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Madison Avenue Accused of Racial Bias

Top News January 9, 2009, 12:01AM EST

Madison Avenue Accused of Racial Bias

The NAACP is heading a project to expose biases against African Americans in the advertising industry

New York may be the most diverse city in the world, but Madison Avenue is whiter than snow, according to backers of a new campaign aimed at improving hiring, pay, and promotions for African Americans in the advertising business.

The National Association for the Advancement of Colored People (NAACP) and the lawyer who spearheaded a massive class action against Coca-Cola (KO) 10 years ago are now targeting the advertising industry, citing "dramatic levels of racial discrimination" against African Americans throughout the industry, in such areas as incomes, recruitment, and promotion. Called the Madison Avenue Project, the plan, announced Jan. 8, is designed to apply public pressure on advertising agencies and expose what the NAACP and law firm Mehri & Skalet say are systematic biases against African Americans within the industry. The group's plan is to follow that effort with a lawsuit against major advertising groups and to seek class-action status.

"Forty-five years after the passage of the Civil Rights Act of 1964, [advertising] is still a closed society," attorney Cyrus Mehri said at a Manhattan press conference. "We're not going to let go until this industry makes a giant step forward." Mehri's Washington (D.C.) firm won race-bias settlements of $192.5 million from Coca-Cola in 2001 and $176 million from Texaco (CVX) in 1996.

Disturbing Results The project was launched with the release of a damning study of race and employment on Madison Avenue commissioned by Mehri & Skalet. Among the study's findings: African Americans in advertising make 80¢ for every dollar earned by whites in similar jobs. Meanwhile, only 5.3% of all professional managers in the advertising industry are African American, below their representation in other industries. In addition, the study says, too many are assigned to jobs related to their race, such as marketing products aimed at African Americans.

The findings dismayed Nancy Hill, president of the industry's trade group, the American Association of Advertising Agencies (AAAA). While pointing out she'd need to review the 83-page study more thoroughly, Hill said: "The numbers speak for themselves. It's disappointing, discouraging, and more has to be done. We will do everything in our power to make progress on this."

Heide Gardner, the chief diversity and inclusion officer at Interpublic Group (IPG), said in a statement that her firm had installed a variety of efforts to boost diversity, "but we're always open to dialogue with anyone that comes to the table with new solutions. By formally engaging our agency CEOs and linking diversity goals and compensation, we've made real progress, but we recognize that there's still much work to be done."

Glacial Progress The NAACP campaign isn't the first time the advertising industry has come under fire for discriminatory hiring practices. Long known for its clubby culture, Madison Avenue was targeted by civic groups as early as 1963, when an investigation by the Urban League of Greater New York pointed out that fewer than 25 African Americans—out of some 20,000 total employees in advertising—held "creative or executive positions." Most recently, a 2006 probe by the Human Rights Commission of New York found that only 2.5% of those advertising agency employees who made more than $100,000 annually were African American. The 2006 probe resulted in a settlement by 16 New York advertising agencies, in which they agreed to partner with the commission to increase staff diversity.

The agencies have worked to improve diversity over the years, as well. Many have created special scholarship or intern programs to increase the number of African Americans who enter advertising. Eager to show that increasing minority numbers is a priority, the agency conglomerates employ "chief diversity officers," with the latest appointment coming on Jan. 7 at holding company Omnicom (OMC). In May 2008, the 4A's announced a partnership with Howard University, in which the association committed $250,000 to found a national center that would provide professional development and leadership training to bring more black middle- and senior-level managers into advertising.

In framing their argument, the law firm and the NAACP commend those initiatives but said they focus too much on the idea that African Americans themselves are the problem and need training—not that there are systemic problems within the agencies themselves. In addition to paying African Americans less money, they say, agencies too often judge African Americans on their abilities to reach other African American consumers, assigning them racially focused work, and don't give them chances to work in creative or executive positions in general market advertising.

More pressure on the industry is coming ahead of the pending lawsuits. Next, the NAACP plans to reach out to major advertisers, which will be asked to pressure their agencies to increase African Americans' salaries and to hire more of them as managers.

Helm is marketing editor for BusinessWeek in New York .

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