Advertiser commits to spending with black-owned media: progress report

  • Major advertisers have vowed to spend more with black-owned media in the wake of Black Lives Matter protests.
  • McDonald’s, Verizon and other advertisers say they have made progress toward these goals.
  • Here are the challenges they still face and how they could level the playing field.

Many advertisers have pledged to increase their spending with black-owned businesses and media companies following the 2020 killings of George Floyd, Breonna Taylor and other black Americans.

Companies such as GM, McDonald’s and Verizon now say they have made progress towards these goals, although in interviews marketers and agency executives have acknowledged the difficulties.

“We understand that there are several challenges on the brand and agency side,” said Tony Wells, Verizon’s chief media officer. “We engage with Black owned and operated media entities with the goal of understanding that they face challenges in growing and scaling their business.”

Some black media executives have expressed skepticism about their efforts. Some see the promises as performative acts by companies facing public pressure and threats of legal action from The Weather Channel CEO Byron Allen, who sued McDonald’s and threatened to sue others. brands and agencies.

“Madison Avenue is the epitome of what institutionalized racism looks like,” Allen said. “They spend about $270 billion a year on advertising, and barely a dime goes to black-owned media.”

Black media companies have a scale challenge

Companies like Verizon and WPP’s GroupM have pledged to allocate 2% of their total budgets to black-owned outlets, which some black media executives say is nowhere near enough.

“2% is still a low figure when black people make up 14% of the population and 50% of the influence,” said Revolt TV CEO Detavio Samuels.

Yet many black-owned media properties lack the scale required by major advertisers, making some of those promises unrealistic, said Lynnwood Bibbens, CEO and co-founder of ReachTV.

Companies owned by black executives and other people of color make up just 1.5% to 2% of the media market, said Marla Kaplowitz, CEO of the 4A’s advertising agency business group. “It’s a matter of supply and demand.”

Advertisers would have to spend large sums with a small number of media companies to deliver on their promises, but a brand can only run so many ads before it ends up showing the same ad to the same person again. and again, according to the argument. For this reason, some agencies have advised their clients to avoid promises of specific expenses, said an industry leader who spoke on condition of anonymity. Many black-owned media companies, being small, also lack the digital infrastructure to sell programmatic ads and measure campaign performance.

Horizon Media chief investment officer David Campanelli said the agency has asked clients, including Geico and Capital One, to focus on long-term investments in black-owned media.

“Our goal was to show meaningful change…not just grab the headlines,” he said.

Revolt TV’s Samuels said an uneven playing field demands a different approach to advertising and called on them to consider what he calls “cultural impact buys”.

“If you’re trying to attack a problem with the same tools that have always worked, but never worked for that problem, then you’re probably not going to solve it,” Samuels said.

For example, in a new “Shark Tank” style show that Revolt helped create for Target, the brand also considered the PR value of things like rapper T-Pain promoting the show on social media, Samuels said.

The “Black Media Investment” Debate

Many advertisers pledging to spend more on black-owned media disqualifies many properties popular with black audiences.

Some argue that these advertisers should also consider black-operated and black-targeted businesses, such as Viacom-owned BET Network and Discovery-owned Oprah Winfrey Networks. The reasoning is that the investment ultimately goes to the black community.

“It’s not one or the other when you’re talking about black ownership and exploitation, and sometimes the market can pit them against each other,” Oprah Winfrey Network president Tina Perry said. , during a November 2021 Paley Center panel, adding that the company has spent “hundreds of millions of dollars” with black-owned businesses.

Others like Travis Montaque, co-founder of black-owned media collective Group Black, argue that focusing on black-owned businesses is what would ultimately help the black community.

“When you only advertise targeted to black people, you make money from the black-targeted audience and that money goes to non-black-owned businesses,” he said. “Investing in black-owned properties is important because it puts money back into those communities.”

Brands say they are making progress, but the gains are uneven

Dozens of brands made spending commitments and some provided updates.

Verizon’s Tony Wells said the company exceeded its April 2021 commitment to invest $25 million in black-owned and operated media by 11%.

A McDonald’s spokeswoman said the chain exceeded its first-year benchmarks, without specifying them, in its plan to increase investments in diversely-owned media companies to 10% of its advertising budget. by 4% by 2024, with black-owned businesses accounting for half of that total. The channel recently launched an annual summit for various media owners and signed multi-year deals with Pod Digital Media and Hispanic company NGL Media.

P&G has launched efforts like “Widen the Screen” to fund the work of black creators and has formed a new partnership with the Black Owned Media Equity and Sustainability Institute to help emerging black-owned media groups, a spokeswoman says .

Deborah Wahl, CMO of General Motors, said she changed some of GM’s contract terms to help minority media owners, such as reducing payment terms to 30 days.

Some black-owned media companies have reaped the rewards. Revolt TV, which is backed by rapper Sean “Diddy” Combs, said its business more than doubled in 2021 thanks to promises from advertisers and added 75 new customers, including AT&T, Cadillac and PepsiCo.

But the gains have not been uniform. Gary Coichy, founder of Pod Digital Media and former media agency executive, said most advertisers who entered into talks with his company following their promises didn’t end up spending with him, exception of Coca-Cola, PepsiCo and McDonald’s.

“It’s mainly a dog and pony show. They say, ‘Excellent information, we’ll get back to you later when we send out tenders.’ Then you don’t hear anything,” he said.

Black media executives call for bigger steps

Many critics see the disparity in ad spending as an extension of age-old racial inequalities and say advertiser promises won’t go far as long as the industry remains predominantly white.

“When it comes to decision makers, the people holding the purse strings tend to be a homogenous group made up mostly of white males,” Oprah Winfrey Network’s Perry said during the Paley Center panel. “The social, racial and economic injustices that we face in this country did not start two years ago. And the problems that we face in the media ecosystem did not start then no more. It’s going to take time.”

Some black media executives believe advertisers should commit to steps such as investing in long-term sponsorships and projects and granting shorter payment terms that will help black-owned businesses grow. their infrastructure and scale.

“Martin Luther King said, ‘It’s cruel to tell a man to get up by his boots, and he doesn’t even have a pair of boots,'” Allen said. “If white American companies really want to solve the problem, they need to stop saying, ‘give me rating guarantees like your white counterparts.'”

Spending more with black businesses is in the interests of advertisers — it will help them better understand and reach their audiences, said ReachTV’s Bibbens.

“Black culture drives pop culture, and pop culture drives global GDP,” Bibbens said. “I’m still confused as to why people don’t jump on it [opportunity].”

But it’s also incumbent on black-owned businesses like his to use the money they receive to better serve the needs of advertisers, Samuels said.

“We also have a responsibility to these advertisers to take that money, invest it, and build the scale so that when they try to get the 3% next year, the inventory is there.” he declared.

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