Dogfight On Madison Avenue

Advertising firms zero in on new niches while they battle mainstream firms for accounts

Forget the days of yore when black-owned advertising agencies just targeted the African American audience and the general market Goliaths took care of the rest. The line in the sand has disappeared, as last year marked a volatile time in the advertising industry for black-owned agencies that fought gallantly to hold their ground.

Since we reinstated our annual black enterprise ranking of black ad agencies last year, much has happened. As African American-owned agencies continued to face steep competition from mainstream conglomerates for black advertising dollars, a few emerged battle scarred, while others remained on an even keel and still others had their best year ever.

Those at the top entertained lucrative buyout offers or opportunities to form strategic alliances with their general market brethren.

Perhaps the most monumental event is the federal government’s eagle-eyed focus on the pittance of advertising dollars that, for years, has trickled down to the black media and the agencies that serve them. Should the White House intervene, it could mean an infusion of well-deserved capital for black agencies that were long cheated, and new rules to ensure that they continue to get their fair share. Nonetheless, the cadre, 20 strong, must continue to change with the times and diversify their services to survive.

"The future of African American advertising agencies is as clear as a blank piece of paper," states Ken Smikle, president of Target Market News, a Chicago-based marketing research firm that tracks black consumers. "In the past, creating advertising targeted to the black consumer was always a predictable business. However, as companies continue to see the value of this market, the entire industry is being turned on its head. Possible buyouts, untested joint ventures and the ever-changing media landscape have made the future anything but predictable."

According to the American Association of Advertising Agencies (AAAA), a robust economy, Internet advertising and increased ad spending by telecommunications and computer companies prompted a 7% increase in overall U.S. advertising spending for 1998. Of the $160 billion spent marketing to consumers, only $1.1 billion was targeted to the black market, with less than 30% of that going to African American agencies, according to Target Market News.

Overall, 1998 billings for agencies on the be advertising agencies list rose by 11.5%, from $795.2 million in 1997 to $886.5 million. While there was a loss of media-buying capability due to a reduction in black-oriented television programming, that loss was offset by an 8%-15% increase in overall ad revenues, which may have helped to boost black agency revenue bottom lines. New to the agencies list is Crawley Haskins & Rogers Public Relations and Advertising of Philadelphia (No. 18 on the be advertising agencies list, with $5.4 million in billings). Absent from this year’s list is Visions USA Inc., an Atlanta-based firm with $3.8 million in billings.

PEOPLE ARE TALKING
"In chaos, there’s opportunity," says Smikle. "The question is for whom." For years, general market agencies

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