by Dan Perkins

Diversity in advertising was a hot topic in 2006, especially among New York advertising agencies.  In June of 2006, the New York City Human Rights Commission (HRC) subpoenaed 16 agencies and demanded that they givan an account for their lack of success in attracting and retaining talented African Americans.

Over the last 5 years, African Americans have made up only 3 to 6 percent of the total labor force in the advertising industry in New York, according to statistics provided by the Bureau of Labor.  That range is only a few percentage points higher than the level reported in 1968, when African Americans accounted for 3.5 percent of the industry. 

The HRC, which is troubled by the fact that so little progress had been achieved, wanted to know how the agencies were going to deal with diversity in the future; and the commission wanted the agencies to make their results transparent.

In September of 2006, 11 agencies signed binding agreements, punishable by fines, to increase the number of minorities in their management ranks - with a special focus on African Americans.

In early December, several experts in advertising, media and education gathered at the invitation of the Northwestern University Alumni Association in New York to discuss the lack of diversity among New York ad agencies and strategies that agencies are adopting to rectify the situation.

The panelists were Heide Gardner, vice president, diversity initiatives, Interpublics Group of Companies; Dr. Geraldine Rosa Henderson, associate professor, Northwestern University/Medill IMC Program; Phyllis K. Rosen, director of human resources for North America, Ogilvy & Mather (O&M); and Richard Wayner, CEO, the TRUE Agency.

The session was moderated by Alison Fahey, editor of Adweek.  Fahey began the discussion by asking the panel to explain why African Americans are so poorly represented in the advertising industry. 

Although none of the panelists provided a concise answer, each offered valuable insights to the problem.

A Dearth of Representation at the Upper Levels

Gardner was the first to respond to Fahey’s question; and immediately acknowledged that the answer to question is a complicated one.  To provide some perspective, Gardner said that there was only one African American manager in the advertising agency business in New York City in 1968.  Today, there are approximately 800 African Americans in the “officials and managers” category, according to data cited by Gardner. 

While the increase over the past 35 years demonstrates some progress, Gardner noted that it does not necessarily equate to a more open and inclusive industry.

“I would feel very safe saying that probably 60 to 70 percent of those people actually work for African American agencies,” Gardner said to an audience comprised primarily of advertising professionals regarding  the 800 African American managers currently in the industry.  Gardner conceded that over the past 35 years, “at least a couple of thousand” African American managers have come into major agencies; but she credited the influx to programs such as the 4-As, the Minority Advertising Internship Program, and other initiatives designed to draw African Americans and other minorities into the industry.

Gardner said the problem is most evident at the very top ranks of major agencies.  She noted that with the exception of Renetta McCain, CEO of The Americas Starcom MediaVest Group in Chicago, and Ann Fudge who was chairman of Young and Rubicam Brands, the highest ranking African Americans in the advertising industry are leaders of multicultural shops.

Gardner said the short answer as to why so few African Americans are in managerial positions in the industry is that the agencies have failed to retain and develop African American talent. Gardner then stated the root cause of the retention and development dilemma remains problematic.

Retention is a critical issue because many successful African Americans do not perceive as many opportunities inside major agencies as they do in more entrepreneurial settings.  Gardner said that entrepreneurial individuals often leave to set up their own shops, or join existing multicultural firms where they can make meaningful and dramatic contributions.  Gardner noted that sharp people often go to the client side where salary and environmental considerations are more attractive.

Competitive Demand for Top Talent

Richard Wayner brought an interesting perspective to the discussion. Unlike many of his peers, Wayner worked for Goldman Sachs before starting his multicultural agency.

He told the audience of advertising professionals that he left the financial arena for the ad industry because he believes diversity is creating a global opportunity.  He cited a statistic claiming that roughly 150 million people live outside of their country of origin worldwide, and that within 20 years, the number will grow to 1.5 billion.  “Diversity is going to be a global phenomenon that countries are going to be dealing with – it will not be just a U.S. phenomenon,” said Wayner.

To reinforce his point, Wayner referred to the Billboard Charts and several other social indicators that suggest cultural diversity is moving at a significantly faster rate then demographic diversity.  Wayner, who also launched a television network in Paris, is keenly interested in how cultures impact one another.

Although Wayner is convinced that his agency offers clients unique and valuable insights to the global marketplace, he admitted that he also faces retention issues; but added that other multicultural agencies pose the greatest challenges.  “In advertising, in general, there’s high mobility, high turnover,” said Wayner.  “We try to do interesting things with respect to sharing equity or profits with the leaders of our agency - in order to improve retention,” but Wayner acknowledged that retention remains an issue for his agency.

As far as finding solutions to the lack of African Americans among New York agencies, Wayner said majority agencies need to make investments in people and companies; and they need to bring more African American into their fold and build them up.

Fahey responded to Wayner’s remarks by asking whether general market agencies could recruit and retain a person like Wayner.  Fahey turned to Phyllis Rosen, who  regularly addresses employment issues, for answers.

Challenges Faced by Agency HR Departments

Rosen acknowledged that her agency probably could not attract a minority individual of Wayner’s caliber.  She said that future employment within the advertising world would probably be driven by a different set of dynamics, such as alliances or associations.  She told the audience that about five years ago, O&M formed an association with smaller agencies called “The Syndicate.” The goal of The Syndicate was to tap into very senior minority talent from around the nation.  Although The Syndicate no longer operates formally, Rosen said a loose affiliation continues.  She suggested that initiatives like The Syndicate might be a model for the future.

“We feel that diversity has been part of the fabric at Ogilvy, now we need to be more aggressive about making it front and center; and that is what we are doing.” declared Rosen. “But, we don’t want it to be about counting noses; we want it to be about making each individual person count.”

As the discussion continued, it became apparent that the recruitment and retention of minorities is complex and multi-dimensional.

Turnovers also contribute to the dearth of African Americans in more senior positions within the advertising industry.  Rosen said that she didn’t have any big ideas or observations for the industry because she has narrowly focused on O&M; however, she shared some recent data indicating that over the past two years, African Americans have had the lowest turnover of any demographic group currently employed at O&M.  While the findings were too recent to reveal causes, Rosen assured the audience that O&M's diversity consultant will host a series of focus groups to determine the underlying cause.

Rosen acknowledged that there are probably invisible barriers at O&M, but said she hopes the focus groups will reveal what  they are and where they exist.

HR professionals are challenged to not only recruit talented minorities, but also assure them of supportive work environments.  Rosen shared her own observations that talented minorities – especially on the creative side - prefer to work on a variety of products for a variety of clients, and are not necessarily interested in being in one agency for an extended period of time.

“For us to tap into the best talent around, we’re going to need to be more creative as to how we see the employment contract; and it’s not necessarily going to be ‘We’re hiring you, you’re going to be on our payroll’,” said Rosen who, after offering this insight, admitted that such creative approaches might be difficult in today’s highly regulated business environment.

Rosen also admitted that one of her most significant challenges involves finding a way to stop other agencies from the raiding O&M’s current pool of minorities.

Seeking Models for Success

Instead of focusing on the historic factors that have caused the dearth of African Americans in the advertising industry, Henderson urged the panel to look more closely at the business model for diversity in advertising.  “Yes, there’s a social model, and yes, there’s this legal model; but I’m pushing the business model.  Market forces dictate that companies and agencies need to diversify.  They need to diversify their thoughts,” said Henderson who warned that companies and agencies that fail to diversify will not be able to keep up in the future.

Technology was cited as one of the external forces changing the way the ad industry conducts business.  Henderson noted that technology has facilitated the spread of hip-hop culture throughout the world, and concluded, “It’s really important that we get a handle on (technology) and that we move forward very smartly because otherwise we’re going to lose out,” Henderson asserted.  “I tell my students and my clients, you have to take a look at the diversity of the marketplace because it is going to dictate who you hire and how you hire, and how you proceed.  It’s very simple.  How you do it is not so simple.”

When it comes to linking work force diversity to success in communicating with diverse markets, Henderson said that most firms do not capture data in ways that help them make that link.  She cited IBM as an exception.  “IBM is phenomenal,” exclaimed Henderson.  “They have made this amazing connection between the marketplace and the workplace and they have really made it work for them.”  She concluded that it is an important issue for the advertising industry - one that needs to be quantified more extensively.

The two agencies represented by panelistsl had very different results to share regarding their progress in recruiting more African Americans.  O&M reported a modest trend upward in the number of senior African Americans found among its ranks, while Interpublics made progress at the junior level.  “Over the last three to five years, we have really improved at the junior level,” said Gardner.  “We’re in the neighborhood of 26 percent people of color at the junior level. Again, it’s the retention and development issues that we’re struggling with,” she continued.

Race and Branding

When Fahey asked the panel to explore the implications of not embracing diversity, Henderson said the consequences will be agencies will make mistakes in developing and delivering their messages.  She cited a recent holiday commercial that featured an African American family having a wonderful moment putting up a Christmas tree.  She said she was shocked to see the family place a white angel on the tree.  While she acknowledged that many African American families have white angels, she would have advised the agency and the client to have used a black angel or a star. 

“That’s something where if you had had black people working on the agency side, and black people working on the client side, they would have been able to tell you (to) go with the star,” said Henderson.

Wayner simplified the matter by stating, “The business risk is that you lose your audience.  People will go where they can find more relevant communication.  That’s the long term business risk.”

Fahey questioned whether Henderson’s remarks meant that only black people could make effective ads for black audiences.

“I’m not saying that,” Henderson responded.  “I truly believe that you don’t have to have people of that group market to that group.  That would suggest that the only reason that you would have African Americans in your firm is to market to African Americans; and that is absolutely not right, so I don’t believe that.  But what I do believe is that no matter who it is you have in your marketing group, they need to be steeped in that culture - that’s a very important thing to understand and I think that’s the part that has been missing.”

Henderson then explained the concept of coding in communications.  “There’s a sort of unspoken language that people know that gets embedded in the messages; and if you’re not aware of that, you’re not going to pick up on that,” said Henderson.  "But when the receiver receives the message, they’re going to know that communication; and they’re going to say, ‘They didn’t put in the special code.’ ... That’s the kind of thing that’s hard to pick up over night.  You really need to have someone that has studied that culture.  Do they need to be a part of that culture?  Absolutely not, but it tends to make it faster for them to pick it up.”

Twenty years ago, many general market agencies were interested in hiring  African Americans specifically to help them address African American markets, Gardner recalled for the audience.  She said many of the agencies hired African Americans right out of college and placed them within their organizations to focus on multicultural business.  Gardner noted that these efforts generally failed because the people hired often lacked the marketing experience to make immediate and meaningful contributions.

Gardner cautioned agencies not to hire with the specific goal of steering African Americans to multicultural business.  “(Diversity) is a business issue for all the reasons already articulated, but it’s also a business issue because this industry is so insular.  There are very few sources of new thinking and new ideas," noted Gardner.  "If you’re following what’s happening in the creative economy, and you know the importance of innovation, then you know that you need people from a variety of cultures, and a variety of educational backgrounds, with a variety of expertise.”

Rosen said the O&M is trying to define diversity in a much broader way - with a goal and strategy - and something that is an inseparable part of the culture of the agency.  “The agency is seeking a diversity officer who will direct the efforts, but the goal is to make diversity a seamless process within the agency,” said Rosen.

Recruiting for Diversity

Fahey pressed the issue of recruiting for diversity even further.  “It seems to me, that we have to expose kids to the industry before we start to hire them,” asked Fahey.

Rosen said O&M has a two-tiered approach to diversity recruiting.  According to Rosen, O&M is looking at transferable skills among more senior managers on the one hand and has established a junior marketers program with a high school in the Bronx to seed interest among the next generation of potential advertisers.

Rosen told the audience that O&M’s co-CEO, Bill Grey, has been actively involved in identifying diversity strategies that work.  She added that Grey has observed that firms that do well with diversity recruiting efforts tend to have people of color in senior positions, which made for more welcoming and approachable work environments for minorities to enter.  Rosen said O&M recognizes a need to pay more attention to recruitment.  “The agency has hired a couple of search firms that specialize in diversity recruitment, and requires all its search firms to bring a diverse pool of candidates.  The firms are evaluated quarterly across a performance matrix,” said Rosen.

While O&M is taking steps to expand its recruiting efforts, Rosen said the agency will not relax its standards to achieve greater diversity.

Wayner suggested that holding companies become more aggressive in establishing executive exchange programs that bring African Americans from multicultural subsidiaries into the parent organizations' leading agencies.

Gardner agreed, but said that moving people across agencies requires trust and collaboration.  “We’re actually doing that with a two year fellowship program that we’ve had going now since 2003," said Gardner.  "So far, we have had 25 people in the program.  Our fellows rotate around agencies.  They spend about six months at a time in an agency – (serving in account management, creative, interactive, experiential marketing positions).  They’re not focusing on just one advertising-marketing discipline.  It’s been a very success program."

Gardner said the program has increased retention three times greater than what it would have been otherwise.

“(Our fellows) are developing at an accelerated pace,” said Gardner.  “It’s helping us to hold on to them longer.  By the time they get through this program, they have had a mentor who has been with them the entire two year period."

Garnder told the audience that at every agency, the fellows have a coach.  "The people who are involved are also learning about best practices," said Gardner.  "Every manager, HR manager, and mentor goes through diversity programming and training so they know each other well and are able to make the most of the opportunity.  We look at it as a pilot, and so far, it’s working.  At the holding company, we’re supporting our agencies with executive search services to help them hire more strategically – even though we hire just-in-time.”

Fahey noted that one agency had made seventeen offers to African American candidates over a two year period, and that all seventeen offers were turned down.  She stated some of the reasons why candidates didn’t accept the offers included concerns that the agency was not committed to diversity, and that candidates did not want to be “the only one” or a statistic that was reported to the HRC.

Henderson told the audience that organizations that have had long term success with diversity tend to bring in significant numbers of diverse people at one time.  She referenced the University of Alabama and the way the university successfully integrated its football team.  Behr Bryant was the head coach at the time, and Henderson said Bryant decided to bring in a group of African Americans all at once so they would not be isolated, or feel different, and so they could more easily become part of the team.

While this was an approach Henderson encouraged New York agencies to adopt, she wondered how her fellow panelists recruit for the various disciplines within industry.

Rosen said agencies generally go to creative schools to source creative talent, but said agencies need to be more creative in how they go after creative talent.  She said O&M has stronger minority numbers in account management and interactive positions than on the creative side, which she said is representative of the industry.  Rosen acknowledged that her agency has not hired people who have links to networks that know where emerging minority talent is located.

Gardner added that the business model of the industry does not lend itself to extensive training and development programs - in part, because agencies are very small businesses, many agencies employ 50 people or less. “Presently, most agency don’t hire until they have a new piece of business or until there’s an opening; that’s part of managing the cost,” said Gardner.  She acknowledged that many agencies are also not structured to manage a large influx of new talent – including African American talent.  “Most agencies are not structured that way.”

One attendee asked why agencies fail to look aggressively for former employees, which is process called “win-backs.” Rosen said that O&M does that.

Working with Affinity Groups

While many large corporations have established affinity groups that provide networking opportunities for distinct populations within the organization, it is not common within the agency arena.  Gardner said that Interpublics has created a small affinity-style group through their fellowship program, but indicated that company is currently working to create an inter-agency affinity group for all employees of color.  She said the holding company facilitates such efforts, which helps advance the process.  Gardner admitted it would be more difficult for smaller firms to attempt to work with affinity groups since many are not rich with diversity.

Wayner believes there is an immediate opportunity for holding companies to create diversity think tanks that can explore ways to increase the ranks of African Americans in the industry.  He does not believe it is necessary for agencies to raid other agencies in order to bring experienced African Americans into their folds.

Gardner noted that Michael Roth, chairman of Interpublics, chairs an inter-agency diversity council comprised of the CEOs of all of the agencies held by Interpublics.  Gardner added that Interpublics' board of directors is focusing on governance and accountability issues as they relate to diversity, and in February 2007, the board will host its first diversity review. 

The panel discussion concluded with audience members asking questions, offering comments and sharing their experiences with diversity in advertising.  One of the most insightful comments came from Dr. dt ogilvie, associate professor of business strategy at the Rutgers Business School, who said, “What we know from the evidence is that just putting minorities or diverse people together is not sufficient. When companies do that, performance suffers.  One of the things companies need to know is how to manage a diverse group of employees and how to create an atmosphere in which diversity is valued, where being different is not seen as a negative, but as a positive and as a stimulus to creativity.”

The End