Dogfight On Madison Avenue

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

their predecessors leaves a bad taste in some mouths. "If they were more active in the coalitions, supported targeted advertising and were more sensitive to the issues facing us all in this tough business, there would be greater acceptance," says Jeff Cullers, president of Vince Cullers Advertising (No. 13 on the be advertising agencies list). The Chicago-based agency had 1998 billings of $16 million and, this year, teamed up with black-owned P.R. Networks in Detroit to form Vince Cullers Detroit. Their clients include Pizza Hut, Amoco, the U.S. Treasury, the Chicago White Sox and Ameritech New Media.

What began as an internal memo at Katz Radio Corp. in New York has become a hot topic in Washington. The Clinton administration is pressing Madison Avenue to voluntarily adopt a code of conduct to insure that ethnic media outlets and agencies get fair consideration when advertising dollars are spent — or run the risk of federal scrutiny.

The administration’s efforts were prompted after the Federal Communications Commission released a study in January that found revenues of radio stations with majority black and Hispanic listeners lagged significantly behind those of mainstream stations. This study came on the heels of last summer’s public release of the infamous "no urban dictate" memo, circulated by a Katz employee, warning advertisers not to use radio stations with majority black and Hispanic listeners. Katz, a New York-based subsidiary of Chancellor Radio Corp. of Dallas, secured advertising for radio stations. The document instructed sales representatives to steer companies away from purchasing advertising on ethnic-oriented stations, noting that "advertisers should want prospects, not suspects."

The event also turned the head of the Rev. Al Sharpton, who mobilized a Madison Avenue initiative and in January held a CEO roundtable in New York to address the issues. The AAF also took a leading role in educating government about the issues. AAF agreed to form a business practices and review committee to examine issues of fairness and the feasibility of an industry code of conduct. That committee will report through AAF’s standing board task force on multicultural advertising co-chaired by Thomas Burrell and Edward Erhardt, vice president and publisher of Advertising Age, to work with the government. "This attention will dramatically change the business climate for black advertising agencies. But it will take the support from CEOs [of the client] to make a difference," says Byron Lewis of Uniworld.

Some take a more cautious viewpoint. "There is a lot of noise. While this heightens attention, a proposed code is not going to fly," says O. Burtch Drake, president and CEO of the AAAA in New York. "It will be neither feasible nor helpful, because private advertisers don’t like being dictated to about what and where they should buy." Even without wholehearted cooperation from the private sector, the effect on black-owned media outlets and advertising agencies can be profound with government regulation, since the federal government — which includes agencies such as the U.S. Postal

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