ED GORDON, host:
From NPR News, this is NEWS AND NOTES. I'm Ed Gordon.
For over two years, the New York City Human Rights Commission has been investigating advertising agencies minority hiring practices. Yesterday, in New York City, I moderated an event hosted by Black Enterprise Magazine about the lack of diversity in the ad industry and how it effects African-Americans. After the event, two members of the symposium panel spoke with me.
Alan Pugh, Executive Vice President of the advertising agency GlobalHue, one of the largest minority-owned ad agencies in the country. And Ken Smikle, Founder and President of Target Market News, which tracks advertising marketing and media targeted to black consumers. Smikle says people shouldn't underestimate the impact of money spent on black advertising and media.
Mr. KEN SMIKLE (Founder and President, Target Market News): I think that people only have that reaction, when they don't have the total picture. I mean, if you give people information about how these advertising budgets impact virtually all of the media that we consume and, by extension, how well we do in so many other areas of life; because, if we don't have vitality in black media, we can't have vitality in a black community.
Mr. SMIKLE: It's how we communicate with each other. It's how we sell to one another. So I think that it has more to do with the fact that folks don't know how the dollars and cents issues play out and how they impact them everyday.
GORDON: We are not talking about peanuts here; it is projected in 2010 this will be about a $900 billion industry.
Mr. SMIKLE: That's right, and at this point, we're not even talking about one half of one percent of it flowing through either African-American agencies or through African-American media. So imagine if we could get closer to a level playing field. If we could just move in that direction, the impact could be enormous, in terms of what media outlets could do to better inform African-Americans about political, social and economic issues, and what they could do in terms of hiring, what they could do in terms of acquisitions and growth.
We are talking about really when folks say the last plantation, it's that the advertising industry is the last one to step up to the plate and act as good corporate citizens. The banking industry is there, the auto industry is there; this is really the last one to make the change, but this change will change everything.
GORDON: We also should note how powerful this is, in the sense of and I -during the symposium talked about Gil Scott Herons words of, those who control their image, control their world. This is what we're talking about to a great degree.
Mr. SMIKLE: Exactly, and we're beyond just the idea of getting accurate imagery and accurate information about the African-American community. Now, we're talking about commerce. Who's trying to sell to us? Not just major corporations, but other African-American-owned businesses. If there is not a vital black media, there is no way to sell products and goods to African-Americans. So, it's got to effect everything in a way where we will all benefit.
GORDON: Alan Pugh, one of the interesting points in all of this is there is a sense, many say, of arrogance. We are now seeing subpoenas come forward, we're seeing legislation being put forth, lawsuits being talked about. Talk to me about the environment that you, as someone who is on the frontlines, have dealt with over the last decade or so.
Mr. ALAN PUGH (Executive Vice President, GlobalHue): Well, you know it's, you hear a lot about us as African-American business people having to present the business case. They get it, they understand that when you talk about the year 2010 that it's going to be a $965 billion company. You know, when you look at African-American as a gross national product of a nation, we would be in the top ten of all nations worldwide. So the business case is there, what we have to focus on then is how do we become more equitable and get our piece of that pie. Because, right now, we're giving it away; or it's being taken away.
GORDON: So what are corporations not seeing? All across the board, this should be an industry or a segment of society that industries would want to woo. Why isn't it happening?
Mr. PUGH: In the past decade, they have been able to see that growth; and it's happened very quickly. And because they haven't invested during that time, they've gotten it for free. So they're standing back and saying, if I'm not forced to invest, then why should I, because I am already getting it now.
GORDON: Ken Smikle, talk to be about the annual report you do that looks at the consumer buying power of African-Americans and why it hasn't translated to be able to leverage that buying power into real power not only by virtue of the consumer end, but being able to say to corporations, we will not stand for this.
Mr. SMIKLE: Well, every year we do a report called the Buying Power of Black America, and the trends in that report have been remarkably consistent over the 13 years that we've done it. We've over indexed, meaning that we spend greater than our proportion in the population on consumer electronics, on food items, on apparel items, on the everyday things that create margin for corporate America.
What I would put out is a warning is that the great interest in the Hispanic market is going to wane at some point; because they will have spent all they can spend; they will have divided up all of the share that can be divided. And, as is always the question in corporate America, what next will be on the table? So I think we need to be in a position to tell businesses that this is where you need to look; this is where you need to invest more; this is where opportunity continues to grow.
GORDON: Yet, there is a sense from corporations - not just in the last 10 years, but quite frankly for a long, long time - of taking the African-American consumer for granted, because they know that whether we advertise with black corporations, with black media or not, you're going to be in the store, you're going to be in the auto dealership; you're going to be wherever, spending your hard earned cash.
Mr. SMIKLE: Yeah, but I think what will change is the idea that even though we are buying a particular category of products at a disproportionate rate, the question now becomes, are we buying your particular product at that rate? Because we have a situation now where a number of companies are competing. There has been no company in America that sells consumer products and services that has become number one without developing an African-American marketing program; none, zero, never.
Now, if you want you to be number one, that's says a lot of about how you get there. It's a reality that businesses can't afford to ignore and think there are alternatives to.
GORDON: Yet, Alan Pugh, it seems as though the industry is going backwards. We're seeing general market agencies - and let's get away from the colloquialisms - white agencies, who now have incorporated black divisions within their companies; therefore, in many companies minds, making black ad agencies obsolete.
Mr. PUGH: Yeah, you're absolutely right. I always talk about follow the money. Because the issue - and the reason why you find that general market agencies are going in that direction, because this growth over the last 10 to 15 years, we've proven the business case. Because if there weren't income involved and there weren't net gains to be gained, general marketing agencies wouldn't want anything to do with it.
So they know that this is a viable market; they know that the client, if he's not investing today, he is going to have to invest sometime soon. Because, as the minority becomes the majority, they are going to have to change their ways if they want their businesses and their products to sell to these consumers.
GORDON: We saw on the panel today a Councilman Larry Seabrook, of New York City, and Reverend Al Sharpton. Suggesting that - and we've already seen the Councilman move forward with subpoenas going out now through a two-year investigation through the New York Human Rights Commission of the advertising world, looking at the practices of hiring and division of labor and payment.
GORDON: But we also see the idea of Reverend Sharpton and others try to galvanize around this movement. How optimistic, Ken, should we be about this?
Mr. SMIKLE: I think we should be very optimistic, because in the history of change in the African-American community legislation of some kind has always been at the core of that change. I mean, if we were to take, for example, the enormous change that has happened in financial service industry in the last 15 years, 20 years; all of that change came about because of the Community Reinvestment Act, and because that required banks to demonstrate that they were reinvesting dollars in communities where they were located.
It became something that banks used to market to those communities and be competitive. I think if we can get to the point where ad agencies had to demonstrate to clients and then demonstrate to consumers that they were providing the kind of opportunities, diversity policies and action that are required of good corporate citizens in the 21st century, everything, would then begin to change.
GORDON: We should also note that is really is not about the segment of corporate America that says were advertising and marketing. This is about the mindset of corporate America, period.
Mr. SMIKLE: Absolutely. It's a reflection on our society. When you talk about you know, getting it free, or getting it cheap without having to invest. American today has issues. I mean, racism still exist today, bigotry still exists today, and so you find those same things still in corporate - in America. They are not understanding, you know, who we are as a society, and who are as a community. And they don't want to get to kind of know that; because, if they did, they would want to make relevant messages targeted to us, by people who are engaged in that community, and that go off and try to create some illusion while still trying to collect the dollars.
GORDON: And, Alan, finally, the idea of the effect of it, how does it effect you going back to the imagery of African-Americans? We know often how the majority community sees African-Americans, and you can see it often played in -even from, truth me told, even from minority-owned companies; the imagery of the brother in McDonalds singing for his menu et cetera, et cetera.
GORDON: But this is part and parcel of what we talk about, the ability for an African-American who may understand we've gone a little bit too far to pull back on some of this.
Mr. PUGH: Yeah, I think that when we talk about relevant messaging, we have to be very careful. Because there are agencies that don't really take that to heart and understand, you know, what they're projecting, what that does within the community. We have to be careful and we have to project positive images, and real images; I mean, images of who we are.
I mean, we're all not rappers, many of us have professional careers. Many of us are stay-home moms. You know, we do things that everybody else in the society does, we just do them uniquely different sometimes within our communities. But we're hard working people who do things that reflect the positive ness versus the negatitveness that sometimes comes out of our community.
GORDON: That was Alan Pugh, Executive Vice President of the advertising agency GlobalHue. And Ken Smikle, Founder and President of Target Market News. Transcript provided by NPR, Copyright NPR.