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Implementing 4As’ Recommendations

Ad Agencies Expected to Adopt Non-Discrimination Policy Recommendations

More ad agencies are expected to adopt a ban on discrimination in choosing which of all print, broadcast and pay-TV and online media to select in buying ads for clients. Some agencies large and small are in the process of implementing guidelines issued Oct. 26 from the industry’s main association. Others are likely to sign onto the guidelines. Many agencies already have policies in place to bar discrimination in ad purchases, according to industry executives we interviewed about the American Association of Advertising Agencies’ guidelines (CD Oct 27 p8). The rules, adopted four years after the FCC banned radio and TV stations from accepting contract terms that bar ads from being shown to urban or to Hispanic audiences, don’t apply to advertisers.

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It’s increasingly made business sense for ad agencies and the companies they represent to pick outlets for commercial announcements based on the audience they reach, and often to target minorities, industry executives said. They said the 4As guidelines, issued after about a year and a half of work by the association, in part cement what many agencies already were doing. Major advertisers too have spent considerable time in recent years discussing how to target fast-growing minority populations, said executives of the Association of National Advertisers (ANA). Such efforts extend across all media, executives said.

It may take time to implement the 4As recommended practices, FCC officials watching the process said. The guidelines (http://xrl.us/bmg5m8) from the group’s Media Policy Committee recommend training employees in how to not discriminate in choosing vendors, to “grant equal opportunity to all such Vendors,” and to set up a complaint review process for anyone who believes they've been a “victim of discriminatory buying practices by Agency.” Several major agencies said they already have non-discrimination policies. There’s also optimism among ad-agency CEOs who worked on the 4A guidelines that many other agencies will adopt the proposals.

The recommendations have been “very well received” by members of the 4As, said Media Policy Committee Chairman Bill Koenigsberg: “Some agencies I guess had been doing a better job than others.” He has made “significant” progress in getting the CEOs of ad agencies to back the 4A’s standards. Horizon Media, where Koenigsberg is CEO, has a review process to handle any type of complaint, he said. Employees in each area of ads, such as national TV and in digital media, will be the “first access point” for a complaint, Koenigsberg said. If the issue isn’t resolved, a “very senior level” group of about five executives “will be available to meet with anybody who still feels after proper explanation they're still being discriminated against,” he said.

For informing employees of Horizon Media about the policy, “it’s an education about what discrimination means, about how we communicate to all vendors that we deal with,” Koenigsberg said. “It’s an education about open access, it’s an education about the FCC guidelines and rules.” The training is for “anybody who comes into our company, as part of their orientation,” he said. Horizon’s employee handbook discusses the policy, and those newly hired will get a document explaining it, Koenigsberg said. His company manages more than $3 billion in ad buys for clients, who have included NBCUniversal (http://xrl.us/bmjddu).

Employees of Interpublic Group already “undergo diversity training,” a spokesman for the owner of major ad agencies said. “They sign a code of conduct annually acknowledging that promoting diversity within Interpublic and within and among our business partners is a fundamental principle of our organization. And that’s been the case since 2006.” The company’s supplier code of conduct, which took effect in July, is at http://xrl.us/bmjda5. WPP, another owner of many large ad agencies, also has a code of conduct, a spokesman said. Agencies that are part of the company “follow this code in their choice of media vendors and we feel that it complements the 4A’s recommendations entirely,” he said. The code says employees will give “appropriate consideration to the impact of our work on minority segments of the population, whether that minority be by race, religion, national origin, colour, sex, sexual orientation, gender identity or expression, age or disability."

ANA for years has worked with members on multicultural advertising, said executives of the group. “It’s not just for radio, it’s not just for TV. In these meetings we talk about how to try to reach all audiences,” Executive Vice President Dan Jaffe said. “We are now living in a multicultural society, and some groups that once were considered relatively small minority groups are now the fastest growing part of our population,” so such efforts make business sense, too, he said. “The ad community” across the board through groups including the ANA and 4As has been “spending an increasing amount of time focusing on this issue,” Jaffe said: “They want to make sure that their members are being as effective as possible” at reaching all types of audiences. ANA members include Apple, AT&T, Google’s DoubleClick, Intel, Motorola Mobility (being bought by Google), Sprint Nextel and Verizon (http://xrl.us/bmjdd4).

4As members of all sizes are interested in taking up the non-discrimination policies, said Kizart Media Partners Managing Director Sherman Kizart. He worked on the initiative and has previously worked with FCC members including Robert McDowell on the issue. Koenigsberg “is making significant progress in getting other ad agency CEOs to sign the CEO pledge around it,” Kizart said. “I'm equally encouraged with the conversations I am having with other CEOs and other ad buying agencies of their commitment to adopt this process,” he added. “But it won’t happen without continued vigilance.” It’s in the “interests” of ad-agency clients “to be inclusive” in purchasing, Kizart said: The “historic policy was well worth the wait,” even though he'd have liked it to have come about sooner.

There’s been a steady “uptick in awareness” among ad agencies of how to avoid contracts that have discriminatory clauses, since the commission’s 2007 non-discrimination rule, said Minority Media and Telecom Council Executive Director David Honig. He said also raising awareness was an incident in 2009, when BMW’s Mini division canceled plans by the carmaker’s ad agency that presumed minorities couldn’t be tempted to buy the cars (CD Sept 18/09 p15). The firing of that ad agency got “other agencies’ attention,” Honig said: “Now there’s a route to go, within the ad-agency world itself, and this can only be helpful” with new guidelines. Discrimination particularly in radio that MMTC has pegged as costing minority broadcasters $200 million a year, based on research from 2002, is “probably still a fairly good estimate,” Honig said. “This didn’t all suddenly go away because of the Mini Cooper case.”