Minority Owned and Operated Business Affiliations Tracking

December 16, 2008

The Question

A member sought information on how members track minority owned and operated business affiliations, including media spending. The member asked the following questions of other ANA members:

  • Do you track minority owned & operated media spending?  If so, how?
    1. As certified minority owned & operated ONLY (those who have government certification from the NMSDC - National Minority Supplier Development Council).  
    2. As certified minority owned & operated AND self-proclaimed minority owned & operated (those companies that are minority owned but are not certified or may not be certified due to lapse in renewal.)
    3. Other (please explain).
  • Do you track any other minority-owned business affiliations besides media? If so, what is your process? (i.e. Tier 2, Tier 3 minority-owned printers, etc.)   
Overview

Members of ANA's West Coast Advertising Financial Management, Advertising Financial Management,  and Multicultural Committees were contacted for this benchmark. Thirty members responded. 

  • 14 of the 30 respondents (47%) report tracking minority owned and operated (o/o) media spending
    • 8 of the 14 (57%) reporting that they tracked certified minority o/o ONLY.
    • 4 of the 14 (29%) reported that they tracked certified AND self-proclaimed minority o/o.
    • 2 of the 14 did not explain how they tracked minority o/o media.
  • 14 of the 30 respondents (47%) report that they do NOT track minority o/o media spending
  • 16 of the respondents (53%) report that they track other minority o/o vendors
  • 10 of the respondents (33%) report that they do NOT track other minority o/o vendors
  • 3 of the 14 respondents (21%) who reported tracking minority o/o media spending reported using their media agency to track the spend
  • 2 respondents did not indicate whether they track minority o/o media spending
  • 4 respondents did not indicate whether they track other minority o/o vendors

Their complete responses can be found below.

The Responses

Member Response #1

#1 - Yes -- certified by a third party but also acceptable is self certification via the http://www.ccr.gov/ website.

We will be looking to track tier 2 moving forward.


Member Response #2

We don't track this.  Thanks.


Member Response #3

Although a wonderful and altruistic act, we don't track minorityownedspending. 

3.       Ownership may not = target to
4.       Very cumbersome to track/would require dedicated resource to track

a.       Churn of ownership in the industry
b.      Tend to be light audience delivery vehicles.  As they gain scale, they are quickly purchased by larger corps
i.      For example:
1.       BET is owned by Viacom
2.       Univision is owned by a consortium led by Haim Saban (who had previously owned the entity Saban Entertainment), TPG Capital, L.P., Providence Equity Partners, Madison Dearborn Partners, and Thomas H. Lee Partners
c.       Balance effective delivery of overall media campaigns with minority owned
d.      Because some businesses mandate using "ethnic ownership" this tends to inflate the media cost for other advertisers-they aren't competitive
e.      Their selling techniques almost always include some "intimidation/threat" factor-sell the medium on its merits

5.       Can be very controversial for a business

I know of very few accounts that track this unless they are legally required to do so (government accounts) or they have had tough PR issues with ethnic groups (Walmart?)


Member Response #4

We track by commodity, which would fall under marketing

Must be third party certified, providing certificate from NMSDC or WBENC

We track all vendors that are MBE or WBE


Member Response #5

No. and No.


Member Response #6

We track minority media spend through both 1st tier and 2nd tier.  This includes certified minority businesses AND self-proclaimed minority businesses if these self-proclaimed businesses completed our vendor ethnicity form and are coded as such in our system.  We also have a 2nd tier system and rely on our prime suppliers to report 2nd tier diverse spend. 


Member Response #7

We do not.

The closest we get to [tracking other minority o/o businesses] would be the engagement of Latino Construction Business owners that are affiliated with Hispanic Contractor Associations. If so, what is your process? (i.e. Tier 2, Tier 3 minority-owned printers, etc.). There isn't any formality to this, we usually get a list of registered companies that are members of the Association and then simply register them with our internal database to be used for future geo-targeted campaigns we may pursue.


Member Response #8

YES, as certified minority owned & operated ONLY

YES, as certified minority owned & operated AND self-proclaimed minority owned & operated

We have a dedicated team in Procurement that focuses solely on Supplier Diversity so we do a very thorough job of tracking current diverse suppliers as well as growing business relationships among diverse suppliers

We also look at tier 2 and tier 3 minority owned affiliations across the whole company. In marketing, our media and advertising agencies report this information to us annually to account for the vendors that they do business with (both media and production).


Member Response #9

No.  We do not track, although we do not advertise to the general public but to academe, governments at all levels, etc.

Per above, we are not concerned about ownership.  On a personal level, however, having been a founder of the NAHJ and the NAHP, it troubles me that companies such as Impremedia (a Canadian-owned company) can control so much but not "feel" the community as Latino owners would.

We try to use minority-owned businesses in the area, but that is not my area.  We recently shifted our translation services from a non-minority to a minority-owned firm, but the ownership was not a criterion in the selection. A factor, yes, but outweighed by expertise, speed and other factors. 


Member Response #10

We do not track minority owned businesses but we've been asked about this before so I am curious to see what you find out. 


Member Response #11

Yes, as certified minority owned & operated ONLY    

Also,Federal, State, Local governmental third party agency  ( i.e. SBA )

And yes. Tier 2 quarterly reports from majority-owned company  


Member Response #12

Yes. We do. Though the large national outlets are being bought out, there are some smaller shops, in the magazines that are certified Minority Owned. In addition, we track our spend with minority owned media outlets that are local and regional in nature through our outsourced media service provider.

Do you track any other minority-owned business affiliations besides media? If so, what is your process? (i.e. Tier 2, Tier 3 minority-owned printers, etc.)

Yes. The process starts from the RFP and contracting. Service provides need to develop a 2nd tier plan, work out a target, and engage minority suppliers on the projects or contracts directly. Then the prime supplier will need to report using our on-line reporting tool on a quarterly basis or as the project or contract is completed.


Member Response #13

Overall our procurement organization tracks those organizations that are considered and registered with us as Tier 1 and 2 minority/diversity suppliers. As we purchase our media through an agency however we do not track at the individual network per the description above but rather at the agency since that is who we pay. 

This process is consistent across the company. 


Member Response #14

It can be reported from our media agency. However, we don't have specific targets for minority-owned media currently.  

Yes we do track minority-owned spend for other services.  [The] Diversity Program Manager would be able to provide additional information on how this process is managed.   


Member Response #15

We do not have a formal system to track minority owned and operated media spending.

We do track minority owned and operated vendors as part of a wider effort that tracks vendors categorized by the following:

      African American
      Hispanic
      Asian
      Veteran
      Disabled
      Disabled Veteran
      Male/Female

We use an outside firm that has a databank of minority owned and operated vendors.  The firm confirms that each vendor we use is certified by a government authority.  An in house coding system is used within the PeopleSoft software system.


Member Response #16

No.  

Yes, for various sales related purposes we do track other minority-owned business affiliations besides media: most procurement indirect suppliers. 


Member Response #17

Yes, Through our media buying agencies.(General Market and Minority agencies) As certified minority owned & operated AND self-proclaimed minority owned & operated

Yes, identified vendors (Ad agencies, pr, consultants etc.)


Member Response #18

Yes. As a company we track both certified and classified spend. That applies to media spend as well (classified means the firms that are qualified to be MBE's and has self certified as such). MBE status documentation are tracked by our third party supplier. 

Besides media, we track quarterly the M/WBE spend across the different spend categories within the organization - both 1st tier and 2nd tier. Our first tier suppliers are (in most cases) contractually required to do sub contracting to increase 2nd tier spend opportunities. In spend categories, where there are limited opportunities for direct 2nd tier spend, we encourage indirect 2nd tier spend.  


Member Response #19

We are not at this time tracking minority owned, operated or targeted spend. 


Member Response #20

We use a media agency to place our ads with TV networks, radio, print and internet companies. One segment of advertising is multicultural, with media dollars going to companies such as Telemundo, Jet, Oprah, BET. As stated, some are owned by major networks or Publishing houses, others are independently owned, and some may even be owned by W/MBEs. Since the spend is typically through a large media agency, we don't currently capture and report it separately.

Since Media is a large portion of our spend it's important to us to develop a plan around Supplier Diversity. The first step is to understand if we are currently doing business with an M/WBE through our agency, having a list of those minority owned companies would be a great start. If anyone has identified potential M/WBE's that can be shared, we could then capture the spend, either directly, directed or tier 2. We don't currently report tier 2 spend.

As an FYI, I did a quick search online and found the following companies, although I don't know if they are certified:

American Urban Radio Networks is the only African-American owned network radio.
Johnson Publishing Company, Inc. is the world's largest African-American-owned and-operated publishing company. With established businesses in publishing, cosmetics, television production and fashion, JPC brands, which include EBONY and JET.


Member Response #21

We don't track minority owned and operated media spending.

Our organization has a team dedicated to ensuring that we are focused on looking for ways to meet company objectives relative to minority owned businesses. 


Member Response #22

We took a look at spending a while ago as a quick exercise, but do not normally track this spending on a regular basis.  


Member Response #23

We actually do track all our diversity vendors, including 2nd and 3rd tier. We have a website where they can go to qualify and get on the list. They are marked as diversity in our accounting software so we can run reports based on the spend and the category.


Member Response #24

Yes if we buy direct from them and we know they are certified.

We track only minority spend with the Small Business Administration (SBA) certified vendors.  No other certification is qualified according to our government representative.

We track for all commodities Tier 1 only.  Our gov't rep does not accept tier 2 or 3 data.  In addition we have a method of qualifying all suppliers by asking them their SBA status when we set them up as vendors in our payment systems.  Media is tricky as we don't buy it direct so technically its considered tier 2. 


Member Response #25

We rely on our media agency to provide the reporting of our dollars at minority owned companies.  +95% of our media dollars are passed through our media agency.

All of our tier 1 minority spend tracking is managed by a diversity supplier team within our supply chain organization.  Tier 1 minority vendors must be certified with government certification.

We track both tier 1 and tier 2 minority dollars for every category of purchases including marketing, office supplies, services, and component parts of our products, just to name a few.


Member Response #26

[Our company] does not track minority owned and operated media spend at this time.


Member Response #27

We code our supplier spend report program to identify minority suppliers.  We run the report monthly to calculate monthly minority spend and don't track second tier spend.


Member Response #28

Note, although we do not have any specific minority-owned media spend that I can point to, we do report and track our spend by category and NAICS code.

Do you track minority owned & operated media spending?  If so, how?

Answer = Yes, as certified minority owned & operated ONLY (those who have government certification from the NMSDC - National Minority Supplier Development Council).

Do you track any other minority-owned business affiliations besides media? If so, what is your process? (i.e. Tier 2, Tier 3 minority-owned printers, etc.)

Answer = Yes

Majority Tier 1 and some Tier 2.


Member Response #29

We only use 1 company to do our consumer media planning, and 3 to do our pro media planning, and none are minority owned.


Member Response #30

[Our company is] actively tracking all diversity (minority owned and woman owned) spend.  We only recognize certified diversity suppliers, but work with them to help them become certified if needed.  Our primary focus is first tier, but we are beginning to work with major suppliers to track 2nd tier diversity spend.

Source

"Minority Owned and Operated Business Affiliations Tracking." ANA Advertising Financial Management & Multicultural Committees, December 2008.