Massacre On Madison Avenue

In the toughest year everfor advertising firms, African American agencies struggled to hold on to business and meet the bottom line

comparing the top 15 advertising agencies this year to the top 15 agencies from last year. Therefore, billings for the top 15 agencies on the BE ADVERTISING AGENCIES list rose by 5.89% from $1.28 billion in 2001 to $1.35 billion in 2002. New to the list is Prime Access Inc. (No. 10, with $27 million in billings) while Images USA (No. 12, with $24.5 million in billings) returned.

Black advertising agencies are facing competition from every angle. True, a black Los Angeles-based boutique agency, launched last July with Nissan as its first client, came under fire for a billboard ad for the carmaker. The ad featured the words “Black History Month” with the word history crossed out and replaced with future. Also under the microscope is New York-based PASS. The agency unsuccessfully tried to win the Chrysler account; they failed to prove black ownership to the NMSDC.

African American ad agencies must now contend with the exodus of “urban” ad dollars, some $400 billion, to the Hispanic market. “Because there is some institutional bias as it relates to African American consumers, the Latino market is going to be given more dollars until [companies] figure out that the market is so fragmented, it would be more cost effective to concentrate their dollars in the African American market,” says Greg Head, president of HEADFIRST Market Research in Stone Mountain, Georgia.

Regardless of the victimization they may feel, black ad agencies must take a proactive stance. There are an exceptional few that are looking to strategically tap into multiple markets — Latino, Asian, Gay and Lesbian, and urban youth — such as Equals Three Communications in Bethesda, Maryland (No. 6 on the BE ADVERTISING AGENCIES list with $80 million in billings) and GlobalHue in Southfield, Michigan (No. 1 on the BE ADVERTISING AGENCIES list with $350 million in billings).

Eight years ago, SWG&M in El Paso, Texas (No. 8 on the BE ADVERTISING AGENCIES list with $36 million in billings) made its mark on Southwest Texas when it turned two nonprofit hospitals into one for-profit medical facility — SPHN Hospitals. But it was the Sprint Alamosa PCS business that helped generate the 44% increase in business last year. The company began growing into major markets outside of Texas, from Louisiana to Oregon, and SWG&M was there every step of the way, billing in some 80 mid-level markets. The agency focuses on general and Hispanic markets and has business with three unnamed Fortune 500 companies on the horizon. It is also looking to expand beyond its Austin and El Paso offices to possibly Cincinnati or Seattle. Last year, they secured the account for Louis Raphael, a San Francisco retailer. SWG&M president and CEO Robert V. Wingo says that if he can make it in El Paso, he can make it anywhere.

MERGE OR PURGE?

In the late 1990s, the major ad agencies began to gobble up smaller agencies, becoming strategic holding companies. The few conglomerates at the top control much of the market share. Chicago-based Burrell Communications Group L.L.C. (2001 BE Advertising

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