Black-owned agencies are still frozen out of the biggest brand accounts, say founders
Despite large investments by big brands in multicultural marketing, Black agency founders say they’re not invited to compete for general market briefs. Though client referrals provide a way around, systemic change is required.
After 2020, enthusiasm for working with Black-owned agencies has ebbed among marketers, agency founder say / Adobe Stock
Indie agencies hoping to scale up know that winning larger accounts from advertisers is crucial. The kind of revenue that just one market-wide brief from a big brand brings in can provide the investment required to take a business to the next level.
But Black agency founders tell The Drum that they’re finding themselves shut out of opportunities to compete for those larger general market accounts – and that CMOs are restricting them to multicultural briefs directed specifically at Black audiences.
“It’s quite common for Black-owned agencies to get pigeonholed into multicultural business,” says Shannon Jones, co-founder of creative agency Verb, while Chris Crawford, president of Elite Media, tells The Drum: “There is a limit to what even crosses your desk – we’ve been typecast.”
For Joe Anthony, founder of New York’s Hero Collective, that restriction puts a brake on the business growth of Black-owned agencies. His agency’s clients include Lenovo and Shell’s gas station business – both general market accounts – and pharma company Janssen. But general market briefs make up only 50% of the roster. “In order for us to survive we have to force brands to look at us beyond specialism and start looking at us as generalists.”
Back in June, Stellantis – the huge carmaker behind marques such as Fiat, Chrysler, Dodge, Ram and Alfa Romeo – hired its first-ever agency-of-record focusing on Black consumers, Kentucky-based TKT & Associates. (Despite McKinsey estimates Black consumer spending on cars in the US will reach $190bn by 2030, the only other major carmaker to have appointed a Black-owned agency in an AOR capacity in recent years is Hyundai’s North American business.)
It’s a considerable investment from the automotive firm – so much so that TKT might establish a Detroit office to service its new client better and in the long run might provide an opportunity to access larger accounts within the Stellantis umbrella. Hero Collective, meanwhile, managed to spin up a niche brief with Mattel into a general market account says Anthony.
At full-service agency and research firm A-B, founder Andre Banks says his business has managed to expand this way. The agency employs around 60 people and has worked with third-sector organizations such as the Legal Defence Fund and the Ford Foundation, as well as with mass-market brands such as film studio A24 on its marketing campaigns for Everything Everywhere All At Once. “We’ll start in one lane and then expand,” says Banks.
A recent example is its work for Naral, one of the largest reproductive rights organizations in the United States. “We started doing a small ad series focused on younger people, primarily people of color, in that moment when Roe v Wade was being overturned. It has grown into us helping them with their rebrand for Naral nationally and then also helping them like launch a new national campaign targeting Gen Z people across demographics.”
For Yadira Harrison, co-founder of Verb, this is not a path that is always open, however. “We hope it will be and we take those projects thinking they could lead to something bigger, especially because we do so much work that might be considered part of the general market space. But it doesn’t always translate.“ Her co-founder Jones (below) adds: “It’s very rare that it ends up going beyond that. You end up staying in one lane.”
Jeffrey Bowman, co-founder of Reframe and a veteran of Dell, Sears, Miller Coors, Ogilvy and Whirlpool, says that while Stellantis’s investment itself was a positive, it highlighted the limitations faced by Black-owned agencies in the market.
“The modern stance would be an approach from a cultural standpoint, not just ethnicity. But agencies like TKT&A will only get the ethnic spend. They got the budget – and that’s nice... that’s great, actually – but why didn’t they get an opportunity to get the entire budget?
“We should be allowed to compete for the total addressable audience as well as the total budget. In a modern approach, given my background and the brands I’ve worked with, I should get an opportunity for the entire budget.”
Following the rise of the Black Lives Matter movement in 2020, many US brands moved to direct advertising dollars towards Black audiences. Much of that work came to Black-owned agencies, too. But for the most part, that didn’t see more Black-owned agencies granted access to larger general-market briefs. Instead, Hero Collective’s Anthony says, investment was limited to multicultural briefs and project work. “We may have seen a significant addition of money into the market, but it was more project work that wasn’t sustainable. Our relationship with Mattel was something that was cut short because it wasn’t underpinned by a real strategy.”
At Verb (which recently gained plaudits for its own Mattel-adjacent work as the agency behind Airbnb’s real-life Malibu Barbie Dreamhouse), Harrison says that the agency received more inbound interest but not much of a lift to its bottom line. “As more brands felt the pressure to be more inclusive and diverse with their agency partners, there was definitely more visibility... I would say we were probably reached out to more about participating in RFPs and pitches, but I don’t know that that significantly translated to more business.“
Advertiser enthusiasm has ebbed since 2020, says Anthony. “It has waned considerably. It’s not as predominant in the social discourse right now… most brands make commitments post-crisis in a very reactive way, not underpinned by strategic work. Black agencies are usually the last to be hired and the first to be fired.”
Looking ahead, the changing consumer demographics of the US mean that it will make less sense for brands to treat Black consumers (or Asian or Hispanic consumers for that matter) as an afterthought or satellite to their primary customer base.
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A-B’s Banks notes that “people of color are the fastest growing consumer segment in the US,” but that many marketers “when thinking about growth strategies haven’t thought about those communities in great detail.” Bowman agrees, saying: “You can no longer afford to just rely on the base of consumers that got you to where you are now.”
For Anthony, the problem of access could become an existential one. Lack of scale or a holding company safety net are perennial barriers to indie agency growth. This additional obstacle means it’s harder for Black-owned agencies to vault those barriers and harder to shake off rough economic weather. “It’s harder to sustain yourself without scale.”
The power to change this situation rests with marketing decision-makers, he says. “The onus is on brands – brands have to be more cognizant in policing these things and they have to understand the plight and the challenges that agencies like us face.”
Referrals and procurement
Harrison and Jones, who both enjoyed long careers client-side before founding Verb, say the agency would likely be “two or three times bigger” if access to general market briefs was not restricted. “We’ve had a lot of success, but the scope and scale of the retainers and project fees are significantly higher,” says Harrison. ”We’ve come from that world, so we know what those used to look like.”
They tell The Drum that they largely avoid participating in competitive pitches. Instead, they have long relied on client referrals to gain new accounts and grow Verb. Harrison explains: “If this CMO asks another one, ‘Who would you recommend?’ There’s inherent trust built in. So we start at square two or three; it’s a very different conversation. And every time we have [business] that didn’t come from that path, we’ve had to backtrack into the ‘prove it’ conversation.
“Referral has been huge for us. Even just the mental load of not being in that situation has been critical over the years.”
Client referrals have also helped Elite Media land new business outside the closed-off world of pitching. Recently, the balance between general market and multicultural accounts on the company’s roster shifted – and for the first time, 60% of its clients come from the former category.
“That’s been a shift due to some great work we’ve had with a couple of clients,” explains Crawford. ”Through some time with them, nailing some assignments, they began to see us as Black-owned but not Black only. We don’t jump into RFPs. We’re not blindly chasing pitches.”
He argues that the biggest obstacle to Black-owned agencies accessing general market briefs is structural rather than individual prejudice. “Their attitudes are open, but some of their systemic processes and practices are not. You might have a decision maker who wants the people working on my business to reflect the America we’re living in. But has your procurement process caught up to that? Or are they still looking for the same things they were looking for years and years ago?”
In practical terms, that might mean altering the initial requirements set for competitive pitches and reviews so that smaller, newer companies can compete. Jones says that Verb, which has 40 staff, has sometimes been shut out of accounts because of its size. “Is it sometimes our size? Sure, but it’s always someone’s first time to do something.”
Crawford says this is a change that brand leaders can effect. “Courage is required to do something a little bit different. Courage is required for you to wonder if solutions can come from unusual suspects that challenge your own lens. It’s definitely about systemic practices and policies that need to be examined, but also courage in the moment.”