Statement of Adonis E. Hoffman, Esq., to New York City Council,
Commission on Civil Rights, Sept. 26, 2006
Chairman Seabrook, Members of the City Council,
Good afternoon. My name is Adonis Hoffman. I am Senior Vice President and Counsel for the American Association of Advertising Agencies, also known as the 4-As. I also serve on the board of the Center for Responsible Media and Marketing, which is a think tank focused on the issues of responsible media policies and practices, and formerly on the board of the Black Education Network, a New York-based broadcast network focused on delivering quality content to African Americans. Before this, I had the honor of serving as a Senior Counsel to the Chairman of the Federal Communications Commission, where I headed up an inter-agency task force on advertising practices.
I appreciate the opportunity to testify at your hearing today on this important topic. My testimony today is in two parts. Part one is on behalf of the American Association of Advertising Agencies, which was invited to testify at the hearing. Part two is in my private capacity as a communications lawyer who has been involved in this issue for the last ten years.
I am joined at the table today by the Honorable Victor Frazer. Mr. Frazer is a former Member of the U.S. House of Representatives. He is a lawyer, and has been one of the distinguished outside advisors to the advertising industry on this issue.
PART I—On Behalf of the American Association of Advertising Agencies
1. Headquartered in New York, the 4-As is comprised of over 450 advertising agencies and media agencies throughout the country. These large and small agencies are responsible for approximately 75 percent to 80 percent of the advertising placed in all media in the U.S.
2. Several of our member advertising agencies and media companies received invitations to testify here today. Those agencies asked that the 4-As, as the industry trade association, collate their testimony into written form and submit it for the record on their behalf. And we are happy to do that.
3. As has been well-publicized in the media, 16 advertising agencies in New York signed individual agreements with the New York Commission on Human Rights to bolster employment diversity and the numbers of African Americans within their middle and senior ranks.
4. These agreements were historic inasmuch as no other industry has made such commitments. Chairman Patricia Gatling of the Human Rights Commission and her staff deserve high marks for moving the industry forward.
5. As the advertising agencies sealed their negotiations with the Human Rights Commission, it was agreed that they would be free to proceed with their diversity plans without any hearings on the issues that were resolved as a result of many months of negotiation. Thus, following the advice of their individual legal counsel, the agencies, as you can understand, opted not to appear today. I believe there were a number of corporations that opted-out as well.
6. As a courtesy to you, Mr. Chairman, and out of our respect for the City Council system, we did not want to let the opportunity go by without affecting the record on this issue.
7. Consequently, I would like to submit this report on Advertising in New York Media for the record today.
8. This report was compiled by experts in the New York media industry who are familiar with both the challenges and opportunities that exist when it comes to this category.
9. The data were derived from independent, third-party data collection sources and standard industry research sources, including Nielsen Ad-View, TNS, Audit Bureau of Circulation, and Arbitron. These are not estimates and are not sourced from advertising agencies, but reflect standard industry measurements.
10. Much of the report is technical, and some of the data were taken from proprietary sources. Unfortunately, as much as I would like to claim to be, I am no expert in this area.
11. If you have questions or comments about the report, I am sure it can be arranged for industry experts to discuss the details with you and your staff at a working session, or if you prefer to submit them in writing.
12. I would also submit for the record a copy of Principles & Best Practices for Diversity and Inclusion in Advertising Agencies. This document was issued by the 4-As to provide guidance to its member agencies on a range of issues relating to diversity, including the expanded utilization of minority media. It was produced after consultation with a number of concerned individuals from around the country who served on the Diversity Advisory Board. I draw your attention to the fact that the Principles and Best Practices calls for increasing minority contracting by all agencies.
Finally, Mr. Chairman, the advertising industry would urge you to explore productive rather than punitive initiatives to further diversity and inclusion in the advertising and media industries.
I appreciate the opportunity to testify today. This concludes my remarks on behalf of the American Association of Advertising Agencies.
Part II—Personal Statement of Adonis Hoffman
Councilman Seabrook, now, if I can take off my advertising association hat for a moment, and speak to you in a different voice. And that is as a communications lawyer who has observed the landscape from both inside and outside of government. I would like to offer your committee a few recommendations.
First, the question of inclusion in any industry is not something that lends itself to a fast, easy solution. There are any number of industries in this country, and this City, for that matter, that have serious, serious, challenges when it comes to diversity. From Wall Street, to the broadcast networks, to the editorial rooms, to the law firms, to the accountants, insurers, and almost any other major industry, the representation of minorities, generally, and African Americans, particularly, is woefully low, especially at the most senior levels.
As the merger of major communications companies continues and consolidation within the media industry increases, opportunities for smaller players are shrinking. I say smaller players because most minority media are small players. The number of minority and black-owned media are shrinking. Whether due to lack of access to capital, increased competition from the general market media, paucity of financial resources, sale of the business by the founder, or just plain old racism, it is a fact that black media have a particularly difficult time surviving. For every BET success story, there are the untold hundreds who could not make the payroll, meet the deadlines, or cover the rent.
As media becomes larger and more bundled, it becomes increasingly more difficult for smaller and independents to survive. It is a reality that affects not only media, but also minority-owned advertising agencies, too. Their survival is something to be concerned about as well.
The real challenge is to stimulate opportunity and ownership for black and minority firms in the advertising and media space. It seems to me there are two highly laudable goals:
1. Increasing the overall number of black and minority-owned media; and
2. Increasing the current utilization of black and minority media by major corporations.
Meeting that challenge will take a sustained and multifaceted approach, and the City Council of New York can play an important role. By adopting a broader approach to the issue of economic development, the Council can investigate ways to stimulate and promote minority ownership of media and media-related entities.
Here are six recommendations:
1. Develop a City program to produce more minority owners of print, television and radio media in New York.
2.As the center of finance and private equity, the City of New York should find ways to involve the capital markets in the goal to increase minority media ownership.
3.The City should investigate the use of tax credits to stimulate investment in minority-owned media companies and to encourage minority media utilization.
4.The City should investigate tax holidays or other investment incentives for minority entrepreneurs starting media companies.
5.To facilitate access to capital, the City could provide incentives to financial institutions who lend to minority media owners.
6.To spur further economic investment and development, the City should expand its economic development zones as an incentive for media companies to locate businesses there.
Mr. Chairman, I am not an economist, but it seems to me there are any number of financial inducements the City could come up with to promote the growth and development of minority media ownership in New York.
Recognizing that city government is limited in scope and resources, it becomes even more important to partner with independent private sector entities to reach these goals. As the original architect of many of the initiatives on the table today, Mr. Sanford Moore should be encouraged to play a more constructive role as an interface between the City and the private sector. I understand that Moore’s group has had discussions with agencies and advertisers on a series of programs to achieve these very objectives. Before the City Council proceeds with more hearings, it should allow for private initiatives to take root.
As everyone knows, the media and advertising industries are at the core of a vibrant New York economy. I am sure you will find willing partners among every stakeholder if this constructive approach is followed. In short, Mr. Chairman, it is in the best interests of the City, the advertising and media industries, and minority firms alike to find ways to work together on these important issues.
I appreciate the opportunity to submit these remarks to your committee.
