January 14, 2022

Digital Marketing Education

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How advertisers have invested in Black-owned media—checking in on their pledges

“We’re pleased and continue to be impressed with the levels of interest and commitments that BNC and BNC GO are drawing from agencies and brands, many of which are purposefully reaching out to Black consumers for the first time,” said David Fitzpatrick, senior VP and chief revenue officer of the Black News Channel. “Every brand needs to demonstrate growth, and it feels like after decades of overlooking the audiences that we super-serve on a daily basis, companies are now looking at us as a priority demographic,” he said.

The 24/7 news network, which launched in early 2020, previously reported strong interest during its upfront presentations in 2021, with Fitzpatrick telling Ad Age at the time that demand was then “exceeding what our expectations would be for a start-up network.”

“This is the first year we really had a strong lean-in from agencies, a strong buy-in from the agencies, and commitment,” Lynnwood Bibbens, founder and CEO of out-of-home media company ReachTV, said in December during an Ad Age Remotely broadcast. And 2021 marked ReachTV’s first formal upfront presentation, he added.

“And I’ll tell you, it’s such a big difference because now I have predictable revenue,” said Bibbens. “Now I can go make original programming, and now I can go do certain things because I know what my revenue is going to be. And that’s the advantage when you bring Black-owned media into this and give them an opportunity to predict their revenue, they can then build their business. That’s why it’s so important.”

The Black-owned company, which operates nearly 2,500 TV screens in airports across North America and the U.K., had a successful year by almost any measure. In June, Bibbens’ company struck a major deal with IPG’s Magna to bring its clients sponsorships and integration opportunities. It also struck a deal with NBCUniversal that brings ReachTV into the media giant’s pitch to advertisers. 

But while Black-owned media leaders seem to have experienced a collective boost in advertiser interest in 2021, there’s still plenty of work that needs to be done, and at least one prominent advocate believes many of these promises fall short.

Making up for lost time—and money

“They’re all behind and they’re all guilty. None of their numbers are defensible,” media mogul Byron Allen, who has been one of the advertising industry’s most outspoken critics, said of brand and agency pledges.

In March, Allen, the CEO of Allen Media Group and owner of The Weather Channel alongside other cable networks and media assets, issued letters of intent to various U.S. brands and their ad agencies calling for them to invest a minimum of 2% of their marketing budgets in Black-owned media or face legal action.

It’s a promise Allen kept on at least one occasion, initiating a $10 billion lawsuit against McDonald’s in May on the grounds that it systemically discriminates against Black-owned media companies. He also publicly called on the fast-food chain to fire CEO Chris Kempczinski following the release of insensitive text messages between him and the mayor of Chicago. But a California judge tossed the lawsuit in late 2021.

In May, McDonald’s promised to more than double its U.S. investment in diverse-owned media companies, production shops and content creators by 2024. Over the next four years, it plans to increase its U.S. advertising spending with platforms owned by Black, Hispanic, Asian American, female and LGBTQ people from 4% to 10%.

Allen said most of the pledges made by media companies over the past year are baby steps and aren’t enough. “Black people represent 13% to 14% of the population, we should have at least 15% of your budget for all the years we were excluded, for all the years of zero,” said Allen. “And pay me more than the white guys for all the years you didn’t pay me.”

As far as Allen is concerned—and what the wording of many advertisers’ investment pledges seems to align with—companies should primarily be investing in Black-owned media, rather than Black-targeted media, which in many cases boast a larger reach but are often not helmed at the very top by members of the communities they serve.

“We’ve had conversations around that … What our opinion is, is it comes down to those who are serving the audience in multiple ways,” said Louis Carr, president of media sales at BET Networks, which is owned by ViacomCBS and ranks among the largest Black-targeted—but not owned—media companies in the U.S. 

“Look at it like this,” said Carr, who pointed to a brand that’s day-to-day operations are run by a majority Black workforce and one that’s putting out content targeted at African Americans (BET was formerly a Black-owned business prior to its acquisition by ViacomCBS, then Viacom, 20 years ago).

And despite the business’s lack of a “Black-owned distinction,” Carr adds that advertisers have continued to lean in and recognize the value of Black-targeted media, as well, “not just from an optics standpoint, but from a revenue standpoint.”

The network sold out of ad inventory in its annual BET Awards in record time, adding 10 new advertisers to the mix. 

High tides don’t necessarily float all ships

While media companies both owned by and catering to Black Americans with a national presence largely report that advertisers have been maintaining a healthy pace with their earlier investment pledges, the same can’t always be said for local and regional Black-owned outlets in the U.S., many of which say they’ve seen little to no renewed interest from brands in the past 18 months.

“Unfortunately … there’s been nothing new with the brands. With the agencies, we’ve had a few inquiries, but nothing that has actually transpired into anything,” said Tracey Williams-Dillard, publisher and CEO of the Minnesota Spokesman-Recorder, the state’s oldest Black-owned newspaper.

Founded in 1934 by Williams-Dillard’s grandfather, the storied weekly is headquartered in Minneapolis, which has become an epicenter of the Black Lives Matter movement following the police killings of George Floyd and Philando Castile in 2020 and 2016, respectively.

It’s also a major corporate hub, with the larger Twin Cities area playing host to the headquarters of Best Buy, Target, General Mills, 3M and many more. And those companies haven’t stayed silent about their diversity, equity and inclusion goals; in June, Best Buy vowed to funnel nearly 10% of its ad dollars to BIPOC media by 2025, while the latter two—both GroupM clients—publicly signed onto the agency’s minimum 2% media investment pledge that same month.

“We decided that one of the other avenues we could take to kind of further the discussion was to contact some of the corporations, some of the local ones,” said Williams-Dillard. “To date, again, nothing. Crickets.”

The Spokesman-Recorder’s somewhat stagnant advertiser growth has not been for a lack of trying, with the paper’s ad sales team confirming that they have attempted to contact and strike deals with several brands or their ad agencies, and while preliminary conversations have occurred between the paper and at least two U.S. agencies, they have yet to secure much in the way of firm ad commitments.