A new report from the author of a controversial 1999 Federal Communications Commission study on minority media claims to prove that advertisers discriminate against minority-owned and urban-format radio stations. While confined to the radio industry, the new study's release escalates the contentious debate on the use of minority media overall.
The report was conducted by Kofi Ofori, a researcher who did the 1999 study for the FCC, and was commissioned by parties that have an interest in minority media advertising. Syndicated Communications Venture Partners, a venture capital firm for minority radio, gave money to the National Black Media Coalition to conduct the study with Mr. Ofori.
Titled "Minority-targeted programming: An examination of its effect on radio station advertising performance," the new study asserts that discrimination isn't the main reason minority-owned and urban-format stations don't get their fair share of media buys, but that it represents two of the top reasons.
"According to some of the people interviewed, agencies tend to employ young white women to place buys-most of who have had little exposure to racial/ethnic minorities throughout their life experience," the study said.
The study was conducted with 120 stations in five markets, and concludes that buyers of local radio time don't look at station demographics in a scientific manner. It says they first evaluate news talk or sports formats; then station size; then audience age. But the study says buyers should also be judging whether a station's audience meets the target demographics, checking whether programming is targeted to minorities, and whether it is owned by minorities.
The report calls on the FCC and the Federal Trade Commission to "establish a joint task force to continually monitor the status of disparities in the radio industry and adopt standards for acceptable advertising practices." It continues, "Such standards should establish sanctions for unfair and discriminatory practices to be enforced by the FTC. The FCC should consider penalties assessed by the FTC when reviewing the license renewal applications of broadcasters." The full text of the report is available on the Web at www.teclawgroup.com.
Ad groups and media buyers last week welcomed the study and agreed with conclusions that media buying isn't scientific enough, but said the report didn't accurately portray progress since the earlier FCC study. They also disputed the report's characterization of media buyers as white women who had little understanding of minorities. Moreover, they questioned the need for government intercession. Several maintained that focusing on local buying ignores the dramatic growth in spending to reach minority consumers, which is reflected more clearly in network and cable TV spending and in national radio.
"When I look at Telemundo and Univision and BET ... the value of ethnic marketing has risen up and down the line," said Howard Nass, senior VP-executive director of True North Communications' TN Media, New York. "My personal belief is we have addressed this." Telemundo and Univision are Spanish-language TV networks; Black Entertainment Television is being acquired by Viacom.
Traug Keller, president of Walt Disney Co.'s ABC Radio Networks, said ABC's attempt to ramp up its Urban Advantage Network-a conglomeration of urban radio stations across the country-has brought competition among advertisers jockeying for premium positions. "We have Burger King and McDonald's fighting it out. We have J.C. Penney and Kmart fighting it out for exclusivity on our lead urban programs," he said. "On the national level, we see more dollars flowing into urban radio than historically was the case."
Hal Shoup, exec VP of the American Association of Advertising Agencies, suggested station format, audience size and the audience age are the primary factors advertisers take into account in determining what station to buy.
Mr. Ofori's study found media buyers bought on station format more than income demographics, sometimes excluding urban-format stations. In one case, a Washington, D.C., radio station described as "contemporary hit radio" did much better than another local station described as "urban," though both have similar audiences, ratings and play the same music. He also suggested agencies' heaviness of buys of news, talk and sports stations, transcends logic. Buyers, he claims, ignored the opportunity to sell their products to twice as many consumers with incomes of $25,000 to $75,000, instead aiming at heavily white, slightly more upscale audiences at news, talk and sports stations.
"It appears that there is an assumption that you can implement demographics by just choosing formats as opposed to understanding who is listening," he said.
The study chastised the American Advertising Federation for failing to deliver on its commitment to delivering a baseline study of workforce diversity in the advertising industry and adopting a voluntary code to promote equity in media buying.
Heide Gardner, AAF's VP-diversity, said that Mr. Ofori was apparently unaware that AAF recently adopted standards. She said AAF tried to do a study of diversity in the advertising industry, but relatively few companies returned questionnaires. Ms. Gardner said she welcomed the new report but suggested it understated progress.
"We are encouraged that we are on the right track, based on the minority companies we work with."
Bonita LeFlore, exec VP-director of local broadcast for Publicis Groupe's and Cordiant Communications Group's Zenith Media, New York, said the report correctly noted the dearth of good research into station audiences. But she added that the research is improving. "The point that the buyers only look at four or five things is not true. They have to evaluate ratings delivery. That is critical towards the target." Ms. LeFlore said she viewed the report as "a challenge to the buying community to promote racial diversity."
Allen Banks, exec VP-exec-utive media director at Publicis Groupe's Saatchi & Saatchi North America, said he agreed with the study's view that media buying involves judgement. He disputed the suggestion that buyer background or station ownership enters into buying decisions, but hastened to add that the need for increasing diversity in the media buying ranks is strong.
"I hope people will understand that the issue has not gone away," Mr. Ofori said. "There is still racism in America in how media is done. As long as the problem remains, the needs of people of color will not be observed."
Contributing: Cara Beardi
Copyright January 2001, Crain Communications Inc.