By Rebecca Brown - 07/23/08 07:01 PM EDT
Lobbyists for television and radio stations that serve minority communities are welcoming a new federal rule that seeks to prohibit discriminatory advertising practices that some advocates say cost the stations hundreds of millions of dollars a year.
The Federal Communications Commission (FCC) rule, which went into effect last week, bans the use of so-called “no urban, no Hispanic” dictates. Under these directives, businesses discourage advertising agencies from promoting their products on stations with audiences that are primarily black or Hispanic.
Advocacy groups that worked with the FCC on this issue believe that compliance with the ruling will lead to a 5-to-10 percent increase in ad sale revenue for minority broadcasters.
Catherine McCullough, a lobbyist for the Minority Media and Telecommunications Council (MMTC), welcomed the FCC ruling as an important first step.
The group, however, continues to lobby the Federal Trade Commission to adopt a similar ban. That’s important because the FTC has jurisdiction over ad agencies, and its oversight is needed to prevent “no urban, no Hispanic” dictates from being used, advocates say.
McCullough said the FTC “has been very open to listening to what we’ve been saying.”
Should the FTC adopt similar non-discriminatory language, it will then have the continuing challenge of differentiating between the normal advertising practice of targeting specific demographics and racist behavior.
David Honig, counsel for the MMTC, acknowledges that it would make sense for an upscale hotel or retailer to target the audiences of classical music stations versus listeners of hip-hop or rap stations that serve inner-city communities, for example.
A problem would arise if those same hotels and retailers chose to advertise on country-western stations but not urban stations, because the incomes of the two relative audiences are roughly the same, Honig said.
He doesn’t believe enforcement of anti-discrimination laws will be difficult because advertising records are fairly transparent, which allows for oversight.
But the problem of discriminatory advertising practices is real, MMTC contends. Whistleblowers have accused advertising agencies of adopting “no urban” and “no Hispanic” dictates for years.
Adonis Hoffman of the American Association of Advertising Agencies (AAAA) believes the FTC is the right agency to address this practice because of its familiarity with the advertising industry.
“One of the hallmarks of the FTC is its ability to enforce its policies. I don’t see why that wouldn’t apply to this particular issue,” Hoffman said.
The FTC declined to comment on its position or any work it has done with advocacy groups.
Sherman Kizart, a vice president and director of urban marketing for Interep, an advertising and marketing company, worked closely on the FCC ruling and has been in contact with groups currently lobbying the FTC.
He estimates that minority-owned radio stations lose hundreds of millions of dollars in revenue due to “no urban, no Hispanic” dictates every year.
Advocates who work on this issue said the practice has been around for decades. It wasn’t until the late 1990s that the FCC began conducting studies into what effect the discriminatory policies had on revenue for minority-owned or -targeted broadcast stations.
The FCC found that the practice is widespread: Ninety-one percent of the minority radio broadcasters who participated in the study said they had come across the practice of “no urban” and “no Hispanic” directives.
The studies found that part of the problem was that ad agency representatives are predominantly young, college-educated white women who may not have been exposed to other groups.
Honig acknowledged the phenomenon, saying that women began dominating the advertising industry in the 1970s. The ad agencies were among the first companies to welcome them.
But Honig contends the issue is not the prevalence of women, but the lack of multicultural education in communications studies programs.
Kizart said the FCC rule has already had a positive effect. Advertising agencies are now more aware about where and why they are choosing to place ads. However, Kizart believes the industry has more work to do.
“This is a marathon, not a sprint,” he said. “This is discrimination, plain and simple. We’ve made great headway in the past six months and we’re optimistic we’re going to make more, but this practice is not going away soon.”