Adweek published a provocative perspective from Hybrid Theory North America President Don Moore, who argues that Black-owned advertising agencies can experience true equality in Adland by regaining media buying power—a revenue-generating responsibility that got pulled when White holding companies seized the cake and left Black shops with crumbs.
Moore rightly explains how White holding companies acquire Black firms via the 49 Percent Solution, whereby the acquired enterprises retain their minority-owned status by maintaining a 51% stake.
So, White holding companies are minority owners—literally and figuratively—yet they snatch the lucrative media duties. That is, the corporations with a 49% cut receive the majority portion of marketing budgets.
It’s clearly another textbook indicator of systemic racism.
Black-Owned Advertising Agencies Need Their Buying Power Back
Creative and media planning must be brought under one roof
By Don Moore
In the recent wake of widespread—and exceedingly public—declarations of progress on the diversity, equity and inclusion front, there are people in the media ecosystem questioning if Black-owned advertising agencies are still needed in 2022.
As someone who knows firsthand the value of culturally relevant content and media, I can tell you without hesitation that Black-owned advertising agencies are vital to the advertising industry and more necessary than ever. Black-owned agencies invented the concept of specialty advertising, and now that advancements in digital have brought us into a world of intricate targeting, we need their experience and expertise more than ever. The question for today is this: What do Black-owned agencies need to survive and thrive?
51% wasn’t enough
For many Black-owned agencies, questions of survival were largely settled around the millennium. That is when President Clinton—prompted by the FCC’s discovery of the “no urban dictates” practices that were rife within corporate America—signed an executive order mandating that the federal government offer more procurement opportunities to minority contractors, with language directly pertaining to the advertising industry. It was during this period that the 49 Percent Solution was born: Small minority agencies kept their majority interest and entered into a 51-49 ownership structure with a major holding company.
It all sounded great at the onset. Working in “collaboration” with one of the HoCo’s general market agency brands, Black-owned firms embraced their role as a special markets agency. Through this “collaboration,” holding companies would secure meaningful inroads to America’s Black consumer market, and the Black-owned agencies would get access to global brands.
And yes, “collaboration” is in quotes because collaboration never happened. No business arrangement worth having can be deciphered with simple math. Fifty-one percent may sound like controlling interest, but when it came to media buying in the early 2000s, staffing and infrastructure trumped equity interest.
Due to economies of scale, media buying was immediately pulled into the general market agency, leaving the Black-owned firms with strategy and creative. And while creative may be king, it never had the power to get all parties in the room, and on the same page, the way planning and buying did. The loss of buying created a power vacuum that had the general market agencies poaching staff to declare themselves “diverse,” encroaching on other parts of the account, employing the term “one-stop shopping” ad nauseam and eventually giving birth to the Total Market Model—the ultimate failure of which is a different story for a different day.
The 49 Percent Solution was ultimately a lifeline in many ways. But lifelines are there for a moment, not a lifetime. And when people regain their strength, it’s vital that they assert their power.
Another Black media renaissance
Getting back to the question of what Black-owned agencies need to survive, the answer is simple: They need to reclaim the full media planning and buying power that was mandated to be sent up the chain to their large corporate partner.
Five years ago, this would have been nearly impossible. Bringing the media buying infrastructure back into a smaller agency, it could be argued, would ostensibly sacrifice too much in terms of efficiency and cost savings. But technology is bringing newfound agility to all sorts of disciplines, including advertising. Small agencies with limited infrastructure due to lower fees now have unprecedented options and opportunities to raise their audience creation and media buying game.
By leveraging their proprietary knowledge of one under-explored demographic, iconic Black-owned agencies such as Burrell and Uniworld essentially invented niche marketing and became a force on both Madison Avenue and Main Street. Creatively and strategically, the Black-owned agencies never lost their power—but in conversations with my mentor, Deborah Gray-Young, I’m reminded that the real power comes in the planning and buying.
Gray-Young had a front row seat to the emergence, greatness and eventual dilution of Black-owned agencies now referred to as “multicultural.” According to her, whether it was retail, QSR or automotive, Black-owned agencies in their heyday knew the brands as well as they knew their consumers—with creative and media planning and buying under one roof, they were able to put deals together that provided maximum value and unquestioned authenticity for the Black community at large.
This kind of synergy played a crucial role in keeping Black-owned media outlets alive and enabled us to learn about ourselves from ourselves on a national scale. We knew of people like Oprah and Obama long before they were household names. We didn’t need the mainstream media—we had Jet Magazine 24 years before Time-Life created People. And thanks to Black media leadership who were willing to bank on upstart cable channels, we now have BET, TV One and Bounce. The hope is that the technology today will enable Black-owned agencies to get their power back and help fuel another Black media renaissance.
For the last four decades, census data has been forecasting and documenting the browning of America. And for the last four decades, the marketers behind our leading brands have responded with reluctance, awkwardness and distance. While it’s true that society has made a great deal of progress since the days when Black people were invisible to major advertisers, it’s crucial for us to recognize that this one corner of the industry—one that was born from the prejudicial mentality that Black consumers weren’t viable—is more vital today than ever.
There’s a ton of programmatic ad dollars being wasted by marketers on niche audiences that they don’t even know. And when it comes to fully knowing a niche audience, the experts behind the Black-owned agencies wrote the book.
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