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Black Buying Power: Watch Where You Spend Your Money

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Most big advertisers don’t respect the African American consumer

By David Alexander, Special to the NNPA from Our Weekly –

How much do most big corporate advertisers respect the African American consumer—25 percent, 15 percent, 5 percent, or one percent?

If you guessed one percent you were wrong. It’s less than that—.68 percent, to be exact.

Of the $263.7 billion spent annually on advertising within the nation, less that one percent is used to target African American consumers, despite the fact that Black buying power is estimated at around $857 billion, according to the 2010 census.

Ken Smikle of Target Market News notes that “the largest single investment corporate America makes is advertising,” but only a trickle is spent targeting African American consumers, a group that has been and continues to be underestimated, underserved, disrespected and misunderstood.

Pepper Miller, co-founder of the Hunter-Miller Group, a multicultural marketing firm, and co-author of the book “What’s Black About It?” explains that one of the most common misperceptions advertisers have is that mainstream publications will reach all possible consumers. Since most African Americans speak English, they generalize, there is no need to market outside of the mainstream publications.

“Marketing is about segmentation, diversity and understanding who your customers are,” counters Miller, who has devoted many years to the field of diverse marketing. But why do advertisers feel that way when these facts are taught in most marketing classes, and when it is known that most African Americans generally distrust the mainstream media?

A 2008 study by Radio One entitled “Understanding Black America” revealed that only 13 percent of African Americans trust the mainstream media, and out of 29 million Blacks, only 2 million can be reached through mainstream publications.

In fact, there is a long history of corporations and organizations using Black newspapers for free press exposure while committing only a paltry amount of their vast advertising budgets to support the same papers that have opened up valuable editorial space to them.

A similar type criticism was lodged against Toyota by the National Newspaper Publishers Association (NNPA) earlier this year. The NNPA alleged that when Toyota’s image was hurt by devastating recalls a couple of years earlier, the Japanese car maker sought help from the Black press to restore the brand’s image and to encourage African American loyalty. The NNPA charged that Blacks stood by Toyota to the tune of $2.2 billion. However, in its $1.6 billion 2011 advertising budget, Toyota allocated only $20 million to be shared by all African American media, including newspapers, radio and television. And when Toyota ran ads thanking American consumers for remaining loyal, none of the thank-you ads ran in the African American press.

R.L. Polk & Co., an automotive marketing research firm, says African American consumers represent almost 10 percent of Toyota’s U.S. market share, with 15 out of every 100 automobile purchases by African Americans being a Toyota-made automobile.

Unfortunately, the slighting of African American media is a problem even among Black advertisers. The NAACP, the oldest and largest of civil rights organizations, ignored Black publications in advertising its annual Image Awards extravaganza. When doling out its advertising dollars for the event, the organization chose to utilize only mainstream publications. As a result, NAACP president and CEO Benjamin Todd Jealous was the target of much criticism from the Black press. Jealous claimed it was a “grave” oversight. “I am very sensitive to the need to support Black community newspapers. They are the only way to assure Black readers in a given community that you actually want your ads to reach them directly,” he said in response to the criticism.

This questionable marketing practice is also occurring in the music industry, where there are multitudes of African American performers. Despite this fact, the industry has invested few ad dollars targeting African American consumers.

This is occurring at a time when African American businesses and workers are hardest hit by unemployment and the ever-tightening economy.

Many executives in the movie industry are guilty of a similar myopia. They have operated on the assumption that African Americans will not attend a movie that does not have an African American lead and/or cast. However, a study conducted by BET this year revealed that 81 percent of movies seen by African Americans did not include an African American cast, lead actor or storyline. This same study also showed that the average African American goes to the movies 13.4 times a year in comparison to the general moviegoer who goes 11 times a year.

So the question becomes: why are these advertisers slighting their most reliable consumer?

According to a 2008 report from Packaged Facts, which publishes market intelligence on a wide range of consumer industries, Black buying power is projected to rise to about $1.1 trillion by 2012. There are currently 343,300 African American households within the United States earning $150,000 or more, as well as “819,700 individuals who earn a minimum of $75,000 per year.”

Although a number of companies have profited by marketing directly to the African American consumer, such as McDonalds, Gucci, Lexus, Lincoln, Procter & Gamble, State Farm, Infiniti, Bank of America, Wells Fargo Bank, overall most corporations and organizations have left the African American consumer out when it comes to their ad dollars.

In “Black Is the New Green,” authors Leonard Burnett Jr. and Andrea Hoffman write: “It would be foolish in the extreme not to tap into this rich buying segment, yet this is exactly what the marketing firms of companies (fail to) do all too frequently.”

While African American consumers are over-indexing (spending more dollars in certain consumer goods categories) in areas such as electronics, cell phones and the latest technology, those same corporations often do little to market directly to the African American consumer.

Marketers have a tendency to lump people into simple groups without considering their diversity within a category. The best example of this happens during February (Black History month) when marketers, if they advertise in Black publications at all, put all their eggs in one basket, so to speak, by only advertising in the month of February.

Although recognition of Black history is considered important, studies show that companies will fare better in the African American consumer market, if they appeal to the consumer throughout the year.

The term “urban” has been used to describe all African Americans for some marketers, despite the reality that the word really focuses more on African American youth, particularly fans of Hip Hop. This categorization leaves out many different segments within the African American population.

In “Black Is the New Green,” authors Burnett and Hoffman identify three key segments:

• Urban/Hip Hop/youth (18-34)
• African Americans (25-54)
• Affluent African Americans (25-44)

Although these findings provide some insight into the African American market, it does not take into account Black teens, African American women, or the Black Lesbian Gay Bi-Sexual Transgender community, which are all demographic areas that have increased their buying power and play a key role in influencing purchasing decisions of the household.

BET’s “African Americans Revealed” study, released last year, provides a much more detailed look at key segments within the African American consumer market:

• Strivers: Mostly in their late 20s to early 40s. Are adventurous, fashionable, social mavens who have their eyes on climbing the executive ladder • Conscious Sisters: Selfless women who are spiritually connected and highly conscious of their culture. • Tech Fluentials: Digitally savvy and travel in globally conscious circles • Bright Horizons: Young adults in high school and college who are aware of all available technology and electronic gadgets • Inner Circle Elites: Working women who are rich in cultural, ancestral and spiritual roots • Urban Dreamers: Young, urban adults who are social magnets and trendsetters intent on living life to the fullest • Survivors: Risk-taking teen and young adult males who are hustling to keep their existence in check

With these more detailed insights into the market, advertisers are able to have more information to carefully craft a message and to use Black publications more effectively.

In “What’s Black About It?” Herb Kemp and Pepper Miller explain that many years of neglect have caused what Na’im Akbar, Ph.D., considered one of the world’s preeminent African American psychologists, calls “The Filter,” which he describes as the nucleus of Black experience and culture.

“The filter has predisposed many African Americans to become overly sensitive about feeling stereotyped, and not feeling valued, respected, included and welcomed,” explained Miller and Kemp.

Miller further explains that “the filter” is one of the most “distinguishing characteristics between Blacks and other races.”

“If I were a marketer,” says Miller, “I would want to understand the filter and how we (the businesses and the African American consumer) can connect on a deeper level.”

There is some debate however, as to how prevalent “the filter” is among African American consumers. In “Black Is the New Green,” the authors explain that the African American consumer is mainly looking for “value and responds favorably to exclusive discounts.”

While many corporations and small businesses have good intentions about marketing to the African American consumer, often the results are not successful due to lack of knowledge, not properly tailoring the message, or cultural insensitivity.

“What Whites fail to see is very evident to the Black audience,” explains Robert Pitts, Ph.D., marketing professor at Chicago’s DePaul University. In “What’s Black About It?” he states that “Whites fail to realize certain social, respect and accomplishment values present in some advertising.”

Richard Poston, president of the Antelope Valley Black Chamber of Commerce, explains that one of the main misperceptions is that all African Americans “come from the same educational background and income.”

He further notes that African Americans have not been portrayed positively in the media. “When you have (some) newspapers that put images of African Americans getting arrested on the front cover or articles about Section 8 housing with pictures of African Americans, this creates false stereotypes. People get stuck on these stereotypes.”

Anthony Asadullah Samad, Ph.D., co-founder and managing director of the Urban Issues Forum, a nonprofit organization that holds monthly forums regarding local urban issues, explains that there has been a failure in, “not understanding the reach and base (of the African American consumer market).”

Samad also explains that many “advertisers do not think African Americans are brand loyal” yet he says that he and many other African Americans “continue to purchase a lot of the same brands that our parents did.” Numerous studies have revealed some common mistakes of advertisers who attempt to reach out to the African American consumer: • Use of Ebonics: The use of ebonics has been used in numerous ads in African American newspapers and magazines regardless of the type of reader the publication targets. Not only do many people find this insulting, but its use loses appeal to middle-aged and older consumers.
• Culturally insensitive advertising: Some advertisers have utilized the image of famous Black historical figures during Black History Month to promote products. Other examples include advertising that reinforces stereotypes.
• Not considering the publication: Some advertisers think of the African American consumer as a monolithic group without considering the main readership demographic of a publication. Does the publication appeal more to women, youth, baby boomers, affluent African Americans etc.? The message needs to resonate with the reader.
• Imagery: Many African American consumers have observed a lack of positive images when marketing to the African American community. Most want to see more positive images such as loving families, affluent African Americans, Black love, lifestyle-focused advertising and the beauty of African American women.

The key point to remember here is that African Americans are a diverse group like any other collection of people. Factors such as age, education, geography, interests and hobbies, income, gender, religion and other factors create different marketing segments to consider.

While opinions vary, many multicultural marketing firms such as the Hunter-Miller Group and Diversity Affluence agree that in order for businesses to increase profits by marketing to the African American consumer, there needs to be a level of understanding of different factors. These include: recognizing the strength of the African American consumer market, providing positive imagery and using culturally sensitive marketing.

Samad says, “The Black marketing industry (such as Black-owned advertising firms) needs to come together and develop unity and a consistent message.”

Non-African Americans need to understand that there has been a long history of neglect, disrespect and misperceptions of the African American consumer market. Business owners and executives stand to increase profits significantly, if they take the time to move away from antiquated methods that are not inclusive of an ever-increasing diverse population as well as messages that miss the mark. Also, companies that profit from the African American consumer need to be held accountable, if they are ignoring the patronage of African American consumers. Editorials in the Black press and effective use of social media are just some of the ways that this issue can be brought to light.

“Consumers have economic buying power that needs to be used better in their own self-interest,” says Smikle. “African American consumers should be asking if the brand (or store) they are purchasing from is making a contribution to the Black community or investing in the Black consumer market? How wide is the gap between purchasing (by the African American consumer) and investing into the African American consumer market?

Smikle also explains that social media can play a role in bringing attention to the issue of how corporations profit from the African American consumer, and whether these corporations are acknowledging Black consumer patronage by investing ad dollars in Black-oriented publications and/or the community.

“Someone has to have the guts to speak up in marketing meetings and discuss the competitive advantage of marketing to the Black consumer market … The customer relationship does not end at the cash register,” says Smikle.

Report: More North Carolina Kids Live in Poverty

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By Herbert L. White, Special to the NNPA from The Charlotte Post –

North Carolina children face more economic insecurity according to data from the Annie E. Casey Foundation.

The Kids Count Data Book found that North Carolina ranks 38th in key indicators of child health and well being in 2011, down a spot from last year. Well-being indicators, which the authors say usually trail economic markers, haven’t captured the recession’s impact and may not for several years.

“While important gains have been made for North Carolina’s children, clear challenges still exist,” said Laila Bell, director of research and data at Action for Children North Carolina, which commissioned Kids Count. “In 2009, half a million children in North Carolina lived in poverty – a particularly sobering statistic since we know that poverty affects children’s academic, health and future labor market outcomes.”

The data reveals a mixed message in North Carolina. The number of kids living in poverty ($22,050 for a family of four in 2009) grew to 504,000 while the teen birth rate declined to 49 births per 1,000 girls in 2008.

On the other hand, school dropout rates continued to improve, with the state ranking 29th in the U.S. at seven percent compared to 16 percent in 2000.

Economic and social gains for children started to slide before the recession, Kids Count data showed. In N.C., 90,000 children, or two percent of the state’s total, were in families that were impacted by home foreclosure. An estimated 253,000, or 12 percent, lived in homes that had at least one parent who was unemployed.

“Foreclosure and parental unemployment threaten the well-being of our children,” Bell said. “Evidence shows that stable, economically secure homes are critical components of child development and are essential to children’s life success.”

NAACP Leader Sees a 'Tidal Wave of Obstructionism' in U.S. Government

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NAACP Leader Shares Thoughts on Present, Future Challenges

By Charlene Muhammad, Special to the NNPA from The Final Call –

The National Association for the Advancement of Colored People (NAACP) held its 102nd Annual Convention at the Los Angeles Convention Center, July 23-28. Its theme was “Affirming America's Promise” of life, liberty, the pursuit of happiness, justice, hope, fair play, equality, change, and opportunity. Benjamin Todd Jealous, president and CEO, sat down with Final Call national correspondent Charlene Muhammad for a brief interview about key issues the NAACP is targeting as it moves into its second century of existence.

Charlene Muhammad, Final Call Newspaper (FCN): By the time of our publishing this issue, you will have ended your 102nd Annual Convention. What do you want people to understand about the NAACP and where it is today?

Benjamin Todd Jealous (BJ): We are strong and growing stronger by the day. In the past three years we've seen our online activists surge from 170,000 to start in 2008 to over a half million today. We've seen our individual donors and people who write checks apart from membership increase from less than $20,000 then to more than $100,000 now. We've seen our membership increase 12 percent to 230,000 today, so we're a family of hundreds and hundreds of thousands of activists who work together, online and in the streets in more than 1,200 communities across the country to ensure that in these tough times, when our voting rights are under attack, when the American dream itself is under attack, that our communities are well organized, well represented and engaged.

FCN: Let's talk about President Barack Obama, who is also under attack. He's considered one of the visible triumphs of the civil rights movement as the first Black president. Those loyal to him see any critique or criticism of him as an attack, and then there are people who are attacking him outright. What do you make of these different debates going on about the president and the impact of the Tea Party on those debates, and the political impact the Tea Party has had and continues to have?

BJ: Dr. (Martin Luther) King talked about southern obstructionists and interposition and nullification. We are living through one of those moments when our civic lessons we learned as children are important to remember. Congress holds the purse. There will be no major jobs program in this country until Congress decides to appropriate funds and we've seen just the opposite. They've continued to cut taxes to actually decrease federal revenues. That has put the president in a box. It is clear the president would like to see the government do more to shore up local governments, do more to create jobs, but because of this tidal wave of obstructionism that has come into the U.S. House of Representatives, the options are very limited. In this moment, our attack in dealing with the administration has been to focus more on eradicating discrimination because that's something that he does have control over. That is the responsibility of the executive branch. So, when Morial (Marc Morial, president and CEO, National Urban League) went in there, we certainly made the case that we're making to leaders in Congress. We also made clear that we understood where the obstruction lies in our government right now, in the House of Representatives, but we encouraged him and he agreed to do everything the administration could to both deal with what you might refer to Employment Discrimination 1.0—gender discrimination, racial discrimination, age discrimination—and Employment Discrimination 2.0.

There are types of discrimination that has cropped up and really all gone through the roof during the recession that tend to reinforce Employment Discrimination 1.0 and that's discrimination based on credit score. People are literally being discriminated against on whether or not they get a job based on having low credit. How does a person improve their credit if they can't get a job? Also, long term unemployment; people are figuring out that they're being turned down for jobs because people say, ‘Well, you've been unemployed too long. 'We've had years now of some of the worst unemployment numbers in the past century and certainly the worst since the Great Depression and again, how are they expected to change their status of being unemployed if we won't give them a job?

And finally, there's discrimination against formerly incarcerated people. We're a country that believes in second chances. We believe work is redemptive, and yet, we ended up trapping literally thousands upon thousands of children in foster care because we won't let their mothers work when they've returned from paying their debt to society in prison. Frankly, often having gone to prison when they shouldn't have because they should have gone to rehab. It is non-violent drug offenders even who are unable to find work when they return and as a result, their kids stay in foster care because you don't get your kids back when you get out of prison. You get your kids back when get out of prison and you find a job.

FCN: The defamation lawsuit of former USDA director Shirley Sherrod against blogger Andrew Breitbart is at trial. The NAACP in some aspects, and yourself personally, as a leader, has been criticized by some people regarding its role. Was it a knee-jerk reaction as some have said and how has the NAACP bounced back, or is bounced back a correct characterization of it?

BJ: We were the last to make the error of the USDA and the White House. We were the first to correct it and we did so in less than 24-hours. We put up the video, which we had to track down in rural Georgia and get to Washington, and get up. That frankly then spurred everybody else to take the actions that they took to apologize and seek to make amends. The true test of leadership is not whether or not you make mistakes, but whether you're quick to recognize them and how quickly you make amends for them. Unfortunately, we're all human. We're not perfect. We're proud that we quickly recognized our mistake. That we made amends for it in the same day and that we were successfully able to push others to do the same thing.

Blacks Bearing Brunt of Economic Woes

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By Larry Miller, Special to the NNPA from The Philadelphia Tribune –

While Republican and Democratic lawmakers inched their way through raising the nation’s debt ceiling - a seemingly never-ending series of arguments, which proved to be a last minute cliff-hanger - the numbers of the nation’s poor and unemployed also rose.

And those numbers show African Americans are bearing the brunt of the country’s financial woes. Basically, even as there are signs of economic recovery, the financial divide between Black and white is widening – sentiments that were loudly and vehemently expressed during a recent rally in Chicago by Tavis Smiley, Minister Louis Farrakhan and Dr. Cornel West.

The three sharply criticized President Barack Obama on his handling of the nation’s economic crisis and what they perceive as his lack of action for America’s poor during a rally in Chicago – the first stop on the three leaders’ 16 city Poverty Tour: A Call to Conscience.

“President Obama should acknowledge the poor and come back home to his base, even if it means being a one-term president,” said Farrakhan, in a published report.

According to the latest numbers from the Bureau of Labor Statistics, unemployment figures for the nation are at 9.1 percent. Those numbers for African American are 15.9 percent – figures that are double the 8.1 percent for white Americans.

The latest research by the Pew Charitable Trust shows that more than 4.2 million Americans have been unemployed for a year or longer – the highest numbers since the Second World War – figures that reflect the total population of the state of Kentucky. Another report from the Pew Fiscal Analysis Initiative for last April revealed even as the economy has shown signs of recovery, unemployment has risen.

Research by the Pew Charitable Trust shows that while long term unemployment is hitting all Americans of every age, older workers are the most likely segment of the population to be out of work longest. The report indicated more than 40 percent of unemployed age 55 or older have been out of work for a year or longer.

“The number of Americans who have been out of work for a year or longer is roughly equal to the population of Connecticut,” said Ingrid Schroeder, project director of the Pew Fiscal Analysis Initiative, which produced the report, in a press release. “Their unemployment has a significant impact on their families, their communities, and our government’s bottom line.”

And while the numbers of America’s unemployed rises, poverty rates are not far behind. A recent snapshot of the poverty rate in Philadelphia revealed 25 percent of the city’s residents are living in poverty.

The economic report released by the City Controller’s office for September 2010 shows nationally the country’s poverty rate has risen to 14.3 percent, or 43.6 million Americans – the highest figures in 15 years.

“Right now the figures stand at 25 percent,” said Harvey Rice, spokesman for the Philadelphia Controller’s Office. That rate of 25 percent pushes Philadelphia well above other cities in the United States. In 2000 the city’s poverty rate was at 15.2 percent. “We’re going to look at the figures again this September, but right now nothing has changed that we know of.”

What is the federal government going to do about turning these figures around? That question takes on new significance with impending spending cuts in the 2012 budget.

West has characterized Obama as the “Black mascot of Wall Street Oligarchs” and Smiley has said the president has forgotten the poor. But the White House has responded to these sentiments by saying that Obama is focused on those suffering because of the weakened economy every day.

“Every economic measure that he has proposed and every one that has become law because of his leadership has been geared towards helping those folks who are in the greatest distress because of the recession that we were in, the great recession, worst since the Great Depression, and those who are struggling as we emerge from it,” said Obama Administration spokesman Jay Carney during a White House press briefing.

“His focus on the most vulnerable communities was evidenced when he negotiated with congressional leaders late last year on the tax cut extension deal by insisting that, in addition to the payroll tax cut that he insisted be in it so that every American family – working American family would have on average an extra thousand dollars this year, he insisted on an extension of the earned income tax credit, an extension of the child tax credit, which disproportionately helps those who are disproportionately in need. It is why he insisted in the recent debt ceiling deal that Pell Grant funding be protected because those who deserve and qualify for quality higher education but are struggling to be able to pay for it because of their economic circumstances need the assistance that those Pell grants supply. So this President is very focused on every American who is suffering during these turbulent economic times, and the policies that he’s espoused and that he’s pushed take into account very seriously those who are most affected.”

Is Criticism of President Obama by Blacks a Betrayal?

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Professor Cornel West and talk show host Tavis Smiley do seem to think so; they have embarked on a nationwide tour to showcase what they see as Obama not doing enough for Black folks.

By Yussuf J. Simmonds, Special to the NNPA from the Los Angeles Sentinel –

As they embark on a nationwide tour, Professor Cornel West and Tavis Smiley have said that they will highlight hardships in communities across the nation, especially the Black and poor communities. The bus tour, which is drawing large crowds and media attention, is focused on the President's policies that West and Smiley believes are not inclusive of Blacks. Furthermore, they believe that the President does not have a Black agenda, and the question is should he? After all, supporters say that President Obama is not the president of Black America; he is the president of all of America.

Some Black lawmakers are said to be beginning a campaign to address the staggering unemployment rate among African Americans, an issue that has become a growing source of tension between members of the Congressional Black Caucus and the Obama administration. Lack of jobs for Blacks has created tension between Black lawmakers and President Obama.

Smiley and West will be kicking off the bus tour right in the heart of Chicago's Black community, the President's 'front yard.' And although West states, "it is not an anti-Obama tour," it does appear to highlight what they say is lack of effort by both the President and Congress to address the needs of the Americans who have been hardest hit by the recession. West has received criticism for speaking out against Obama.

Not too long ago, a colleague of Smiley, Tom Joyner, called those who criticize the President "haters" and that they needed to be quiet because he (President Obama) doesn't need the Black vote to be split.

Also, Rev. Al Sharpton had sharply criticized the motivations and integrity of those who questioned President Obama's willingness to meet with the CBC to discuss targeted jobs legislation.

Then former Princeton Professor Melissa Harris-Perry recently referred to Professor West's critique of the Obama administration as, "a self-aggrandizing, victimology sermon deceptively wrapped in the discourse of prophetic witness..."

It appears that a very troubling pattern has developed within certain segments of the Black community. There's a concerted effort by some to silence those who are offering honest, sincere, and well thought through analysis and criticism of the Obama administration particularly as it relates to the conditions of Black and poor masses. Especially, as they say that statistics show 97 percent of Black people voted for Obama.

The following is a BET.com interview with West prior to the tour.

BET.com: Why are you embarking on the poverty tour and whose idea was it?

West: Tavis Smiley and I had been talking for a year about how to dramatize the poverty and humanize our perception of poor people in America. This is especially so for the Black poor. Poverty has been criminalized, poor people demonized and what we want to do is dramatize poverty and humanize our perception of poor people to overturn what has been in place for so long. When he came up with this idea for the tour I thought it was a magnificent idea.

BET.com: What are some of the stops on the tour?

West: We're going to an Indian reservation in Wisconsin, we're going to hit the brown barrios, the Asian poor communities, White poor communities, the Black hoods and we're ending in Memphis to keep alive the legacy of Martin Luther King Jr.'s fundamental commitment to sanitation workers there, and of course his assassination.

BET.com: How are you going to share your observations and some of the things you'll see while on the tour?

West: We've got an embedded reporter from The Washington Post, camera people who'll be keeping track and of course, you'll be able to follow most every second of it on the Internet on the tavistalks.com and smileyandwest.com. And there will be documentary filmmakers so we can keep the story going after. I think we're going to see great dignity, great suffering and great resiliency.

What may be getting lost in the conversation is that honest criticism is not betrayal; it is part of the democratic process. It is democracy at its best ... or worst ... depending on who is criticizing whom.

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