Crossing the color line; African American advertising agencies fight to prevent mainstream firms from taking their most prized possession—the urban market - B.E. Advertising Overview - Industry Overview

Black Enterprise, June, 2002 by Cassandra Hayes

Brown is the new black. In fashion, that trend might last only a season but In advertising it could last a lifetime. Last year the ever evolving "urban market" continued to be redefined as the 2000 Census data sent advertisers scurrying to address o Hispanic market that is predicted to triple in size by 2050 and account for 24% of the total U.S. population. "There has been this knee-jerk [reaction] away from the African American and even Asian market without forethought, and that's dangerous," says Heide Gardner, vice president, diversity and strategic programs at the American Advertising Federation (AAF) in Washington, D.C. "The truth is that the American marketplace has changed. Based on today's formula, advertisers may not be spending the right amount of money in any of these markets."

Indeed, the Hispanic market cannot be ignored. For years it was a case of "what's yours is yours and what's mine is mine" as Hispanic and African American agencies catered to their respective markets. Some black agencies have tried to answer the needs of their Hispanic clients, but in most cases the language factor drove advertisers to Latino agencies. Last year African American ad agencies not only continued to compete with general market, non-ethnic, and boutique agencies but they also found ways to contend with urban marketing budgets that are becoming increasingly more focused on the Hispanic market.

THE YEAR IN REVIEW

According to a Universal McCann Insider's Report, overall ad spending in 2001 dropped an estimated $233.7 billion, down 4.1% from the previous year. Wracked by a softened economy and the events of Sept. 11, the industry suffered its worst advertising spending decline since World War II; but advertisers kept their eyes and budgets on the lucrative "urban" market estimated to have $890 billion dollars to burn, as reported by UrbanIQ, a New York-based market research firm.

And with African American spending power hovering at nearly $600 billion, according to the BE BOARD OF ECONOMISTS, there's no doubt where most of those urban dollars lay. "It is not that corporate America doesn't believe in African American marketing, it's just that they are trying to do it without African American involvement," states Ken Smikle, president and CEO of Target Market News, a Chicago-based market research firm. Overall 2001 billings for agencies on the BE ADVERTISING AGENCY list rose by 8.74% from $1.2 billion in 2000 to $1.3 billion in 2001. New to the list are Equals Three Communications, SWG&M Advertising Inc., J. Curtis & Co., and Footsteps L.L.C.

A TIME OF SHAKE-UP AT THE TOP

It's a time of opportunity in the midst of chaos. Toyota came under fire for a promotional postcard featuring the smiling mouth of an African American with a gold tooth applique in the shape of its RAV4 sports utility vehicle. They then hired the 2002 BE 100s Advertising Agency of the Year, Burrell Communications Group L.L.C. (No. 3 on the BE ADVERTISING AGENCY list with $181.6 million in billings)--Toyota's first African American agency of record--to help them stave off a Reverend Jesse Jackson boycott and share in part of the $50 million earmarked for African American and Hispanic advertising.

Burrell was named general market agency for Verizon. The Chicago-based firm also won the General Mills account, a former Don Coleman Advertising Inc. account estimated to be worth $15 million to $20 million annually. Meanwhile, Don Coleman Advertising Inc. (No. 1 on the BE ADVERTISING AGENCY list with $330 million in billings) reorganized in April under the new name GlobalHue. The Southfield, Michigan, firm acquired Hispanic firm Montemayor & Asociados of San Antonio in Spring 2002 for an undisclosed amount and is searching for an Asian partner. It also opened a Los Angeles office this Spring.

As of press time, Chrysler had put out some feelers to find a replacement for GlobalHue's Don Coleman Advertising, but not before catching flack over its commercials, done by PentaMark Worldwide, which featured dark haired, bronze skinned actors who were indiscernibly black, white, or Hispanic. Consider this a glimpse of things to come as more advertisers seek to "diversify" their ads with ethnically "neutral" models. "Clearly, Chrysler is not in tune with what's going on," says Smikle in response to Chrysler's multicultural advertising executive's defense of the commercials in a December 18, 2001 Wall Street Journal article. "[Chrysler] has gone from being one of the most sensitive marketers to African American consumers to one that describes its campaign as `neutral.'"

GlobalHue also spun off two of its public relations and research operating units, Ntouch Communications Group and Nsights Worldwide, respectively, and they will service both GlobalHue and outside business as well. The agency will also expand Kmart's "The Stuff of Life" campaign with advertising featuring Chaka Khan, BeBe Winans, and Joe Feliciano. Kmart's spending on multicultural advertising was estimated by AdAge.com to be about $25 million in 2001. Coleman says that the retailer will be in a much better position in the wake of filing bankruptcy with its failing stores now closed. With many Kmart stores located in the suburbs, urban area stores will gain increased focus and the urban consumer will benefit. SpikeDDB (No. 10 on the BE ADVERTISING AGENCY list with $25 million in billings) handled the retailer's general market advertising.