26 Jan Advertisers made big pledges to help Black-owned media. Black executives say their efforts fall short: ‘a dog and pony show.’
By Tanya Dua and Patrick Coffee
Many advertisers pledged to increase their spending with Black-owned businesses and media companies following the 2020 murders of George Floyd, Breonna Taylor, and other Black Americans.
Companies including GM, McDonald’s, and Verizon now say they’ve made progress toward those goals, although in interviews, marketers and agency leaders acknowledged challenges.
“We understand that there are several challenges that exist on the brand and agency side,” said Verizon Chief Media Officer Tony Wells. “We engage with Black-owned and operated media entities through a lens of understanding that they face issues building and scaling their business.”
Some Black media executives expressed skepticism about their efforts. Some view such pledges 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 other brands and agencies.
“Madison Avenue is the very epitome of what institutionalized racism looks like,” Allen said. “They spend approximately $270 billion a year on advertising, and barely one penny is going to Black-owned media.”
Black media companies have a scale challenge
Companies like Verizon and WPP’s GroupM promised to allocate 2% of their total budgets to Black-owned outlets, which some Black media execs argue is far from enough.
“2% is still small when Black people are 14% of the population and 50% of the influence,” said Revolt TV CEO Detavio Samuels.
Still, many Black-owned media properties don’t have the scale required by big advertisers, which makes some of these pledges unrealistic, said ReachTV CEO and co-founder Lynnwood Bibbens.
Companies owned by Black execs and other people of color make up only 1.5% to 2% of the media marketplace, said Marla Kaplowitz, CEO of ad agency trade group 4A’s. “It’s a demand and supply issue.”
Advertisers would have to spend large amounts with a small number of media companies to fulfill their pledges, but a brand can only run so many ads before they end up showing the same person the same ad over and over, the argument goes. For this reason, some agencies have advised clients to avoid specific spending pledges, said an industry leader who requested anonymity. Many Black-owned media companies, being small, also lack the digital infrastructure to sell ads programmatically and measure campaign performance.
Horizon Media Chief Investment Officer David Campanelli said the agency told its clients, which include Geico and Capital One, to focus on long-term investments in Black-owned media.
“Our goal was to show a meaningful change… not to just get a headline,” he said.
Revolt TV’s Samuels said an unequal playing field demands a different approach to advertising and called for them to consider what he terms “cultural impact buys.”
“If you try to attack a problem with the same tools that have always worked, but have never worked for that problem, then you’re probably not going to fix 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 debate over ‘Black media investment’
Many advertiser pledges to spend more in Black-owned media disqualifies many properties popular with Black audiences.
Some argue these advertisers should consider Black-operated and Black-targeted companies as well, like Viacom-owned network BET and Discovery-owned Oprah Winfrey Networks. The rationale is that the investment ultimately flows to the Black community.
“It’s not either/or when you talk about Black-owned and Black-operated, and sometimes the marketplace can kind of pit them against each other,” Oprah Winfrey Network president Tina Perry said at a November 2021 Paley Center panel, adding that the company 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 companies is what would ultimately help the Black community.
“When you are only doing Black-targeted advertising, then you are making money off of Black-targeted audiences and that money is going to non-Black owned businesses,” he said. “Investing in Black-owned is important, because that is putting money back into those communities.”
Brands say they’re making progress, but gains have been uneven
Dozens of brands made spending commitments, and some have provided updates.
Tony Wells of Verizon said the company has exceeded its April 2021 pledge to invest $25 million in Black-owned-and-operated media by 11%.
A McDonald’s spokeswoman said the chain has surpassed its first-year benchmarks, without specifying them, in its plan to boost investment in diverse-owned media companies to 10% of its ad budget from 4% by 2024, with Black-owned companies accounting for half of that total. The chain recently launched an annual summit for diverse media owners and signed multi-year deals with Pod Digital Media and Hispanic-owned NGL Media.
P&G has launched efforts like “Widen the Screen” to fund Black creators’ work and formed a new partnership with the Black Owned Media Equity and Sustainability Institute to help emerging Black-owned media groups, according to a spokeswoman.
General Motors CMO Deborah Wahl has said she changed some of GM’s contractual terms to help minority media owners, such as reducing payment periods to 30 days.
Some Black-owned media companies have reaped the rewards. Revolt TV, which is backed by rapper Sean “Diddy” Combs, said that its business more than doubled in 2021 because of advertiser pledges and that it added 75 new clients, including AT&T, Cadillac and PepsiCo.
But the gains have not been uniform. Pod Digital Media founder and former media agency exec Gary Coichy said most advertisers that initiated talks with his company following their pledges didn’t end up spending with him, with exceptions like Coca-Cola, PepsiCo, and McDonald’s.
“It’s mostly a dog and pony show. They say, ‘Great info, we’ll get back to you later when we send out RFPs.’ Then we don’t hear anything,” he said.
Black media execs call for bigger steps
Many critics see the disparity in ad spend as an extension of centuries-old racial inequalities, and argue that advertiser pledges won’t go far as long as the industry remains overwhelmingly white.
“When it comes to decision-makers, the people who hold the purse strings tend to be a homogenous group of most often white males,” Oprah Winfrey Network’s Perry said during the Paley Center panel. “The social, racial, and economic injustices we’re dealing with in this country did not start two years ago. And the issues we’re dealing with in the media ecosystem did not start then, either. It’s going to take time.”
Some Black media execs believe advertisers should commit to steps like investing in sponsorships and long-term projects and granting shorter payment terms that will help Black-owned companies grow their infrastructure and scale.
“Martin Luther King said: ‘It is cruel to say to a man to pull himself up by his bootstraps, and he doesn’t even have a pair of boots,'” said Allen. “If white corporate America really wants to fix the problem, they need to stop saying, ‘give me ratings guarantees like your white counterparts.'”
Spending more with Black companies is in advertisers’ self-interest — it’ll help them understand and reach their audience better, ReachTV’s Bibbens said.
“Black culture drives pop culture, and pop culture drives global GDP,” Bibbens said. “I’m always confused about why people aren’t jumping at this [opportunity].”
But it’s also incumbent on Black-owned companies like his to use the money they receive to better meet advertisers’ needs, Samuels said.
“We also have a responsibility to those advertisers to take that money, invest, and build the scale, so that when they’re trying to get the 3% next year, the inventory exists,” he said.
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