IS THE AFRICAN-AMERICAN CONSUMER UNDERVALUED? CABLE EXEC LOUIS CARR ARGUES HIS FIGHT FOR HIGHER CPMS IS BEING UNFAIRLY DEFLECTED. BUT SOME MARKETERS, AGENCIES DISAGREE: BET CRIES FOUL, HITS LACK OF AD COMMITMENT

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In the business of buying and selling national TV time, relationships are paramount.

The I'll-scratch-your-back-if-you-scratch-my-back variety are the best.

Consider: Network seller A has a dog of a show to sell, so he calls agency buyer B, who purchases a spot on the show in return for a great cost-per-thousand on the hottest show on that net. And so on.

Given the sensitivity of these relationships, what usually isn't seen is buyers or sellers carping, on the record, about the other guy, and naming names. It wouldn't be politic.

But for Louis Carr, exec VP-broadcast media sales for Black Entertainment Television, it's past time for niceties.

He is on a mission to get more ad dollars for BET, and at higher CPMs. The point he makes is that too many advertisers and agencies undervalue the African-American consumer. And, if that consumer is not valued correctly, he says, then advertisers and agencies don't want to pay a fair value to reach him or her.

Ad spending in minority media has become a hot topic.

"The issue is out there and advertisers have to deal with it," Mr. Carr says. "I was on the phone with a client, who was complaining that I was trying to raise their CPM. I said, answer this question for me: 'Where else in TV-cable, syndication, broadcast-can you take that same amount of money, even with our increases, and get black consumers cheaper?' He said, 'Nowhere.' "

EGO AND PRIDE

For this issue to be resolved, Mr. Carr says, ego and negotiation pride have to be set aside.

"What we're saying is if you have $1 million, and the CPM you currently have is $3, and we want to raise it to $5, if $5 is still the cheapest CPM in TV for African-Americans, it's still a good deal," he says.

But what happens is that some buyers won't make the deal. Then they buy something more expensive, just because of their ego."

BET, available in 55 million homes, was asking about $1,800 for a prime-time 30-second commercial during the 1998 upfront sales period.

Mr. Carr is especially aggravated by some marketers, such as Reebok International, which he says are supported by BET's target audience but which do not, in turn, support BET.

"Reebok only offered us $200,000 in the upfront last year," Mr. Carr says. "I'd guess that 20% of their sales are to African-Americans."

The problem, he says, is that Reebok "just doesn't see the value of the African-American audience. They told us, 'We aren't paying that for you guys.' Which is amazing to me when you look at what they're paying for ESPN. Now, I understand programming environment and all that, but when you look at who buys three-plus, or four-plus, pairs of shoes a year, our [audience] indices and numbers are much better than ESPN's ever will be."

REEBOK RESPONDS

Brenda Goodell, Reebok's VP-worldwide marketing communications, bristles at Mr. Carr's remarks.

What he says about Reebok is "far, far from true," she responds. "Personally, I think BET is a tremendous network. We've done lots of work with them in the past, and we'd hope that we'd continue in the future. . . . He's disappointed in the amount of the media spent in the upfront. It certainly has nothing to do with how we would value any of our consumer audiences."

She says because of volatility in the athletic-shoe category, Reebok decided to make a number of buys in the scatter market rather than the upfront last year.

"He's making a statement that's ill-informed," Ms. Goodell says. He doesn't know that I've bought any time on ESPN because, frankly, I didn't buy any ESPN in the upfront. He thinks BET was excluded from a media buy when the truth is we have a new CEO, and we're developing a new brand campaign, and I couldn't during the time of the upfront sit down and plan out a 12 to 18 month schedule and make commitments."

REFUTES % CLAIM

Furthermore, she says Mr. Carr's assertion that 20% of Reebok's sales are made to African-Americans is not true, though she declined to give the percentage blacks do purchase.

"My statement wasn't based on one particular season or year," Mr. Carr responds, "scatter or upfront. It was based on a number of years-going back and looking at the spending they've done with us, and the type of [CPMs] they've wanted to give us against that spending. So there's a history there."

Carter-Wallace is another marketer Mr. Carr blasts. Among other products, Carter-Wallace makes Trojan condoms.

"There's information out there showing that African-American males are sexually active," Mr. Carr says. "There's information showing AIDS is rapidly growing in the African-American community, and is an issue.

TROJAN ADS ON MTV

"So you have two reasons to advertise condoms on BET," he concludes. "First business, second social. But Carter-Wallace tells me they have a 'creative problem' with their ads so they basically don't use us. Year after year they tell me they have a 'creative problem' in coming up with spots appropriate to run on BET. Meanwhile, MTV is loaded with their dollars."

Carter-Wallace spent $1.7 million in 1998 advertising Trojan condoms on MTV, according to Competitive Media Reporting.

"We've been getting zero dollars from them," Mr. Carr says. "Just recently they finally came to us with a proposal, but they didn't want to pay scatter rates. Our president, Deborah Lee, has tried to call their president repeatedly, but her calls are never returned."

Vincent Balzano, Carter-Wallace's director of media and planning, says the company does not comment on its advertising strategy.

STARCOM 'NON-RESPONSIVE'

On the agency side, Mr. Carr cites Leo Burnett Co.'s Starcom USA, Chicago, as being particularly non-responsive to BET's pleas for better rates.

"When we asked them for an adjustment last year, they came back with a spending amount of $500,000, when it was $2 million the year before," Mr. Carr says. "We've sat down with them so many times. Our chairman has sat down with them, our president has sat down with them" and gotten nowhere, he laments.

His conclusion, he says, "is that Starcom really doesn't value the African-American consumer."

In a written response, Starcom says the company "values the African-American consumer market and we have successfully negotiated with BET on numerous occasions in the past. . . .

"Candidly, in the past upfront we would have purchased more from BET if the network had not demanded an average price increase of 80% when comparable networks were increasing rates from 2% to 12%."

Mr. Carr says, "We had never had a rate adjustment from Leo Burnett over the time we've been doing business with them, like many other cable networks probably have."

COMPARABLE PRICE

Mr. Carr says the CPM BET was asking was comparable to other cable networks.

"We felt that to give us an adjustment but asking us to cut our budget by some 150% was not fair," he says.

The Starcom statement says, "Recognizing the importance of BET in reaching the African-American consumer, Starcom offered to give BET a healthy marketplace adjustment over a three-year span, which was unilaterally rejected by BET."

Mr. Carr says "a three-year adjustment was never offered."

Starcom also says a number of its clients, as well as clients of siblings Burnett USA and Vigilante, New York-an agency specializing in African-American advertising-have made significant investments in BET in recent months in the scatter marketplace, and they've paid the prevailing market rates.

"Yes, they are doing some scatter business with us at some scatter rates," Mr. Carr says. "But it's still less than $1 million. And is that something that they're proud of?"

Furthermore, he says the primary deal with Vigilante is a buy on BET by Sprint Corp. that was negotiated at the client level, bypassing the agency.

"Starcom and Vigilante are just really administrating that deal, so they can't take credit for it," he says.

The Starcom statement says the media shop "very much follows the law of supply and demand in its dealings with all media suppliers and requires them to price themselves accordingly. While we remain committed to minority media vehicles and recognize the need to support efforts to create parity in the marketplace, we are unable to accept rate increases that we cannot justify to our clients."

But Mr. Carr contends, "When they talk about supply and demand, they told me they pay premiums on some other networks, based on supply and demand. How do they really know that? They know what the networks tell them."

Letting out a sigh, Mr. Carr says this battle isn't really a BET issue.

"It's a black consumer issue. "We're putting together a testimonial tape for our clients. Steve Grubbs [exec VP-director of national TV buying] at BBDO is on there, and he's asked if he'd recommend BET to any clients. And his answer is, 'If they feel that the black consumer is important to their business.' And

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