How Walmart, P&G, General Motors, PepsiCo and other big marketers are spending on Black-owned media

Amazon, Coca-Cola, Diageo, Eli Lilly, McDonald’s, Procter & Gamble, PepsiCo and Walmart were among the major marketers that increased their spend on Black-owned media channels at some of the highest rates in 2023, according to an Ad Age survey of Black-owned media companies. This helped offset some sharp declines from advertisers including AT&T, General Motors and Target. Ad Age surveyed seven Black-owned media companies on how the 100 Leading National Advertisers spent on their channels in 2023. The survey only covered top advertisers and a portion of Black-owned media, so it’s not necessarily representative of the entire market. But these media companies saw a 24% increase in spend from the top 100 advertisers to $144 million last year, indicating growth at least for Ad Age’s roster of blue-chip advertisers. Read about Ad Age’s 2024 Leading Women here But only 67 of Ad Age’s top 100 advertisers spent anything at all in 2023 with the Black-owned media companies surveyed. And growth largely came from a handful of big marketers. Even some brands that made commitments to hit specific spending thresholds on these channels back in 2020 saw some major drops in spending with surveyed companies. There were some positive signs. Among the 67 marketers that spent money with the surveyed firms, 45 of the advertisers boosted spend in 2023. And the number of top 100 advertisers that spent money with these media firms increased from 63 in 2022. While the seven firms that responded represent a substantial share of the marketplace, it’s not clear whether their results are representative of the entire marketplace. And Ad Age only asked this year for data on marketers from Ad Age’s ranking of the top 100 U.S. advertisers over the past two years—and not overall spending from a firm’s advertising clients. The distribution of those commitments varied among the Black-owned media companies surveyed, with some seeing far greater growth and extremely strong CPMs, or the cost to reach 1,000 consumers. Interestingly, even the time it took for Black-owned publishers to get paid by the same brands varied, according to the survey. The survey did not take into account spend that goes through programmatic channels. A study released earlier this year by the Association of National Advertisers Alliance for Inclusive and Multicultural Marketing (AIMM) showed spending with Black-owned media companies increased only 6% to $991 million in 2023. That study cast a wider net, based on Guideline (previously known as the Standard Media Index) data, which comes from participating ad agencies. It covers all marketers and a wider array of Black-owned companies but doesn’t break out spending by advertiser or cover spending that happens outside of participating agencies. Media companies participating in Ad Age’s survey reported a big increase in spend by companies including Walmart, PepsiCo, Amazon, Procter & Gamble, McDonald’s, Diageo, Coca-Cola and Eli Lilly, which all upped their commitments by 40% or more and in some cases more than tripled spending with the firms surveyed. General Motors, Target and AT&T each had substantial spending declines of anywhere from 30% to 48% at the media companies represented in the survey. Of course, these brands may have spent money with Black-owned companies that didn’t respond to the survey. Read last year’s report here Uneven growth While spending with Black-owned media companies is growing, it’s clearly uneven. An executive with one of the surveyed companies wasn’t surprised that reported growth was faster for the 100 Leading National Advertisers than the market as a whole, because the company has seen the most growth among the biggest advertisers. Check out the latest Ad Age events and award programs The executive believes that’s because bigger advertisers are more likely to have made public commitments to spending with Black-owned companies and are more likely to face scrutiny over their spending. At every big agency, one to three brands is generally making big seven-figure outlays, “but then there’s a massive drop off between those brands and the other clients,” the executive said. “Much of this is performative activism, and the only ones that need to perform are the top 100.” Growing programmatic volume One place where some of this spending could be going is programmatic. Reset Digital, a Black-owned ad tech company that operates both as a supply-side and demand-side platform specializing in diverse-owned media, has seen rapid growth, with sales up fourfold last year and tracking toward another threefold increase this year, said CEO Charles Cantu. (Reset Digital did not participate in the survey.) One reason for the strength in programmatic trading is that marketers want to buy Black-owned media but are put off by the rising CPMs caused by inventory constraints in the market, Cantu said. Cantu and the executive from the Black-owned media respondent cited CPMs in the range of $15-$40, well ahead of the market for most other inventory on the open web and in-line at the high end with some of the strongest CPMs found in another inventory-constrained market: ad-supported connected TV. Those CPMs may be scaring away some advertisers. An executive with a second Black-owned media respondent reported getting considerable pushback even from bigger advertisers regarding high costs, saying it’s “not efficient based on what they’re seeing in the market.” Both media executives said they’ve resisted efforts to sell inventory programmatically, preferring direct relationships and not wanting to drive down costs, though some marketers are insistent. When CPMs are high, MFA is less of an issue Inventory constraints and higher CPMs have led some Black-owned publishers to turn to paid traffic from social media or such companies as Outbrain and Taboola to help meet demand. That’s led to some reports that the crackdown stemming from an Association of National Advertisers report on the programmatic marketplace in June, finding widespread buying of low-quality “made for advertising” sites whose audiences heavily come from paid traffic, is hurting some Black-owned publishers. But media executives interviewed by Ad Age said they aren’t seeing that. One reason is healthy CPMs, which can allow sites to make money on paid traffic without resorting to high ad loads and ultra-fast refreshes on pages. Also: Why the ‘made for advertising’ crackdown isn’t working The percentage of paid traffic is one issue considered by measurement firms such as Jounce Media or DeepSee.io in classifying a site as “made for advertising,” which can lead to block lists for some agencies and advertisers. But it’s not the only one. In the absence of other markers of MFA sites, such as click-bait headlines, low-quality gallery formats and heavy ad loads, paid traffic is less likely to lead to an MFA designation. Payment terms vary One interesting detail seen across the Ad Age survey is that many of the advertisers have different payment terms for different media companies. The same advertiser may have 30-day terms for one company, but 60-day, 70-day or longer terms for others. The reason is that the terms are negotiable, at least for smaller and Black-owned media companies and suppliers. But the negotiating power varies by company. “Brands understand that people can have cash flow issues, especially as you’re getting into bigger numbers,” said the first media company executive. “You have to ask, and then negotiate. No one is going to voluntarily walk up to you and say instead of paying you net 120 I’m going to pay you net 30.” More: 4A’s urges agencies to stand against long payment terms Ad Age Small Agency Conference & Awards Join us July 23 & 24 in Boston Learn more here But the second executive is often seeing little wiggle room on payment terms in many cases, and that leads to problems for a company that has limited capital for paying employees and suppliers faster than marketers or agencies are paying them. “Some of these companies have back-end systems and operations out of this country,” the executive said. “When you’re trying to expedite payment, you just become another ticket number.” Here’s how some of the biggest players in Black-owned media performed last year. Walmart Walmart was the top spender, with $14.7 million in spend across the seven survey respondents. It also had the biggest dollar increase, up $10.6 million or 260%. That increase came even as the company’s overall U.S. ad spending, as measured by Vivvix with Pathmatics paid social data in calendar 2023, declined from $2.5 billion to $2.3 billion. In May 2021, Walmart pledged to spend around 4% of its media budget with Black-owned companies by fiscal 2023, which ended Jan. 31 of that year. A spokeswoman declined to comment on spending with Black-owned companies or provide an update on targets beyond last year. Executives with media company respondents interviewed by Ad Age said Walmart stood out as a company that appeared to be spending out of clear strategic interest in reaching Black shoppers, rather than to hit an equity target. While it’s very much a national retailer, Walmart under-indexes in major urban areas in terms of store presence, which makes it more of a priority to reach Black shoppers. It wouldn’t be surprising if Walmart didn’t make any further numerical commitments, said one executive, in part because that might engender backlash in an environment where diversity, equity and inclusion initiatives have come under fire. “It’s better to walk the walk than talk the talk,” the executive said, adding that Walmart has been particularly active in supporting and advertising around major events such as Black History Month and Juneteenth, which in some cases may have crowded out other retailers from exclusive deals or the most relevant ad inventory. Procter & Gamble Co. Procter & Gamble Co. Chief Brand Officer Marc Pritchard repeatedly has said that while P&G doesn’t have a numerical goal for share of spending on Black- or diverse-owned media, the company wants to be the biggest spender with diverse-owned and operated media. P&G wasn’t the biggest spender in the Ad Age survey, but rose in the ranks among respondents by increasing spending 67% to $10.9 million among respondents. That’s 10 times the pace of P&G’s U.S. measured media outlay, which rose about 6% to $3.5 billion. P&G declined to comment for this story, but overall the company has doubled spending in multicultural media over the past four years, Pritchard said in a speech to the ANA Media Conference in March. “This helps us reach more of each consumer segment in resonant media programming where consumers are more engaged in programs made uniquely for them,” he said at the time. Currently, P&G reaches around 77% of Black consumers, the highest of any ethnic group, compared to 75% of white, 66% of Hispanic and 59% of Asian American consumers, he said. P&G faced some criticism among respondents to last year’s Ad Age Black-owned media survey for talking a bigger game than its spending delivered. It didn’t run into that this year given the increases it posted. Amazon While the biggest advertiser among Ad Age’s Leading National Advertisers hasn’t made any specific commitment to spending share with Black-owned media, it certainly stepped it up last year among survey respondents. Amazon’s spending in the survey was up 44% to $11.2 million. Amazon’s overall U.S. spend decreased 13% to $6.2 billion last year per Vivvix and Pathmatics. Amazon did not return a request for comment for this story. General Motors GM has had firm long-term goals for spending with Black-owned and other diverse-owned media, but it showed a big drop in spend in 2023 among the seven Black-owned publishers surveyed, down 47% to $5.4 million. “General Motors is committed to supporting diverse media suppliers,” according to a company statement. “Launched in 2021, our Road to Equity action plan enables engagement, economic empowerment, and sustainable growth with diverse media. Since its launch, we have either met or exceeded our Black-owned media goals—2% in 2021 and 4% in 2022—and are on the way to reaching our goal of 8% in 2025. In terms of total investment with diverse-owned and targeted media, in 2023 we invested over 14% of our effective total annual media spend and we endeavor to maintain this performance in 2024.” Read about Ad Age’s 2024 Leading Women here Some of that spending does appear to have gone to other publishers not represented in the survey. One media executive who participated in the Ad Age survey said GM’s investments in electric vehicles may have sapped money generally for ad spending. GM’s overall U.S. spending decreased around 14% to $1.2 billion last year, according to Vivvix and Pathmatics data. McDonald’s The fast food chain prevailed in February in its long-running legal battle with Byron Allen, as a court dismissed a $100 million lawsuit alleging McDonald’s discriminated against his company, Allen Media Group. McDonald’s also was a big gainer in the Ad Age survey, with spending up 217%, or more than threefold, to $11.6 million last year. That paced well ahead of its overall U.S. spend, which increased less than 1% to $648 million last year, according to Vivvix and Pathmatics. McDonald’s has a goal to increase spending with diverse-owned media, production companies and content creators from 4% to 15%, and with Black-owned media from 2% to 5% by the end of 2024, according to a company statement. “McDonald’s believes that we have a responsibility and a unique opportunity to help drive change and foster an inclusive environment across our business,” according to a statement from the company. “That is why we’re proudly progressing towards our diverse-owned media ambitions. With guidance from our Diverse Marketing Advisory Council (DMAC), an advisory board that McDonald’s created to help advance these efforts, we’re continuing to work towards dismantling barriers to economic opportunity for suppliers and the communities in which we serve.” “We are committed to continue working toward forging new multi-year partnerships with diverse-owned media and production companies,” McDonald’s stated. Target While Walmart’s spending on Black-owned media soared in this year’s survey, Target’s plummeted 48% to $9.7 million from last year. Target’s overall U.S. spend declined 13% to $1.3 billion last year, per Vivvix and Pathmatics. But Target said its overall spending with Black-owned media isn’t in line with the Ad Age survey. “We’ve met our pledge to spend 5% of our annual media budget with Black-owned media companies every year since we made this commitment in 2021 and are on track to do so again this year,” said a Target spokesperson. Check out the latest Ad Age events and award programs PepsiCo PepsiCo showed a big increase in spending in Ad Age’s Black-owned media survey this year, up 95% to $12.6 million compared to last year. That was despite a 5% decline to $916 million in total U.S. spend per Vivvix and Pathmatics. Even so, not everyone in the business is pleased. Roland Martin, CEO of Nu Vision Media and a YouTube creator whose #RolandMartinUnfiltered daily digital show has 1.2 million subscribers, last year delved in great detail on LinkedIn and YouTube into his and other Black media owners’ inability, despite lengthy attempts and talks, to get ad dollars from PepsiCo. PepsiCo declined to comment on Martin’s statements. But a spokeswoman in a statement said: “While we don’t share details of our media spend for competitive reasons, we are pleased that the progress we have made in this space is acknowledged in your survey.” A person familiar with the matter said PepsiCo media buying policies exclude news, religious and political media channels, which would exclude much of Martin’s Black Star Network programming. PepsiCo doesn’t appear to have made a specific commitment to increase spending with Black-owned media, but in 2021 it did pledge to double spending overall with Black-owned suppliers, representing an incremental $350 million in spending. More beverage news from Ad Age Coca-Cola Rival Coke is pouring more money into Black-owned media, according to the Ad Age survey. Coca-Cola Co.’s spending among the respondents rose 40% to $9.9 million last year. That was despite a 4% decline to $624 million in overall U.S. spending measured by Vivvix and Pathmatics. This comes despite concerns expressed by respondents to last year’s Ad Age survey that the shift of the Coca-Cola account from IPG Mediabrands to WPP’s GroupM might lead to less spending. Coca-Cola doesn’t share specific numbers around media spending, a spokesman said, but added: “We continue to make progress on our diverse-media ambition, and we are confident that we will meet our goal to have Black, Hispanic and Asian American and Pacific Islander-owned media companies account for 8% of our total annual media budget in North America by the end of 2024.” The company also remains focused on “supporting an equitable media landscape by creating growth opportunities for minority-owned and led outlets beyond 2024,” he said. Eli Lilly Eli Lilly, the pharmaceutical marketer of Cialis, Taltz and Trulicity, among other drugs, hiked spending 143%, or more than double, to $3.1 million among respondents in 2023. This came on a 7% increase to $303 million in total spending, per Vivvix and Pathmatics. Eli Lilly did not respond to a request for comment for this story. Verizon The telecom giant had a high-profile pledge in April 2021 to spend 2% of its ad budget on Black-owned media. But it’s not clear where things stand given the departure last year of Verizon Chief Marketing Officer Diego Scotti and subsequent departures of some other key marketing executives, according to their LinkedIn profiles. Those include Tony Wells, the senior VP and chief media officer, who spoke at length about the company’s commitment to spending with Black-owned media during a 2022 appearance at the ANA’s Masters of Marketing Conference; and Rafael Rivera, senior VP of media and marketing effectiveness, who commented in last year’s survey story that partnerships with 20-plus Black-owned and operated media partners “help us achieve our business objectives.” Verizon’s spending in this year’s survey was fairly steady, down 2% to $6.3 million. That decline was less steep than its 6% decline to $1.7 billion in overall U.S. spending last year, per Vivvix and Pathmatics. A Verizon spokesperson declined to comment by deadline. AT&T AT&T had a big decline in spending among Ad Age respondents, down 30% to $3.7 million last year. That was sharper than the roughly 8% decline in AT&T spending measured by Vivvix and Pathmatics in the U.S. last year. AT&T’s U.S. measured spending totaled $1.2 billion in 2023. AT&T last year reported that it exceeded its goal to spend 4% of its media budget with diverse suppliers by spending 5% with them, of which more than 50% was with Black-owned media companies. But the company has not provided an update on its 2023 spending or future commitments, and declined to comment on the Ad Age survey results. A person familiar with the matter, however, said AT&T overall increased its investment in Black-owned media and programming by 30% last year. Diageo The spirits marketer was among the fastest-growing spenders in the Ad Age survey, up 423% to $4.2 million last year among respondents. That came as its spending overall in the U.S. rose 3% to $437 million, per Vivvix and Pathmatics. The company does not have a specific commitment to increase spending with Black-owned media, but has committed to increasing spending and investments with Black-owned suppliers generally. Diageo did not return a request for comment for this story. Others that stepped up Besides these bigger spenders, several marketers among Ad Age’s 100 Leading National Advertisers also stepped up spending considerably last year in the survey. They include Mars and Unilever, each of which more than doubled spending to $1.6 million and $777,000 respectively, and Meta (parent company of Facebook), which increased spending by 188% to $2.6 million. LVMH raised spending by 79% to $2.1 million, while Toyota increased spending by 64% to $867,000. While there’s some progress, Black media firms still face an uphill battle to bring in more brands. “People who have said they wanted to do this work have been in this work, and they continue to be our growth engine,” said a publisher executive. “But there are so many other brands that are not participating at all. “Companies that aren’t going to face the same court of public opinion just haven’t moved,” the executive said. “I also think the bigger guys have a better understanding of how diversity, equity and inclusion is still key to growing their business. When I’m in the rooms with them, they know DE&I is under attack and we have to figure out a way to stay safe, but they actually believe in the work and that they have to do it.” Contributing: Parker Herren

How Walmart, P&G, General Motors, PepsiCo and other big marketers are spending on Black-owned media

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