A Report Prepared by the Civil Rights Forum on Communications Policy
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Being No. 1
Is Not Enough:

The Impact of Advertising Practices On Minority-
Owned & Minority-Formatted Broadcast Stations

Kofi Asiedu Ofori
Principal Investigator    

submitted to the
Office of Communications Business Opportunities
Federal Communications Commission

Washington, D.C.

All Rights Reserved
to the Civil Rights Forum on Communications Policy
a project of the Tides Center


As part of its mandate to identify and eliminate market entry barriers for small businesses under Section 257 of the Telecommunications Act of 1996, the Federal Communications Commission chartered this study to investigate practices in the advertising industry that pose potential barriers to competition in the broadcast marketplace. The study focuses on practices called "no Urban/Spanish dictates" (i.e. the practice of not advertising on stations that target programming to ethnic/racial minorities) and "minority discounts" (i.e. the practice of paying minority-formatted radio stations less than what is paid to general market stations with comparable audience size). The study consists of a qualitative and a quantitative analysis of these practices.

Based upon comparisons of nationwide data, the study indicates that stations that target programming to minority listeners are unable to earn as much revenue per listener as stations that air general market programming. The quantitative analysis also suggests that minority-owned radio stations earn less revenues per listener than majority broadcasters that own a comparable number of stations nationwide.

These disparities in advertising performance may be attributed to a variety of factors including economic efficiencies derived from common ownership, assessments of listener income and spending patterns, or ethnic/racial stereotypes that influence the media buying process. As a preliminary investigation, it was beyond the scope of this study to determine in quantitative terms the degree to which each of these factors may explain these disparities. Further statistical research should be undertaken to find the answer to this question. Anecdotal data collected by the study suggest that in certain instances, the media buying process is guided by ethnic/racial stereotyping, underestimations of disposable income, the desire to control product image, unfounded fears of pilferage, etc. Factors such as these form part of the basis for "no Urban/Spanish dictates"and "minority discounts" as practiced by advertisers and/or ad agencies.

As preliminary findings, the anecdotal and quantitative evidence suggests that certain practices in the advertising industry undermine marketplace competition and First Amendment principles favoring diversity of viewpoint. The study recommends further research that is sufficiently funded to fully examine these preliminary findings. The study also recommends that the federal government, based upon subsequent research and public comment, develop a policy statement on advertising practices and issue an executive order prohibiting federal agencies from contracting with ad agencies that engage in unfair or discriminatory advertising practices. With regard to the private sector, broadcasters, advertisers, and ad agencies should adopt a voluntary code of conduct that prohibits "no Urban/Spanish dictates"and "minority discounts" and that promotes a broad and diverse range of programming for all Americans.

Key words: advertising and discrimination; advertising and minorities; advertising and minority radio programming; small business competition and radio advertising.

Study Highlights


A. An analysis based upon 1996 data for 3,745 radio stations indicated that:

B. Minority radio broadcasters responding to the study survey provided the following estimates of the magnitude and impact of "no Urban/Spanish dictates" and "minority discounts:"



Comparison of Minority and Major Broadcasters by Format

(All figures are averages. Currrency in thousands)
(Number of Stations) '96 Nat Rev # Nat. Stat. '96 Stat. Rev. Power Ratio
General Formats $129,059 42.5 $2,202 1.16
Majority Owned - All (3293) $130,497 43 $2,214 1.16
Majority Owned - Small (2,288) $13,040 7.4 $1,410 1.16
Minority Owned - All (39) $7,630 7.4 $1,237 0.85

Minority Targeted Formats $86,125 26.3 $1,958 0.91
Majority Owned - All (297) $116,574 34.8 $2,052 0.95
Majority Owned - Small (193) $7,387 4.9 $1,038 0.99
Minority Owned - All (116) $8,164 4.4 $1,717 0.82

Source:     "When Being No. 1 Is Not Enough: The Impact of Advertising
Practices On Minority-Owned & Minority-Formatted Broadcast Stations." (page 79)
Civil Rights Forum on Communications Policy.