Sunday, January 6, 2008

Should Automakers Use Black-Owned Ad Agencies?

As many major automakers continue to use multicultural advertising companies to promote their vehicles, GM has made an unprecedented move. It recently announced plans to shift its advertising dollars away from the Los Angeles-based black-owned agency, Carol H. Williams, to mainstream agencies. It isn't clear if GM will retain the minority-owned company for its Chevy brand. Although GM seems to be phasing out Carol H. Willams, they're expected to retain the services of their Hispanic-owned advertising agency, Accentmarketing.

In a casual conversation I had with a non GM automotive executive in 2007 regarding his African American marketing programs, he was only able to articulate the companies' agenda for the Hispanic community. Based on our brief, but revealing conversation, the senior level executive really had no intentions on marketing their vehicles to the African American community. Like many in corporate America, the senior level executive knew he could still earn the business, without investing extra resources. Yet, his company wasn't ignoring the buying power of the emerging Hispanic market.

From my analysis and the comments of the executive, more companies - in and outside of the auto industry - seem to be focusing their advertising dollars on the "new minority group" - Hispanics. Advertising Age, a respected mainstream advertising trade magazine, has a link on their Web site, which specifically concentrates on how corporate America is advertising in the Hispanic community. Conversely, this same magazine has no link on their Web site, targeting the lucrative African American market.

Here are the fears many of the critics have of GM shifting its advertising format: Will GM continue to provide grass-roots marketing events targeted toward the urban market such as GM's Ultimate Family Reunion Experience event presented by Radio One last summer? Will GM continue to use highly qualified African American marketing experts? Will GM use African American vendors or companies to support their advertising or grass-roots events? Will GM increase, maintain or decrease their advertising, specifically geared toward the African American market? Will GM's new mainstream ad agency only focus on magazine and radio ads, targeting black consumers? Does GM plan on grouping black consumers with the rest of their mainstream ads? Why hasn't GM eliminated its Hispanic agency? Time will only tell if this plan will work or backfire on GM. Personally, I believe GM will retain a black-owned agency, avoiding a public relations nightmare.

Ironically, up until last May, GM's advertising budget was controlled by an African American. What are your thoughts? Does it really matter if GM uses a black-owned agency or a mainstream ad agency to promote their vehicles? See what one of GM's senior executives said about their reason for restructuring.


vmw said...

Thanks for addressing this issue. I think it is important for any component of commerce to pay attention to the needs of all demographic groups. It should not matter whether they are "emerging" or not. We all have significant dollars to spend and our needs should be addressed.

mlh010282 said...

Great issue to address. This is an unfortunate situation for the black-owned ad agency. Just because the hispanics are outnumbering the blacks does not mean that we stopped buying cars; nor does it mean that hispanics will buy more. GM needs to reevaluate it's minority advertising strategies.

Anonymous said...

I think this is a great question? When you ride around 285 who do you see behind the wheel of the new Denalis and Escalades? Now Mary J is singing about Chevrolets. If automakers want to keep get our money, they should be concerned with our brains as well as the talents. And as African Americans we should be careful not to go back to "grinning and shuffling" without doing our research.

Anonymous said...

Once again a major company is focusing on one group trying to capture "new money" instead of trying to maintain a relationship with those that have been faithful to them. It is unfortunate that GM is ending it's partnership with the black owned ad agency. It seems to me that they should be able to market to all groups without excluding anyone. Thanks for addressing this issue, get the word out.

Anonymous said...

I think that focusing on all minority groups more so than what they have done in the past is the only way to advertise.

atownzz said...

Where in the discussion is the thought that black-owned ad agencies should be positioning themselves better so they can capture more business for themselves? I understand the need for black agencies, because of their great track record in creating advertising that speaks to the black community. But maybe if they are able to broaden their niche (for example, minority car buyers under 30) they could sell themselves better to the companies looking for more effective advertising. In the end, it's all about money. If an ad campaign isn't making the company money, they're going to lose out. Having said that, consumers who care about this issue can always speak with their wallets, and shop elsewhere.

divineme said...

Thanks for spreading the word. African Americans consumer dollars fuel corporate America, however when we compete in the marketplace for business we are mostly reserved to the minority dollars even after being classfied main steam. I frankly am tired of the doubletalk from companies as it relates to "diversity" great images in pictures, howeve does not translate into business. Remember we can show our strength by how we choose to spend our dollars. We are more than the drive!!!!

weliz said...

It is no surprise that GM is focusing on the "new minority";however, to ignore the buying power of the African American community would be a huge mistake.

Rochelle said...

I agree with atownzz. Every advertising company -- black, white, green or blue -- should recognize that this is a multi-cultural society and be ready to target those communities.

Anyway, it will take a lot more than seeing folks like me in a GM ad to get me to buy one of their cars. They could have Denzel Washington and Delroy Lindo pull up to my house with a new Denali and I still wouldn't sign on the dotted line. The company still lags in reliability, design and resale value. Warm feelings about them targeting me for ads will not raise my Blue Book value or keep my car running.

As far as the whole black advertising issue, please read this article in the New York Times about the impact of Edward Boyd. It talks about his work with Pepsi to get African Americans in ads. The newspaper did a section on the passing of notable figures in 2007 and Mr. Boyd was one of them. Very insightful:

December 30, 2007
Consumed | Edward F. Boyd b. 1914
Sales Leader
Pepsi Ads

In the late 1940s and early 1950s, a certain unease could be detected about the American drift toward a culture of selling, marketing and consumerism. Even Fortune magazine opined in 1947 that “the American citizen lives in a state of siege from dawn till bedtime,” seeming to echo the sentiments raised in the best-selling novel “The Hucksters” and the celebrated play “Death of a Salesman.” One sales executive at the time, a man named Edward Boyd, later recalled leaving a performance of Arthur Miller’s famous play in tears. “I related to it,” he said. Even so, Boyd stuck with his job, possibly because his own role in the machinery of American selling was a bit more complex: He was a black man building an African-American sales force within the Pepsi-Cola Company when corporate America was anything but integrated.

Boyd was hired by Pepsi, which was based in New York, in 1947, when he was 33; he grew up in California and graduated from U.C.L.A. His story is a key element of the recent book “The Real Pepsi Challenge,” from which the above anecdote is taken and in which Stephanie Capparell argues that Boyd and those he hired helped break the color barrier in big business.

In the post-World War II economy, black Americans were still marginalized in two ways: in their access to better professional jobs and also as consumers. The latter point was not trivial, if you consider that lunch-counter sit-ins, lawsuits against hotels and other key tactics in the civil rights struggle were fundamentally about marketplace access. According to Capparell, “Unlike the mainstream media, the African-American press didn’t join the chorus of criticism of business.” Instead, black newspaper publishers informed the marketing trade about the untapped potential of black consumers. No doubt they wanted advertising dollars from the big companies that had previously ignored them, but the implicit message was that in a market-driven economy, consumer equality matters. Ebony went so far as to call the African-American embrace of the Cadillac, and G.M.’s supposed discomfort about that embrace, part of the “war for racial equality.” And indeed, part of what Boyd had to contend with was a perception that brands adopted by blacks might be rejected by whites.

Other companies were using black entertainers and athletes in ads, but Boyd wanted to move in a different direction, with a series of ads called “Leaders in Their Fields,” highlighting black professionals, including Ralph Bunche, the diplomat and winner of the Nobel Peace Prize in 1950. While these were clearly Pepsi ads, schools and universities ordered up copies. For store promotions, Capparell writes, “he wanted to show a black family in the same kind of idealized setting as those used in mainstream ads.” And while the “Leaders” campaign was extended twice, increasingly the African-Americans in Pepsi’s ads tended to be happy, young, bourgeois consumers, and inspirational copy gave way to more familiar (and banal) sales pitches: “So Much More Fun! So Much More Zest!”

His job was not easy: Boyd was thrown out of hotels and had to confront his white boss about using an offensive racial epithet. But from today’s perspective, what seems remarkable isn’t the pervasiveness of ignorance and racism but the degree to which these things trumped even the profit motive. Pepsi seemed enlightened by the mere act of openly courting black consumers. Its dominant rival, the Coca-Cola Company, did not advertise in the black press at all until 1951 — and its ads did not depict black faces until the mid-1950s.

Boyd’s career at Pepsi ended in 1951. In the years after a management change at the company, he and much of the team he assembled left. After stints at an ad agency, the humanitarian organization CARE and in consulting, he retired in 1981 and started raising alpacas upstate. Meanwhile, the commercial-culture “state of siege” that Fortune bemoaned 60 years ago never let up, though today the world depicted in mainstream advertising has become a harmonious place, where buddies of all races happily pursue consumer dreams together. In his comments to Capparell, Boyd seemed proud of his contribution. Perhaps the world depicted in advertising, then and now, was a fantasy, but part of Boyd’s thinking seems to be that it’s a fantasy that black consumers wanted to be part of — and would respond to.

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Anonymous said...

I don't actually put much into cars other than getting me from point a to point b. My whole attitude is that they are too over priced and don't appreciate in value. I think it is a crime that we spend more on cars that the average teacher makes in a year and I despise the fact that it is a financial drain just have a working car.

Anonymous said...

Interesting issue. I feel that if GM has been allocating advertising funds for African-Americans during the past years and sales are up; why not shift the marketing initiative to a market that needs more advertising dollars like the Hispanic market? More than likely African-Americans will not forget the strong initiative GM put forth in previous years and will continue to purchase the products. If the market is currently saturated with the African-American ads, I think that it is not necessarily a bad thing that they are shifting their dollars.

Anonymous said...

I do believe that Ad Men should advertise in black publications. It is their responsibility to market to All if they wish to receive sales from "Everyone." The product should be displayed where the buyer views/is.

Anonymous said...

I know that Blacks need to advertise with Blacks no matter what business you are in. This insures that we both grow together. I think it is unfortunate that a lot of black owned ad agencies are so expensive. They make it darn near impossible for small businesses to advertise. I think if they come up with special rates for small businesses, in return they would get more advertising in volume and at the same time the businesses would grow and so would their advertising budgets. Until this happens in the black community- we both will continue to be on the losing end.

Anonymous said...

Do we know why the agency was dropped? Where they producing quality ads? Good point someone mentioned in their response...Mary J is promoting the Chevy! I need more info regarding why!