General Motors' Decision: (Overnight) Urban Legend or Business as Usual?

The Shot Heard Around the Multicultural World

Posted by Pepper Miller on 12.11.07 @ 04:03 PM

Pepper Miller

Urban Legend: A second hand story that is told as true, plausible enough to be believed and likely to be framed as a cautionary tale.

Three weeks ago, General Motors announced shifts in multicultural agency assignments which included a significant piece of business that is being reassigned from Carol H Williams, an independent Black-owned-and-operated agency, to a general-market agency. When the announcement was first released, the message reported and heard was "GM reassigns ALL Black agency business to general-market agencies."

Within days following the release of the story, Black marketing professionals and consumers used technology-accelerated word-of-mouth to spread the word with personal messages that included "dissed again by White America" and "Don't buy GM." The Black community's emotional response is partly fueled by echoes from Katrina, Imus, and Jena 6 and for Black marketers, years of struggling to keep Black consumer marketing in the race.

In an effort to defuse some of this activity GM North America VP Mark LeNeve first responded to MulitCultClassics commentary to the original story (Advertising Age pulled its original due to errors in reporting). Ken Smikle, CEO of Target Market News, who was quoted in original articles from Automotive News and Black Enterprise.com, also appeared with Gene Morris, fellow blogger and CEO of E. Morris Communications, on Al Sharpton's syndicated radio show to discuss GM's decision. Smikle later interviewed LeNeve in an exclusive two-part interview for Target Market News.

Click here for Part 1: GM's Mark LeNeve Explains Re-structuring, Review of Black Ad Agencies. Click here for Part 2: GM's LeNeve Weighs Talent Against Ownership in Black Ad Agency Review.

However, while general-market marketing professionals have moved on, the Black community has not. BET carried the story on its blog (which was a pick up from BlackEnterprise.com). And last week, AOL Black Voices' cover story on subscribers' home page was "GM Kicks Black-Owned Ad Agencies to the Curb!" OUCH!!

MultiCultClassics has the best accounting of and commentary about the GM scenario. They reprimanded GM in their initial post and, after the second Ad Age story, attempted to clarify any misunderstandings in a follow-up post. However, they didn't let GM off the hook. MultiCultClassics' insightful commentary addresses the issues fueling the uproar and appropriately scolds GM and corporate advertisers for their unjust ad agency assignment practices:

". . . when minority shops want general market prizes, the door is shut. On the flipside, when general market agencies long for the slivers of the budgetary pies reserved for minorities, it's no problem. Don't worry, you won't even have to pitch for it.... Let's also remember that the GM spokeswoman proclaimed, 'We will not have one-size-fits all.' But they will have one agency with all the pie."

Additionally, GM's announcement, intentional or not, has at the very least, planted the seed of a dangerous precedent for others to follow. Notably, GM's decision openly and unfairly questions Black agencies' value and has illuminated their bleak future.

"Black-owned agencies not under a general-market holding company umbrella may not be able to survive and thrive," says Herb Kemp, my co-author of "What's Black About It? Insights to Increase Your Share of a Changing African-American Market."He adds, "The budget allocation for minority markets may now be redirected and controlled by the general-market holding company, thus preempting black-owned ad agencies from competing, growing beyond a certain size, and participating only as a subcontractor."

And the story heats up . . .

Last week the National Alliance of Market Developers told Target Market News that it is "appalled" at General Motors' decision and publicly challenged GM to reconsider its restructuring plans for black agencies. This week, Jesse Jackson announced that he has addressed the issue in a letter to GM Chairman-CEO Rich Wagoner.

Conversely, some general marketers are starting to bite back. Ludlow & Grand -- a blog focused on "cultural entrepreneurship" -- posted a message suggesting that multicultural agencies are the New Segregationists. MultiCultClassics bit back, taking the words from my mouth:

"It's a bit insane to refer to multicultural shops as the new segregationists. Most of these agencies have been relegated to these segregated oppressed states by an industry whose failure to embrace diversity inspired minorities to launch the separate ventures"

If it looks like a duck, walks like a duck and sounds like a duck, it's business as usual.