Battling to Bounce Back

After a tough year in the advertising game, could a shake-up be ahead among African American agencies?

first national African American TV commercial.

Coleman’s GlobalHue continues its reign at the top of the list, having gained 17% after landing the African American portion of Wal-Mart’s $580 million marketing campaign. The agency also exercised organic growth with its clients Chrysler and Verizon Wireless. Other agencies followed suit. For example, Equals Three Communications (No. 15 on the BE ADVERTISING AGENCIES list with $43 million in billings) expanded its healthcare portfolio with current client the National Institute of Mental Health by adding two new accounts: the American Association of Geriatric Psychiatry and the Geriatric Mental Health Foundation.

Time for a turnaround?
The question on the minds of many within this space is: Is there really light at the end of the tunnel? Or could black ad shops be headed for even tougher times? “There has been little new business for black ad agencies because there are just not enough companies that are doing targeted programs to African American consumers because [advertisers] don’t think that those programs will be significant in their ROI,” says Ken Smikle, president of Target Market News, a Chicago-based firm that monitors African American marketing and media.

Consider also that while overall spending may be up a bit, media spending has generally been flat, according to Lisa Sanders of Advertising Age. “And there was no growth in print ad spending from newspapers in the United States and less growth from magazines because of a decline in readership. People are getting their information from other sources such as the Internet,” she says. The Nielsen report confirms this, noting that while ad spending in national magazines rose 3.9% and national newspapers gained 2.9%, Internet spending spiked 35%.

“If your agency is focused toward doing one thing that there is not as much demand for anymore and suddenly you find that your clients are asking you to create advertisements for other types of media, you’re going to have to change your talent pool and your expertise,” Sanders says. “If you’ve been structured to create largely TV, radio, and print, and the money is shifting out of those media to other areas, and you don’t have that expertise, then you may find your revenue declining.”

For the black ad agency, already receiving only a fraction of the ad dollars doled out to general-market firms, this shift in media spending has translated into fewer opportunities. In fact, some black ad shops have taken on less lucrative assignments in public relations and events marketing to keep business coming in. R.J. Dale Advertising & Public Relations (No. 14 on the BE ADVERTISING AGENCIES list with $44.5 million in billings) was retained by independent publishing house Third World Press to create a marketing campaign for Tavis Smiley’s book The Covenant with Black America ($12).

The end result for black ad agencies has been modest gains marked by–in some cases–painful losses. After 14 years of delivering creative for Wal-Mart, E. Morris Communications (No. 11 on the BE ADVERTISING AGENCIES list with $56.2 million in billings) lost the account following a major shake-up

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