B.E. 100s On the Right Track.

Samuel Chisholm keeps his agency rolling with bold campaigns and a strategic focus that can't be derailed

THE CHISHOLM-MINGO GROUP'S ADVERTISING CAMPAIGN, "Census 2000. This is our future. Don't leave it blank," was somewhat prophetic. Just as it was for millions of Americans, 2000 was a year of accountability for Chisholm-Mingo--a critical time when the company would have to stand up and be counted in order to secure its financial fortunes over the next 10 years. Chisholm-Mingo (No. 4 on the BE ADVERTISING AGENCY list with $104.6 million in billings) would stand up a number of times in 2000, positioning itself for a future that has little chance of being left blank.

Chisholm-Mingo stood up to pressures in the advertising industry that persuaded UniWorld Group Inc. Chairman Byron E. Lewis to sell 49% of his firm to London-based communications giant WPP Group Plc. last year as "a matter of survival." In fact, of the top four African American-owned advertising agencies, Chisholm-Mingo is the only one to resist the urge to merge and remains 100% black-owned.

Chisholm-Mingo also stood up to its competition, capturing several historic accounts that should have a major impact on its ability to attract future business. It was one of five advertising firms to share $103 million in the first-ever paid U.S. Census advertising campaign. "The Census was one of the larger government contracts," says Heide Gardner, vice president of the American Advertising Federation (AAF). "It was a fascinating case study because most of the media dollars went to multicultural media." About 60% of the placements were targeted to "populations most unlikely to file" (minorities).

The company also won groundbreaking multicultural marketing contracts with Royal Caribbean International and Amtrak. With a stronger foothold in the travel industry, expanding within the niche is next on its agenda.

And there are other expansion plans as well. Chisholm-Mingo continues to cultivate its crisis management and public relations arm. The goal is to provide clients with additional high-quality services that will contribute significantly to the company's bottom line. The success of this division of the firm, called Chisholm-Mingo Plus, is what chairman and CEO Samuel Chisholm believes may determine how long his firm can spar with the competition and remain totally black-owned.

"We understand our competition has now changed," says Chisholm, who has led the ad agency since 1990. "We are no longer competing with UniWorld (No. 2 on the BE ADVERTISING AGENCIES list with $245.8 million in billings), it's WPP; not Don Coleman, but True North," he says, referring to the merger between Don Coleman Advertising (DCA) (No. 1 on the BE ADVERTISING AGENCIES list with $270 million in billings) with True North Communications in September of 1999.

Each time the competition has stiffened, industry conditions worsened, or misfortune reared its ugly head, Chisholm has found a way to pilot his advertising agency into calmer waters. For the innovative thinking, resourcefulness, perseverance, and groundbreaking achievements that allowed the agency to not only survive at a time when black-owned firms are merging with majority-owned competitors but demonstrate significant growth, Chisholm-Mingo has won the distinction of being named the BLACK ENTERPRISE Advertising Agency of the Year.

MILLENNIUM MILESTONES

The highlight of 2000 for the Chisholm-Mingo Group was unquestionably Census 2000. The company handled the African American marketing of the campaign as a subcontractor to Young & Rubicam, helping to produce historic numbers. Census return rates had been falling by nearly 10% every decennial census, but last year the return rate rose by nearly a point to 66%. The 66% rate was five points above the Census Bureau's goal. Former Census Bureau Director Kenneth Prewitt said return rates from difficult-to-reach populations (mainly minorities) were much closer to the general population's rates than ever before.

"Never before has the country had such a response. We were able to make a contribution to our society," Chisholm says, praising the census and all it means to the betterment of the African American community.

"Being a part of the U.S. Census was huge for Chisholm-Mingo," says Gardner. "It was one of the best case studies because it far exceeded its goals, and the impact it had on the African American community made it a larger deal beyond the business sense."

It was a "larger deal" because it gave Sam Chisholm a national stage to show how his minority firm's innovative nature could benefit the entire country. In 1999, Chisholm testified in front of the U.S. House of Representatives to get approval for his adjustment to the national campaign. Young & Rubicam had developed the census message: "This is your future. Don't leave it blank." In an attempt to reach the heart of black people, Chisholm and his team tweaked the phrase and rolled the campaign out to the African American community as "This is our future. Don't leave it blank." The higher return rates from minority communities proved the soundness of that adjustment.

But the opportunity to contribute a community service wasn't all Chisholm received from his participation in the census effort. Although Chisholm won't divulge exactly how much of the $103 million the government paid to implement the campaign his firm netted, it has strengthened his ability to attract more government contracts in the future.

Landing travel accounts with Royal Caribbean International, a cruise liner operator, and Amtrak was another monument for Chisholm-Mingo. Royal Caribbean selected the group to handle its strategic, creative, and media planning to expand its multicultural marketing efforts. Amtrak selected the agency to handle its multicultural efforts in reaching out to growing minority markets.

"Travel has been a tough nut to crack," says AAF's Gardner. "It took [the industry] a long time to look seriously at the African American market."

Ken Smikle, president of Target Market News, a Chicago-based market research firm, points out that it makes sense for black-owned firms to receive a fair share of advertising dollars in several travel-related areas, including cruise liners, airlines, and hotels, where African Americans have consistently spent more than $2.1 billion annually since 1997. "Black income has grown at an unprecedented rate, and industries are capitalizing on that with aggressive marketing strategies," says Smikle.

Amtrak also felt a need to be more aggressive toward minority communities, and chose Chisholm-Mingo to show it how. In a prepared statement, the company explained its choice: "Chisholm-Mingo was selected after a rigorous review process due to their significant strengths in numerous areas, including outstanding insight into individual ethnic groups ... and proven experience in developing local `grassroots' campaigns."

Both companies were also aware of Chisholm-Mingo's track record in the travel industry. The firm has handled campaigns for Greyhound and Disney Tourism successfully over the years. Word of their expertise in this area is beginning to spread. "We approach the market different from any of our competitors in that we know how to segment this market into six distinct groups," explains Chisholm. "Then we know who we are talking to and how to talk to them."

THE CHISHOLM-MINGO GROUP
Year Founded: 1977

       Billings   Staff

1996     $54.2     40
1997     $73.7     43
1998     $78.0     48
1999    $100.5     65
2000    $104.6     65

Billings in millions of dollars. Prepared by B.E. Research

Note: Table made from a bar graph.

LEAVE THE CRISIS TO US

Chisholm says the agency has had to transform itself since being founded in 1977. "The consumer and the advertising environment has changed a lot from the way it was in the `70s," he says. The company has grown into more than just an agency that creates ads. It now supplies clients with full-service marketing, which includes helping them rebound from a crisis.

In addition to its traditional advertising operation, the agency has Chisholm-Mingo Plus, a public relations and crisis management firm, CMG Consulting, which trains top executives on race relations issues, and CMG Account Planning and Research. These three divisions currently account for 10% of the company's business. The hope is to see them account for 30% of all revenues in the near future.

The public relations and crisis management arm has an excellent chance to attract additional revenue. Since landing the Denny's account in 1996 after the restaurant chain was sued for race discrimination toward its customers, Chisholm-Mingo has sharpened its skills on one of the most difficult cases of negative publicity in the past 25 years.

"Denny's was continuously getting bad marks, and the general market was continuously fueling the problem," says Chisholm. The company developed a crisis management program that included running a series of positive commercials during the Sunday morning talk shows where gatekeepers and opinion leaders appear; holding strategic press conferences announcing Denny's community involvement; and completing "The Denny's Book"--everything anyone might want to know about Denny's commitment to fighting racial discrimination. "We just got tired of telling the story over and over again," says Chisholm. "And how do you stop the conversations? You close the book."

Chisholm-Mingo's handling of the Denny's account helped it win accounts with Texaco in 1998 and Amtrak last year, when both were faced with discrimination lawsuits filed by employees. "They seek us out because of our reputation," says Chisholm. "We have a proven track record with crisis management and we are proud of that ability to serve those clients."

RESISTING THE MERGE

Sam Chisholm joined the Chisholm-Mingo Group in 1980 (when it was known as Mingo Jones Advertising) as a vice president and managing supervisor. Twenty years later, he insists that he never planned to stay at the firm long-term, much less own it. Chisholm's actions suggest a different story.

When company founder Frank Mingo died suddenly in 1989 at the age of 49, Chisholm was thrust into the leadership role at the firm. He became CEO in 1990, and ran the firm with an exuberance akin to its founders. The company's philosophy is "to reach the head, we touch the heart." The principles it uses to get there include good account service, expanding client services, and insight into and "passion for our clients."

With all this passion in the firm's philosophy, it's no wonder Chisholm has fought hard to keep the firm black owned. However, he confesses that "I consider it everyday. I don't think we'd be smart business people if we didn't." Chisholm says the agency often gets calls from suitors, but so far no deals have seemed worth pursuing.

"Sam has espoused some very strong convictions about holding on to minority equity," says Gardner. "We will have to see what happens because mergers and strategic alliances do make good business sense." Indeed. Since he has headed the firm, Chisholm-Mingo has added the Denny's, Texaco, U.S. Census, and other major accounts, increasing its revenues by 50% since losing its signature account with Miller Brewing Co. five years ago. All indications are that Chisholm-Mingo will not only stand up to market forces and competition but will also stand the test of time.

"How and what we do is different from our counterparts, because we're more problem solvers and decision makers than just makers of ads," says Chisholm. And that makes all the difference in the world.

Financial Services Summaries

2001 TOP 25 BANKS                    1999         2000   % CHANGE

NUMBER OF EMPLOYEES                 2,049        2,078     1.42%
ASSETS(*)                      $4,022.637   $4,093.379     1.76
CAPITAL(*)                        306.611       329.96     7.62
DEPOSITS(*)                     3,207.492    3,326.175     0.87
LOANS(*)                        2,344.385    2,547.275     8.65

2001 TOP 10 INSURANCE
COMPANIES                            1999         2000   % CHANGE

NUMBER OF EMPLOYEES                 1,493        1,361    -8.84%
ASSETS(*)                        $622.650     $654.072     5.05
STATUTORY RESERVES(*)             438.468      429.664    -2.01
INSURANCE IN FORCE(*)          20,706.458    23,624.12    14.09
PREMIUM INCOME(*)                 131.648      160.029    21.56
NET INVESTMENT INCOME(*)           35.723       35.648    -0.21

2001 TOP 15 INVESTMENT BANKS         1999         2000   % CHANGE

NUMBER OF EMPLOYEES                   473          491     3.81%
TOTAL ISSUES(**)                 $257.157     $394.379    53.36%

(*) In millions of dollars, to the nearest thousand.
As of December 31, 2000 Prepared by B.E. Research. Reviewed by
Mitchell & Titus L.L.P.

(**) In billions of dollars, to the nearest million.