Advertisers Are Slow to Focus on Black Media Despite Promises

(Bloomberg) -- Many of the biggest U.S. companies have pledged this year to increase their diversity efforts -- in their hiring, in their banking, in their management. But their ad spending could stand some scrutiny, too, especially on media outlets that are popular with African Americans.

Between 2011 and 2019, top advertisers increased their spending on Black-oriented media at roughly the rate of inflation, reaching $3.86 billion last year, according to a report on African-American consumers from Nielsen, the research company that compiles TV ratings. That amounted to just 2% of total U.S. ad spending of more than $200 billion.

The slow progress shows companies still have a long way to go with promises to take social responsibility more seriously, said Cheryl Grace, a senior vice president at Nielsen. The report highlights several reasons why African Americans should be attractive to advertisers -- from faster growth in incomes to greater use of smartphones.

“There are some companies that have done better across the board than others,” Grace said. “But there are other companies that we’re seeing a lot of social-media buzz from, but we’re not seeing their dollars reflected on that advocacy.”

Procter & Gamble Co. led the list in both years, with spending rising to $476 million in 2019. That’s an increase of 14% from 2011. The consumer-goods manufacturer is known for its public advocacy on race relations, including TV commercials that emphasize the need to end racism.

Not coincidentally, several of the top advertisers in African-American media are also among the biggest spenders overall. Procter & Gamble, Amazon.com Inc. and AT&T Inc. are among the largest overall advertisers in a ranking compiled by Ad Age. But not all fit that bill: Berkshire Hathaway Inc. placed second on the African American-focused media list and 15th for overall advertisers.

One shortcoming of the Nielsen analysis is that it looks only at ad spending in media where African-American consumers are the predominant audience. That leaves out, for example, all of the most-watched broadcast and cable networks, which have sizable Black audiences. Also, African Americans still have less buying power than the broader population.

Attractive Demographic

But the point of Nielsen’s report is to highlight why the Black demographic should be attractive to advertisers. Since 2010, the buying power of African-American consumers has increased 48%, more than the 43% for total U.S. population. Black consumers also spend more time, on average, watching live TV and using mobile phones -- which are both key opportunities to reach consumers.

Successful multicultural marketing goes beyond targeting consumers in a specific ethnic group, according to Kimberly Paige, chief marketing officer at ViacomCBS Inc.’s BET Network and a former Coca-Cola Co. executive.

Speaking at a virtual Ad Age town hall this week, Paige said companies should instead think about the bigger picture, “return on influence.” Whereas ad campaigns directed at one ethnicity put consumers in the “crosshairs,” an authentic, ongoing message that demonstrates good brand values would result in a greater impact.

“Our consumers are really demanding robust and sustained action,” Paige said. “Gone are the days when you can kind of sit on the fence on some of these issues. They want to know where you stand.”

Many companies are trying to do that. Diversity and inclusion initiatives, for example, have been popular themes on third-quarter earnings calls this month. And it’s not just consumer-product companies. They range from banking to manufactured goods, like Otis elevators.

Judith Marks, chief executive officer of Otis Worldwide Corp., discussed her company’s efforts this week said on a call with investors. During the quarter, she said, Otis “enlisted an outside diversity, equity and inclusion expert to independently assess our practices and provide recommendations to guide future decisions and programs.”

Making Progress

African Americans are making progress in other areas of the media, especially in front of the camera. Nielsen this year created an Inclusion Opportunity index to study the most popular programs on broadcast, cable and streaming.

“The good news is that reality, news/weather and drama do deliver representation for Black men relative to their representation in the U.S. population,” Nielsen said. “But Black women are far from parity across the board, coming close to it in only one genre: drama.”

One indication that corporate efforts to change are working is that ad agencies report their clients are demanding better representation. Tiffany Edwards, global head of diversity and inclusion at Droga5, said at the town hall that it’s no longer possible to satisfy client expectations by simply hosting or sponsoring diversity events.

“Organizations in 2021 that are not taking this mandate seriously from their clients, making it a priority in-house,” Edwards said, “are going to end up being behind the curve.”

©2020 Bloomberg L.P.