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BMW Excludes “Urban” Ad Markets, Highlighting Ad Industry’s History of Discrimination Issues

August 24, 2009 01:58 PM
by Jill Marcellus
A leaked e-mail from BMW’s advertising agency sparked outrage among minority broadcasters this month, reviving concerns about discrimination in the advertising world. Despite diversity initiatives and other industry efforts, how much has really changed from the “Mad Men” culture of the 1960s?

“No Urban Dictates”

Target Market News reports that when ad agency Palisades Media Group asked radio stations in Boston, Houston, Baltimore and Washington, D.C., for proposed pricing for BMW’s Mini Cooper ads, it issued a condition: “no combos or urban formats.”

Defined by The Washington Times as “a format that specializes in hip-hop and R&B and whose listeners and disc jockeys are often black,” “urban” radio has long struggled against advertisers’ policies of “no urban dictates,” or intentional exclusion of the “urban” format market that tends to attract an African-American audience. In 2004, sandwich chain Quiznos became embroiled in a similar controversy when it pulled ads from urban stations, and in 2007, the Federal Communications Commission (FCC) adopted an order to ban the practice. 

At the time of the FCC’s decision, according to Target Market News, the Minority Media and Telecommunications Council (MMTC) hoped that the “historic civil rights action” would “produce a 5-10% increase in revenue for Black and Spanish radio specialists.” Now, citing BMW’s behavior, the MMTC has called for a compliance officer to enforce the “no urban dictates” rule, Radio Ink Magazine reported.

Palisades CEO Roger Schaffner insisted that the BMW e-mail was “a single, isolated incident” and that they “have taken steps” to prevent it from happening again. This has not appeased the National Association of Black Owned Broadcasters, which wrote to the company that the incident “raises the uncomfortable specter of a corporate culture that condones discriminatory practices, or, at best, fails to recognize the need for a corporate effort to promote diversity in your advertising practices—and in attracting customers for your products.”

Background: Employment discrimination

While the American Movie Channel television series “Mad Men” has earned acclaim for faithfully capturing the 1960s ad world, the culture of discrimination that the television show portrays continues in some degree to the present. In 2006, the New York City Commission on Human Rights (NYCCHR) found that, with only 2 percent of top advertising executives African-American, “hiring of black workers had barely improved since an inquiry found similar problems 40 years ago,” The New York Times reported. In response, 16 ad agencies worked with the commission to create diversity targets, which produced mixed results.

The NAACP has steadily rebuked advertising agencies since 1963, when its earliest complaints over hiring discrimination yielded a full-page ad in The New York Times, in which the American Association of Advertising Agencies (4A’s) welcomed “All Bright Young Men and Women to Consider Advertising as a Career.”

That incident marks the beginning of the “Timeline of Historical Discrimination in Employment of African Americans” in advertising, created by the Madison Avenue Project, a collaboration launched earlier this year between the NAACP and civil rights law firm Mehri & Skalet. 

Committed to “ending racial discrimination in America’s advertising industry,” the Project addresses issues raised by its January 2009 report, which found that the “Black–White gap averages 38% larger in advertising than in the overall U.S. labor market” and that African-American college graduates earn 20 percent less than their white colleagues in advertising.

Specifically, the report insists, African Americans are “segregated into less powerful, lower-paid positions,” and excluded from influential creative departments, and from agencies focused on “general markets,” as opposed to “ethnic markets.” 

Opinion & Analysis: Industry barriers and solutions

While prominent people in advertising admit that there is a diversity problem, many insist that they are sincerely committed to overcoming entrenched problems in the industry.

Tiffany Warren, vice president at Arnold Worldwide, told USA Today that “the industry has worked hard to get ahead of the issue,” citing the importance of “diversity to reflect the consumers that we serve.” Warren founded the AdColor Awards last year to recognize multicultural talent. 

Trade association the 4A’s, meanwhile, has issued scholarships and partnered with Howard University to promote diversity at agencies. Adweek further reported that a “handful of ad agencies” have employed diversity officers to help “build a supportive culture within firms that, consciously or not, have not always supported people of color, and in so doing may be beginning to crack the glass ceiling.” 

Problems persist despite such initiatives. Robert Brown, a director at Carol H. Williams, cited word-of-mouth hiring practices as a major hurdle to diversity. Brown told Advertising Age, “It’s often: 'Call someone you know.’ In many cases, no one knows an African-American.”

Even when African-Americans are hired, Adweek reported, many leave the business quickly.  At the prominent ad firm IPG, turnover for minorities is 30 percent higher than for whites, an issue attributed partly to agency culture and partly to the industry’s low starting pay. Jason White of Wieden & Kennedy explained to Ad Age that, “A higher number of kids who are not minorities can live off of mom and dad for the first couple of years.”

Explanations and promises have not satisfied the Madison Avenue Project, whose Cyrus Mehri has successfully sued Coca-Cola and Texaco for discrimination in the past. Noting that “sporadic, poorly-designed government oversight over multiple decades has failed to provide that pressure” to change, the Project report concludes with a semi-veiled threat: one “promising approach is large-scale anti-discrimination litigation.”

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