Are Ad Agencies Marginalizing Creatives of Color?

For instance, Executive Order 13170 instructed government agencies to "take affirmative action" to "aggressively" contract with businesses that have experienced "historic exclusion and underutilization in Federal procurement" at the rate of at least 23% for small businesses and at least 5% for minority-owned. It even dedicated a whole section to advertising:

"Each department or agency that contracts with businesses to develop advertising for the department or agency or to broadcast Federal advertising shall take an aggressive role in ensuring substantial minority-owned entities' participation…in Federal advertising-related procurements. Each department and agency shall ensure that all creation, placement, and transmission of Federal advertising is fully reflective of the Nation's diversity. To achieve this diversity, special attention shall be given to ensure placement in publications and television and radio stations that reach specific ethnic and racial audiences."

So, it would be reasonable to expect EO 13170 to benefit Black-owned advertising agencies and Black media. As it turned out, not so much. In 2007, the Government Accountability Office (GAO) found that, from 2001-2005, the Department of Defense (DoD) spent $2.7 billion on advertising but only 1.8% of it went to minority-owned firms who were paid, on average, nearly 84% less than white-owned firms (GAO-07-877).

There are some reasonable explanations for this. First, bidding for a DoD contract is a long, complex and grueling process. As such, larger and well-established ad agencies may be better positioned to dedicate the necessary time and people power to the task. Second, the DoD probably prefers a streamlined process where large, "prime" vendors, though white-owned, would compete for the account by showing how they could still help the DoD meet their small business and minority-owned compliance goals by bundling underrepresented subcontractors into their bid.

For instance, in 2017, after 12 years of working with McCann, the U.S. Army put their advertising account up for review. This presented a huge opportunity for the rarest of prizes in the advertising world: a lucrative ($4 billion), long-term (10 years), and recession-proof (government funded) contract. Since the competition would be fierce, Doyle Dane Bernbach (DDB), an agency famous for irreverent advertising like Volkswagen's "Think Small" campaign, brought on Joe Anthony(founder and CEO of Hero Collective, a small Black Owned Creative and Digital Innovation Studio) based on his experience working with two of the Army's previous ad agencies, McCann and Leo Burnett.

According to Anthony, DDB baited him with a "teaming agreement" that would make Hero a preferred partner if they won the Army account and, in exchange for creative and strategic support, would guarantee Anthony and his team substantial assignments and thereby help put DDB in compliance with Federal requirements to include small and minority-owned businesses. The Army review took two years and was contested by McCann and WPP, but, thanks in part to a pitch deck which included Anthony's concept of "the real life Iron Man," DDB won the account.

But then came the switch.

Turns out that, during the two-year pitch process, DDB never disclosed Hero to the Army. And, once DDB won the account and became the "prime" agency, they rescinded the deal points in their teaming agreement and demoted Hero to an at-will subcontractor. Two years of spec work. Up in smoke. And, to this day, DDB hasn't paid Anthony a dime.

DDB fooled the Army by offering the temptation of a one-stop shop -- a "total market" approach where they would bake in the diversity and minority-owned business requirements by offering to subcontract to smaller multicultural agencies (likely within their own holding company) and even the occasional independent like Hero. But they didn't really mean it. And they certainly weren't going to empower a potential competitor. They simply assumed the Army wouldn't check and that Anthony would be too grateful for the crumbs and too scared to demand what he was promised lest Hero be blacklisted from future subcontracting opportunities.

But what they didn't count on was a "real life Iron Man." Anthony suited up with lawyers and is now taking DDB to court for $100 million. He's fighting for what he's owed and on behalf of all the Black and brown agencies and creatives that have been marginalized for years by white-owned agencies and their holding companies' total market bait and switch trick. So, if he wins, Anthony will be a real hero to many.

After all, it was DDB's own founder, Bill Bernbach, who once said "a principle isn't a principle until it costs you money." All those executive orders meant what they said. Time to pay up.

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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.