Now that black is in, are black agencies out? The African American market surges, but black agencies battle mainstream shops for the opportunity to deliver their message

Black Enterprise, June, 2004 by Cassandra Hayes

Whether it's the halftime show at the Super Bowl or the entry of words like bling-bling into the mainstream, it's quite apparent that hip-hop's urban influence exudes from almost every fiber of the American experience. Advertising helps solidify the integration of black style, music, and language into American popular culture, However, black ad agencies--even in a promising economic environment--may have to fight for opportunities to cultivate and deliver the message.

As focus on the ethnic market increased, African American-owned ad agencies continued to compete with general-market rivals for a controlling stake in the urban market. Recent 2000 census data revealed that people of color will make up more than 50% of the U.S. population by 2050. Last year, in an increasing trend, some black-owned agencies formed strategic partnerships with general-market shops to target brass ring accounts. Smaller independents gleaned new business and defined themselves as the industry's new area of growth.

In 2003, advertising breathed a sigh of relief after several years of sluggish U.S. economic growth, albeit with a fingers-crossed sense of fragility. General-market agencies grappled with new corporate media policies and advertising budget audits, while seeking innovative ways to grab a moment of response generating consumer attention in an age of TiVo, iPod, and everything wireless.

Advertising spending increased by 6.5% in 2003 to $155 billion, according to Universal McCann's Insider's Report. That number is projected to keep pace as the Summer Olympics and presidential campaigns chip away at the ad-spending recession. According to the Minority Media & Telecom Council, roughly 1% of total ad spending is targeted to minority consumers, of which black ad agencies shared 30%. Billings for the top 15 agencies on the BE ADVERTISING AGENCIES list rose by 14.55% from $1.35 billion in 2002 to $1.55 billion in 2003. New to the list is Compas Inc. (No. 5 on the BE ADVERTISING AGENCIES list with $140 million in billings), while the Chisholm-Mingo Group Inc., and J. Curtis & Co. dropped off the list.

LEADERS BUILDING BENCH STRENGTH

It was an exceptional year for Carol H. Williams Advertising (No. 2 on the BE ADVERTISING AGENCIES list with $300 million in billings). With new offices in New York, Detroit, and Chicago, Williams' self-titled agency became the first black agency of record for Washington Mutual Inc. Industry insiders say the business will help catapult the Oakland, California based agency to the top of the list of black-owned agencies. "We increased our regional business with General Motors and became the agency of record for several Procter & Gamble brands," says Williams. According to Automotive News, GMC partnered with Carol H. Williams to develop edgier advertising for its Yukon XL. The company's other new clients include Cingular and McNeil Pharmaceuticals' St. Joseph Aspirin brand. Grey Advertising will partner with Carol H. Williams to execute P&G's expanded minority marketing initiatives.

UniWorld Group Inc. (No. 4 on the BE ADVERTISING AGENCIES list with $183 million in billings), down from last year's $233 million, entered into a business relationship with Earvin "Magic" Johnson as spokesperson for the Lincoln Navigator, and placed the SUV in an upcoming movie with Cedric The Entertainer. The agency's Burger King commercials featuring Steve Harvey ranked No. 3 in consumer appeal according to a recent Ad Age/Intermedia Advertising Group Quarterly Ad Recall Report.

COMPETITION REMAIN STIFF WHILE ACCOUNTS SHIFT

Many corporations still prefer to partner with general-market agencies to deliver hip-hop-infused messages to the masses, while relegating minority-owned agencies to creative help and advertising for ethnic media in efforts to attract multicultural consumers. "Very few companies are comfortable with the reality that African Americans drive a multitude of trends beyond fashion and music in the general-market," says Greg Head, president of HEADFIRST Market Research in Stone Mountain, Georgia.

However. Robert J, Dale, president and CEO of Chicago-based R.J. Dale Advertising & Public Relations (No. 14 on the BE ADVERTISING AGENCIES list with $26.4 million in billings), notes there are a few companies "redirecting their general-market agencies to partner with African American agencies from the start, rather than developing general campaigns and plugging the black segment into it. That is one trend that is going to change the face of advertising over the next 10 years."

Williams made news when after a year, she resigned a deal with Bank of America, citing "philosophical differences and disagreement on how to market effectively to the African American community." Others in a dizzying square dance include Kmart, a onetime client of GlobalHue (No. 1 on the BE ADVERTISING AGENCIES list with $325 million in billings), who sided with Carol H. Williams, and GlobalHue's acquisition of the Microsoft business once held by UniWorld. Spike DDB (No. 8 on the BE ADVERTISING AGENCIES list with $45 million in billings) picked up the Pepsi account formerly with UniWorld, and Nationwide Insurance Co. changed hands from Burrell (No. 3 on the BE ADVERTISING AGENCIES list with $190 million in billings) to Atlanta-based Matlock Advertising & Public Relations (No. 10 on the BE ADVERTISING AGENCIES list with $38 million in billings). "No company leaves a black agency and goes into a vacuum. Typically, they go directly to another agency," says Ken Smikle, president of the research firm Target Market News in Chicago. "If they don't, they give up market share that's hard to regain."