Not just a black thing anymore.

African American ad agencies grab major, mainstream clients

Mike O'Driscoll has a point to make. As president of Jaguar North America, O'Driscoll knows that with 35,000 luxury cars sold in the U.S. last year, his company's sales lagged behind those of the other major European automakers: Mercedes-Benz, Volkswagen and Volvo. And his mandate is to double domestic sales this year.

Enter 40 Acres and a Mule Filmworks, Spike Lee's production company, which was chosen this year by Jaguar to help boost sales. Company executives say nearly 10% of the British car company's Stateside sales are to minorities--a statistic that shouts untapped market. Jaguar executives looked beyond their traditional markets to reach that segment.

Audiences know Lee, an award winning director and filmmaker, from his films--X, He Got Game and Summer of Sam--and for his quirky Nike Air Jordan commercials. Lee's projects usually reflect the African American experience, with particular emphasis on New York's black neighborhoods. You may not identify with Brooklyn, but after a Spike Lee "joint" (as he calls his films), you develop a certain affinity with the people and the place. Jaguar officials are hoping that feeling translates to their automobiles.

For some, the marriage between Jaguar and Lee may seem unusual. But Spike/DDB (No. 16 on the 2000 BE ADVERTISING AGENCIES list with $9.8 million in billings) has created TV spots for other major clients such as AT&T, State Farm Insurance, Taco Bell, Coca-Cola and American Express. With African Americans reportedly spending over $400 billion on goods and services last year, corporations are aggressively seeking some of the action.

"The world has changed," says Lee, regarding the growing urban marketing trend. "Smart businessmen have recognized this."

So has American Airlines, the nation's second largest airline carrier. When American selected Don Coleman Advertising Inc. in March, the Southfield, Michigan firm (No. 2 on the 2000 BE ADVERTISING AGENCIES list with $202 million in billings) became the first African American agency of record for a major airline. Coleman, an advertising veteran, has held court with clients like DaimlerChrysler, Kmart Corp., General Mills and Miller Brewing Co.

"Suddenly, we're what the industry is looking for," says Coleman, the firm's president and CEO. "It's a unique position to be in. We've worked hard for years, and now it's starting to pay off."

Intense global competition and, in some areas, market saturation, have challenged advertisers to look for fresh, new ways to sell products. Once brands have been established, analysts say, it becomes increasingly unlikely for companies to step outside of their traditional mold.

Recognizing this, and simultaneously fulfilling their need to grow larger, some black firms have sought partnerships with mainstream ad agencies. "To attract business, some black agencies have sold minority interests to larger global agencies," says Heide Gardner, vice president of diversity and strategic programs for the American Advertising Federation in Washington, D.C. "They have to grow larger to compete, and in many cases, that may mean sacrificing some control. Many firms aren't comfortable doing that." Coleman gave up 49% of his company to oversee New America Strategies Group, a partnership with True North Communications, a global holding company, Stedman Graham & Partners, Siboney USA and Imada Wong Communications Group. Spike/DDB is a collaborative effort between Lee and DDB Worldwide, ranked third globally.

Black marketers know baggy clothes and loud hip-hop or rap music in commercials won't necessarily attract black customers. But not all mainstream advertisers know this. Successful campaigns created by black ad makers demonstrate an understanding of African American culture and expressions, as evidenced by Budweiser's recent "Wassup!" commercial series, according to Lee.

Slowly, some are recognizing the power of the urban market. More companies are expanding their advertising budgets to include minority-targeted campaigns. But black ad agencies aren't always benefiting. Target Market News, a Chicago marketing research firm, says $1.1 billion was spent in 1999 to attract black consumers. Of that, just 30% went to black-owned ad agencies.

"There's a deficit, obviously, but each year black ad agencies are chipping away at it," says Gardner.