It likely will set the stage for a new round of attacks against marketers and ad agencies by civil rights activists.
WIDELY DIFFERENT AD REVENUE
The study of 1,000 stations in the top 100 markets was done for the FCC by Kofi Ofori, counsel for the Civil Rights Forum, and showed that stations with similar ratings and sometimes nearly identical programming formats got widely different ad revenues depending on whether they were minority-owned or not.
Mr. Ofori, speaking at a meeting of the National Association of Black-Owned Broadcasters last week, said white-owned broadcasters get 30% more revenue than minority broadcasters when both have minority-formatted stations.
"This is a systematic problem in the advertising industry today, said FCC Chairman Bill Kennard.
The FCC report, due next month, is part of the agency's continuing probe into the struggles of minority media.
The American Association of Advertising Agencies said it is trying to set up a meeting between the Rev. Al Sharpton, the civil rights leader who has been spearheading an attack on advertising, and agency CEOs, perhaps in November.
The Rev. Sharpton's initial outcry followed the disclosure of a Katz Media memo suggesting the staff at WABC radio in New York sell against minority media by urging advertisers they should aim to reach "prospects, not suspects."
AAF SEEKS CORPORATE SUMMIT
Last week, the American Advertising Federation said it would join with industry groups in the financial, food, drug and consumer products segments to sponsor a series of corporate CEO summits next year on the need to buy minority media and use minority ad agencies.
Vice President Al Gore, speaking to the black broadcasters, announced plans to ask government agencies to re-examine whether they are adequately using minority media and agencies. He issued a warning to advertisers.
"I was appalled when I read about that shameful memo urging advertisers not to use ethnic stations. There was no place for that kind of discrimination in 1968; there is no place for it in 1998 and I guarantee you we are going to take whatever action is necessary to prevent it," he said.
The Rev. Sharpton, who was part of a panel, said strong minority broadcasters help empower minority political power and he suggested that discrimination against buying or paying comparable ad rates for minority media might warrant boycotts. He said he will push for marketers to put aside a set portion of their ad dollars for minority media.
`NOT ARGUING FOR CHARITY'
"National advertisers enjoy large numbers of consumer dollars from our community," said the Rev. Sharpton. "Those consumer dollars should not go in uninterrupted if those consumers are aware of discriminatory practices by those same advertisers when they place their advertising dollars.
"I am not arguing for charity for stations that can't make it. I am talking about black-owned stations that are in the top five of their markets that cannot get advertising revenue and, therefore, are discriminated against."
The Rev. Sharpton also questioned whether the government was adequately policing its own agencies' minority hiring and minority media use.
NO IMMEDIATE PROMISES
The FCC's Mr. Kennard said he was "sensitizing the advertising community to the impact they make" on diversity in the media, but made no immediate promises pending the release of the commission report.
Ad industry and media executives acknowledge that minority media have been getting short shrift in their share of ad budgets.
"I don't think you can question the numbers. The ad budgets going to minority media and agencies don't reflect those [ratings] numbers," said AAF President-CEO Wally Snyder.
Louis Carr, exec VP-broadcast media sales, Black Entertainment Television, described sitting in on meetings with several sets of investment bankers and being asked repeatedly to explain why BET, with similar or stronger ratings than other cable networks, was generating less revenue per ratings point.
His only answer was that "it is a form of racism," Mr. Carr said.
He said BET has rejected $9 million in advertising since the cable network decided four months ago to reject "token" ad buys that failed to value the minority community.
NOT PASSING ALONG MESSAGE
Mr. Carr also suggested that while company and ad agency CEOs understand the need to reach minority consumers, and the issue of media pricing fairness, they aren't adequately passing the message along to entry-level media buyers.
"The people at the top know, but they are not being accountable for their people," he said.