday Times True Love Kaya SABC1 Zulu Black Diamonds
Sowetan City Press Drum YFM ETV Tswana
Upper Mid Class Beeld Sunday Times Huisgenoot Highveld SABC2 Afrikaans
(Ex Black Diamonds) Star Rapport You Jacaranda SABC3 English
While there are points of cross-over, Sunday Times being the most significant example, it is quite
clear that different segments in the Upper Middle Class manifest widely varied media
preferences. Having eliminated income as a catalyst it is not unreasonable to conclude that,
particularly with respect to broadcast media, the issue of home language communication is
critical.
Page 4 of 4
We all understand that when we are in Rome we are to do as the Romans do. That presumably
would include speaking in Italian. When it comes to advertising, we can only wonder why it is
that this rule is not universally applied to Upper Middle Class consumers in South Africa. Maybe
when it comes to cultural awareness, as media planners, we just don’t know our ayoba from our
eita hola!
Source: Reprinted by permission of Gordon Muller of GSM Quadrant – Independent Media Insight &
Evaluation