The Hispanic Newspaper Network, which provides group buys through 14 minority newspaper publishers, filed a $1 billion lawsuit in U.S. District Court in Manhattan on Aug. 2 against WPP Group's Young & Rubicam, J. Walter Thompson Co. and Ogilvy & Mather Worldwide.
The organization contends the shops excluded minority-owned publications from media buys for federal government accounts, charging restraint of trade and violations of the Sherman Antitrust Act. The suit cites the Racketeer Influenced & Corrupt Organization statute to claim economic injury through a pattern of misconduct. Under RICO, plaintiffs can get triple damages.
The agencies named in the suit worked for government entities the U.S. Census, U.S. Marines Corps, U.S. Army, U.S. Postal Service, U.S. Centers for Disease Control and White House Office of Anti Drug Policy.
"The advertising agency defendants have been biased in the allocation of government-related advertising dollars," according to the complaint.
`NOT SOUTH AFRICA'
"The issue here is that Madison Avenue has created a separate and unequal media category," said Victor Gold, national director of the Hispanic Newspaper Network. "This is not South Africa."
According to the lawsuit, the agencies were prime advertising contractors--or the agency of record--for some $700 million worth of government agency-related billings in fiscal '99, of which less than $1 million went to the newspaper plaintiffs.
The agencies named either declined comment or did not return calls. At other ad agencies and Hispanic media groups, the suit was viewed questionably.
"From an agency perspective," said one Latino media buyer at an agency not affiliated with WPP and who requested anonymity, "we get hired to do the best possible job for clients." But, the buyer added, "the flip is a lot of smaller papers feel if they don't take actions of this magnitude, they don't get the attention they probably deserve."
"It's not a matter of being slighted" when Latino-owned publications are not always chosen as vehicles for messages aimed at that market, said another media buyer--it's sometimes merely a reflection of the mass power of the local major metro. "It's just, I'm sorry, in that [targeted] ZIP code your circulation is less than the major daily paper."
"That's what they get paid to say," dismissed Mr. Gold. "You can't obfuscate the history of federal ad dollar [placement] with gibberish over reach and frequency."
This recent lawsuit marks the latest minority complaint against Madison Avenue. The Rev. Al Sharpton took the issue center stage in May 1998 after a Katz Media Group training memo advising against minority media buys was made public. The memo urged station salespeople not to buy ethnic stations because "advertisers should want prospects, not suspects." In June, the Rev. Sharpton organized a protest in front of Y&R's New York offices and, since then, has been outspoken on the subject.
CONGRESSIONAL BLACK CAUCUS
Ogilvy also has had critics of its ethnic media expenditures. In March 1999, members of the Congressional Black Caucus questioned if Ogilvy was devoting enough money to African-American media buys for its Office of National Drug Control Policy account.
Nielsen Media Research and Arbitron Co. have felt heat on the subject lately as well, with charges the rating services have under-represented Hispanics.
Still, the issues of attracting national advertising have not united Hispanic publishers.
The lawsuit "is probably untimely," said Kirk Whisler, president of Latino Print Network, the group-buy arm of the National Association of Hispanic Publications, "because we haven't exhausted other avenues" to win more advertising.
Comments from Mr. Whisler and HNN President Art Lerner indicate there's little love between the two and their organizations. Asked why he thought Mr. Lerner left NAHP-related group sales efforts, Mr. Whisler replied "Maybe Art Lerner wasn't the center of the universe" there.
"I think Kirk's got a problem with me," responded Mr. Lerner. "I just didn't feel they were an aggressive organization."
Copyright August 2000, Crain Communications Inc.