Study Finds Racial Bias in Advertising Industry

“Madison Avenue is afraid of the dark,” Nat King Cole said about the advertising industry in 1957 after he abandoned his eponymously named television show. Despite the show’s success, no advertisers were willing give national sponsorship to the first show hosted by a black man.

A new study released yesterday by the Madison Avenue Project, a partnership between the NAACP and civil rights law firm Mehri & Skalet P.L.L.C., addresses racial disparities that continue to exist in the advertising industry. (Madison Avenue and the ad industry have been synonymous since the explosive growth in the New York City street in the 1920s.)

The study found that compared with the overall labor market, the racial pay gap in advertising is more than twice as large as it was 30 years ago– evidence Cyrus Mehri says is proof that things have not changed much since Cole’s show.

“Forty-five years after the passage of the civil rights act of 1964, they are still a closed society. They are an industry where favoritism rules the day and merit is cast aside,” says Mehri, founding partner of Mehri & Skalet. Mehri has served as co-lead class counsel in some of the largest and most significant race and gender cases in history.

Among other issues, “Research Perspectives on Race and Employment in the Advertising Industry” measures the pay gap between whites and blacks and addresses what can be done to rectify the problem. The study, conducted by Bendick and Egan Economic Consultants, found that the black—white gap averages 38% larger in advertising than in the overall U.S. labor market. Additionally, blacks with the same qualifications would need to be paid 25% more to earn the same as whites.

Urging inclusion

“We are going to call on all of the clients and companies that rely on the multibillion- dollar advertising industry to take a really good and hard look at the facts surrounding African American employment and to join the Madison Avenue Project in seeking change,” said Angela Ciccolo, interim general counsel/secretary to the NAACP.

In order to even the playing field in this $31 billion a year industry, leading global advertising companies such as Omnicon, WPP, Interpublic, and Publicis would need to triple the employment of black managers and professionals, which, at the present rate, will not occur for another 71 years, according to the study.

“Madison Avenue erected a semi-apartheid marketing system in America,” says Sanford Moore, a radio personality on Kiss-FM, who worked for both general market agencies and minority-owned agencies for more than 40 years. “The industry wants to terrorize the financial situation [of black media, whether magazine or radio] by discounting the importance of black consumers.”

The study suggests that public oversight and pressure from advertising agencies’ client firms could also be a promising source to influence advertising agencies to decrease the employment, promotion, and pay gap.

Earl G. Graves Jr., president and CEO of Earl G. Graves Publishing, which publishes Black Enterprise magazine and BlackEnterprise.com, and an outspoken opponent of the industry, contends that mainstream ad agencies have been operating under the radar for years. “If you look at a General Electric, American Express, or General Motors, they are constantly being scrutinized by their actions and how they do in terms of hiring and minority procurement. They don’t scrutinize the people who work for them,” Graves says.

Bendick and Egan assert that the fundamental problem of mainstream advertising agencies is a persistent unwillingness to hire, assign, advance, and retain available black talent. Additionally, about 16% of large establishments in the industry employ no black managers or professionals, a rate 60% higher than in the overall labor market, according to the study.

“Most of these clients have chief diversity officers and diversity programs, yet they continuously do business with these agencies that have no black people or have black people in junior positions,” says Eugene

Morris, CEO of E. Morris Communications Inc., No. 15 on the BE 100s 2008 list of black-owned advertising agencies.”The only way the industry is going to change is if the clients themselves take the lead and force the agencies to change.” Morris, who did not see the report, but offered to speak about the industry in general, and Moore both believe that the clients not only fail to scrutinize general market ad agencies but they neglect minority-owned ad agencies as well.

Shedding light on the black-out

The study suggests that solving the problem will require mainstream agencies to avoid stereotyping, reform human resources practices, and eliminate obsolete market segmentation assumptions that racial minorities lack skills applicable to non-ethnic markets. Public oversight and pressure from advertising agencies’ client firms could also be a promising source to influence advertising agencies to decrease the employment, promotion, and pay gap.

Nancy Hill, CEO of the American Association of Advertising Agencies trade association, believes that the industry has done a lot to try and move this along. “But certainly they are not doing it consistently or fast enough and I think it is unfortunate that it has come to this. We certainly have not done a good job of creating an environment where they would want to stay,” says

Hill, who is also the chief diversity officer at AAAA. “It has to come from the top down. Commitment to diversity has to visibly come from the CEO. It has to be a big commitment; not just lip service,” says Hill who also believes that sometimes promotions at ad agencies have nothing to do with skin color, but is simply a case of being the “right person at the right time.”

Graves counters that idea and suggests that when you don’t have a diverse group making decisions on promotions, then everything seems OK. “You can’t have 12 white guys sitting in a room making the decisions on what are the best ways to reach a worldwide market,” Graves says.

To help blacks surmount the barriers they face getting hired as management in the ad industry and make the transition from other industries, the AAAA recently made a $250,000 commitment last spring to the John H. Johnson School of Communications at Howard University. The donation establish the Center of Excellence in Advertising, a program designed to attract middle to senior management alumni from any historically black college and university. The program will also provide $250,000 every year for four years as long as the center is able to obtain matching contributions.