Verizon is one company for which public pronouncements about spending more on Black-owned media are at odds with the results of the Ad Age survey. But the devil is likely in the programmatic details, where much of the company’s spending on Black-owned media appears to have shifted.
Speaking at last year’s ANA conference, Verizon's Senior VP Tony Wells said: “Since the murder of George Floyd, thousands of brands have committed billions of dollars” to Black and diverse-owned media. “The question,” he said, “is are we as committed now as we were?”
Based on the Ad Age survey data for Verizon, four out of five respondents that broke out spending by brand reported Verizon reduced its spending in 2022, and in some cases completely eliminated its investments. One media company did report Verizon increased spending and inked a long-term deal, but did not provide additional details.
Wells, however, did note in that same speech a number of efforts that included a deal with Reset Digital to use its Neuroprogrammatic Advertising platform to find diverse audiences that it’s been missing with prior targeting efforts. At least some, and possibly all, of the spending Verizon had been doing directly with media companies, could have moved to Reset and other programmatic channels to buy from Black-owned companies.
But Verizon’s strategy has left executives of some Black-owned media companies disappointed and angry.
“Programmatic is a race to the bottom,” said one. “We are seeing some brands trying to find an easy button and cheapen what is happening in the Black-owned ecosystem. People are going to stop buying directly and try to spend more in programmatic. They are saying it is to control for frequency, planning and duplication, but it is all about pricing.”
One agency executive said he’s also encountered resistance from some Black media owners to move to programmatic. “But they need to be comfortable with the fact that at least 30% of an agency's spend is happening through programmatic,” he said. “We have some partners that said no to programmatic, and we respect their decision. … But I want to be clear that they’re losing here. They’re leaving some money on the table that somebody else is going to take.”
Another survey respondent said their company was part of Verizon’s Black media days twice but never heard back, including on a more recent RFP.
Another Black-owned media executive said Verizon made a commitment and announced a multi-year deal, “then they started pulling everything. We fought hard and ultimately they still decided to do it. It left a bad taste in my mouth. They said they were having budget cuts. There is not enough Black-owned local inventory. No way they were able to invest as much as they did in national.”
Verizon pledged in April 2021 to spend 2% of its ad budget on Black-owned media. In January 2022, the company reported it was “on track to exceed” the $25 million it previously committed to spend with Black-owned media companies in 2021.
“Today we work with 20-plus Black-owned and operated media partners, from well-known traditional platforms to digital and emerging platforms,” said Rafael Rivero, senior VP, media and marketing effectiveness, Verizon. “These partnerships help us achieve our business objectives, and in many cases help our partners scale.”
Rivero added that Verizon exceeded its commitment to Black-owned media in 2021 and increased that spending by 20% in 2022.
In June 2021, Coca-Cola announced it would double its media spend with minority-owned companies over the next three years, with no less than 8% of its yearly budget directed to Black, Hispanic and Asian-owned platforms and their partners by 2024.
All five Black-owned media companies that provided brand-specific data reported Coca-Cola increased spending last year, one noting it hiked spending by $1 million and another citing a 160% spending increase.
But survey respondents reported mixed results since Coca-Cola moved its media account from Interpublic to WPP’s EssenceMediacom last year. One executive said Mediacom reached out proactively during the transition. But another said the transition varied according to property.
“I love Coca-Cola,” said one survey respondent. “They were one of our best brands.” But after it moved to WPP last year, he said, “we got zero dollars.”
As a matter of policy, Coca-Cola doesn’t share specific numbers around media spending, a spokesman said, but added that it is “on track to meet our commitment of having our Black, Hispanic and Asian American and Pacific Islander-owned media companies account for 8% of our total annual media budget in North America by 2024.”
This, the spokesman added, includes spending with Ebony and Essence, on things such as the Essence Festival of Culture that Coca-Cola will be sponsoring for the 27th year this summer and the Coca-Cola Zero Sugar Presenting Sponsorship of the 2023 Ebony Power 100.
In Ad Age’s survey, three of five Black-owned companies that reported spending at the brand level said Walmart increased spending and a fourth reported a decrease. Among companies reporting dollar figures, Walmart’s spending rose $1.6 million with one last year, while another reported a 150% increase.
Walmart in May 2021 pledged to spend 2% of its media with Black-owned companies in fiscal 2022 and 4% in fiscal 2023, and hit both of those targets, according to a spokeswoman (both fiscal years ended Jan. 31). Dollar figures weren’t disclosed, but Walmart spent an estimated $2.5 billion on media as measured by Vivvix and Pathmatics in calendar 2022, up about 20% from the prior year. It’s less aggressive than Target has been, but also off of a bigger spending pool.
Results were very mixed by company. One reported that it lost all its Walmart spending; Another saw a nearly fourfold increase. One survey respondent described Walmart as “dedicated and committed” and issuing many RFPs. “We don’t win all of them,” the respondent said. “But we seem to always be included.”
One agency executive, who spoke on background, said the agency was trying to ensure budgets for Black-owned media stay strong by pushing clients to establish dedicated budgets and include at least one minority company on every RFP. Clients who were already “leaning in” continue to do so, while clients who haven’t “are slowly joining as well,” the executive said.
But a worrisome trend is with clients trying to shrink the number of partners they work with, the executive said. “There’s always this mentality of fewer, bigger, better. I think in the minority space, that’s not always the case, because you want to see more opportunity growth.”