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

Agency of the Year and No. 3 on the BE ADVERTISING AGENCIES list with $181 million in billings) was the first to merge with Publicis. Then Don Coleman Advertising (now GlobalHue) merged with True North (which was later bought by Interpublic), followed by New York’s UniWorld Group Inc., which merged with JWT (which was later bought by WPP Group). Was it worth it? Byron Lewis, chairman and CEO of UniWorld Group (No. 2 on the BE ADVERTISING AGENCIES list with $232.98 million in billings) in New York City, says that the 49% stake that WPP Group has in his agency has been an “excellent relationship.”

But that sentiment may not be the same across the board. “When I partnered with True North, it was the perfect situation. The chairman [David Bell] understood that collaboration between the agencies was essential to do good business. That kind of leadership needs to be there for success,” says Don Coleman, president of GlobalHue. According to AdAge.com, GlobalHue is in talks with Interpublic to buy itself out of the holding company. Coleman declined to elaborate, only saying, “It’s a sensitive scenario.”

“Sensitive” may be an understatement. “Several black ad agencies that have merged have been hamstrung,” says Head. “I don’t think [things] worked out to be in their best interest. They might say they got all they expected out of the deal but, in actuality, the deal might have limited them.” For example, with so many agencies under one roof, there’s the potential for conflicts of interest if a sister company has an account in the same category. On the contrary, independent agencies have more a
utonomy and can bid on a new category.

This is not limited to African American agencies, but to all those within the holding company. “It’s a matter of what kind of assurances the agency can offer a client,” Gardner says. Those African American agencies aligned with conglomerates are also at a critical point in their agreements, where they’re being assessed for meeting goals and returns on investment, as their sister agencies compete for the same ad dollars.

Despite the growing pains of these mergers, many African American agencies, such as Equals Three Communications and SWG&M, continue to be approached by mass-market agencies to examine the possibilities.

SURVIVING THE GAME

Some agencies more than survived, they thrived. Carol H. Williams Advertising (CHWA) in Oakland, California (No. 4 on the BE ADVERTISING AGENCIES list with $130 million in billings), acquired the Bank of America account, after it was withdrawn from UniWorld Group, in an effort to align its business more closely with Interpublic, its new general market agency. This came on the heels of Bank of America increasing their multicultural ad budget from $10 million in 2001 to more than $40 million in 2002. CHWA handles several Interpublic clients, including General Motors Corp. It also picked up Federal Express.

GlobalHue had a 6.1% increase in billings and held on to its DaimlerChrysler business after the Chrysler Group put its estimated $40 million multicultural advertising account into review. In

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