American Advertising Federation Responds to FCC Study Into Advertising and Minority Media Buying Practices "It is time to acknowledge the problem," says AAF President and CEO.

American Advertising Federation Responds to FCC Study Into Advertising and Minority Media Buying Practices

"It is time to acknowledge the problem," says AAF President and CEO.

For Immediate Release Contact: Marjorie Valin (202) 371-2306
After business hours: (410) 772-8880

WASHINGTON, DC, January 13, 1999—The American Advertising Federation (AAF) today announced it would convene a blue-ribbon task force of advertisers, agencies, and media companies to look at ways to promote equity in media buying and selling, including the feasibility of a voluntary code of conduct.

A study released today by the Federal Communications Commission (FCC) indicates radio stations that target minority listeners earn less advertising revenue per listener than stations that air general market programming. The report attributes the disparities to a variety of factors including economic efficiencies resulting from common ownership, assessments of listener income and spending patterns, and ethnic and racial stereotypes that influence the media buying process. It recommended further research to explain the inequities.

"The FCC report is a blessing in disguise if it helps us accelerate the pace of progress," said AAF President and CEO Wally Snyder. "The report shows there are problems we need to overcome in the way advertising is bought and sold. We’re asking the industry to look closely at its advertising practices and see where the incongruities lie."

"The issues are many and complex. There are underlying business issues in the way media is bought and sold and how niche audiences are measured versus the general market. But flaws in the process do not excuse outdated stereotypes and business myopia. It is our aim to see that advertising takes full advantage of what multicultural Americans have to offer—as consumers, professionals, and providers of advertising services."

AAF has several initiatives underway to increase diversity and multicultural marketing:

On February 22 in New York, AAF will convene a meeting with FCC Chairman William Kennard, Rep. Robert Menendez (D-NJ), Rep. Carolyn

Cheeks Kilpatrick (D-MI), and major advertisers, agencies, and media companies—minority and mainstream—that will increase the pace and investment in multicultural marketing and workplace diversity.

That same week AAF once again will bring the most promising minority advertising students to Madison Avenue to jump-start the hiring and recruitment of diverse candidates and increase the industry’s minority representation.
In April, AAF will release the results of a baseline survey co-sponsored by the Procter & Gamble Co. to gauge the extent of diversity and multicultural marketing in the advertising industry.

And later this year, the AAF will cosponsor a conference on multicultural marketing with a major packaged goods association.

"AAF has the unique capacity to bring everyone to the table to hammer out any flaws in the advertising process. We have the clients, the agencies, and the media. We have the resources and expertise to tap this multicultural gold mine. We’ve had an extensive workforce diversity program in place for years now that is slowly showing some results. We hope to look back in a few years and see how far we’ve come," said Snyder.

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AAF is the Unifying Voice for Advertising. We are the advocates of the rights of advertisers. We educate policy makers, the news media, and the general public on the value that advertising brings to the well-being of the nation, and we develop the nation's present and future leaders. With headquarters in Washington and a Western region office in San Francisco, we accomplish these goals through a unique nationally coordinated grassroots network of advertisers, agencies, media companies, 115 corporate members, 207 local advertising associations and 248 college chapters

Wally Snyder
President and CEO
American Advertising Federation

Statement at FCC Ad Study Announcement
January 13, 1999

Chairman Kennard, I appreciate your invitation to participate in this press briefing and to talk about solutions.

We look forward to continuing our partnership with the FCC as we work toward fulfilling AAF’s official policy mission, which is to "empower the advertising industry to capitalize on America’s changing demographic landscape."

Blanket policies like "no urban and no Spanish dictates" do a disservice to everyone involved, from the advertisers who lose sales opportunities to the consumers’ whose needs may be underserved. We urge advertisers and agencies to make decisions based on facts and not fiction. We urge them to value the contributions people of color can make to their bottom lines.

AAF represents the common interests of all sides of the industry – national advertisers, ad agencies, media companies, the individual small business that make up over 200 local advertising federations across the country and the young people who comprise the membership of our 248 college chapters.

It is our aim to see that advertising takes full advantage of what multicultural Americans have to offer – as valued consumers, professionals, as senior executives and as providers of advertising services.

As you know, AAF and our Foundation also have been working for some time with Representative Kilpatrick and Representative Robert Menendez to address the issues– beginning with their participation in advertising’s first Congressional Summit on Diversity that our Foundation hosted back in July. Their leadership in Congress will promote efforts to unite all industry segments with government regulators and policy makers in our common. (Representative Menendez sends his deepest regrets that he couldn’t join us today.)

We have been working with several minority owned ad agencies and media companies for several years, and we look forward to working with even more affected stakeholders – including my colleagues who so eloquently described their experience in this industry for us today.

As we have known and heard here today, there is a problem.

Let’s get on with solutions.

This report is an opportunity and not just a wakeup call. Companies that have not yet done so have a great incentive to take the time to review their practices and perceptions about who their customers are and will be. We’re helping them to do just that. For example, we are joining with Rev. Al Sharpton, New York State Sen. Efrain Gonzales and our sister associations, to convene Monday’s summit that will continue AAF’s plan to educate the industry about multicultural markets and media. I urge those invited decision-makers who don’t have major schedule conflicts to join us at the Waldorf-Astoria if at all possible.

AAF’s existing action plan includes initiatives like our third annual event to promote hiring and recruitment of pre-qualified graduating minority college seniors. This year’s program agenda for February 22 includes an award luncheon salute to our best and brightest candidates and a roundtable for CEOs and senior execs to discuss these and other issues – including federal government practices and opportunities for minority-owned agencies, newspapers and magazines. Our goal is to bring together the parties who can effect change. I’m delighted that Representatives Kilpatrick and Mendendez have committed to be with us, and Chairman Kennard also has graciously agreed to participate.

The report and other recent events demonstrate that it’s becoming more important for AAF to continue with our programs to increase workforce diversity and educate decision-makers about the opportunities in the multicultural marketplace.

Our diversity and multicultural marketing programs, which have evolved over the last decade, are designed to improve advertising’s track record in meeting some critical objectives:

Periodic measurement of advertising’s progress and performance over time

Increasing racial and ethnic diversity in our workforce

Educating corporate America on the issues and opportunities

Providing more networking opportunities for the exchange of information and ideas between national advertisers, minority-owned agencies and the full range of media companies that are owned by or formatted for minorities

Recognition as an incentive for companies and individuals that are making progress

We’ll be happy to provide more detail on all our programming at another time, but I want to focus on three important tactics we are already committed to:

Our Foundation is implementing a baseline study on workforce diversity and multicultural advertising practices, funded by a grant from Procter & Gamble, targeting Advertising Age’s 100 Largest Advertisers, Media Companies and Advertising Agencies in addition to AAF’s corporate members. This study will give us a benchmark on diversity throughout the ranks of the business, spending to target minority consumers and spending with minority agencies. We’re shooting to report the findings in April.

There’s another way to influence large numbers of advertising decision-makers, and that’s to influence large numbers of CEOs in industries that do a lot of advertising. We have an agreement to hold a summer conference for CEOs on multicultural markets with a major packaged goods association that will bring their corporate leadership together with minority media and agencies.

Our industry has plenty of room for improvement. But some companies do "get it" and their investments in minority media outlets and minority agencies are paying big dividends. We will continue to challenge ourselves to increase those numbers.

And to that end we will offer our commitment to convene a blue-ribbon panel, representing a cross-section of industry interests, who will examine the proposal for an industry code of conduct.