Some black-owned publishers saw their ad revenue increase after some agencies started spending more on their channels. However, obtaining – and maintaining this funding – remains a challenge for many black-owned businesses and entrepreneurs.
In this case, some entrepreneurs believe that companies must continue to increase their investments in black-owned businesses now, especially since economic uncertainty could lead to a recession which could hurt the growth that some black-owned businesses Blacks have experienced in recent years. . Black entrepreneurs in the United States have been disproportionately impacted by the COVID-19 pandemic due to the racial wealth gap and systemic racism.
“I think African American, minority, and underrepresented startups should get disproportionate advertising and financial support because most of them already have limited budgets due to this lack of ad spend/funding” , said Rodney Williams, president and co-founder. of the SoLo Funds financing platform.
Williams, along with others in the advertising industry, called on advertisers to compile a list of black-owned businesses to support.
“Investing in minority-owned businesses is the right thing for business to do,” said Jessalin Lam, vice president of member development and diversity at the nonprofit research and development consortium IAB. “Companies must commit to moving the industry toward fair media spending.”
In the United States, 440,000 (or 41% of) black-owned businesses closed between February and April, according to the National Bureau of Economic Research. Compared to that, only 17% of white-owned businesses have closed. That being said, there was a 28% increase in the number of black business owners in the third quarter of 2021 compared to pre-pandemic levels, according to census data. Despite this statistic, black-owned businesses are still denied business loans or marketing funding.
Bias not only plays a role in getting funding and loans to start businesses — including getting Paycheck Protection Program (PPP) loans, according to an NYU study — but also where advertising dollars are spent, according to industry experts. Black business owners seeking advertising dollars have had to continue to deal with this bias.
Williams thinks black-owned businesses are going to face more questions on a more critical level than before compared to white business owners in attracting those dollars. “It’s unfortunate,” Williams said, “but there will always be biases.”
But there’s potential in knowing the public, said Jeffrey L. Bowman, CEO of Reframe. “By understanding the buying audience, black businesses will better explain why a brand should buy media from the black-owned media company,” Bowman said.
Bowman is advocating for structural change within Fortune 500 brands, which tend to back black-owned media, if they can achieve their media goals. “In most cases, the game is against them, especially when they want to influence culture beyond black people,” Bowman said.
Industry analysts and black business owners can showcase previous ad wins to convince more buyers to back them with ad dollars and share success metrics and ROI from those collaborations, Lam said. .
The success of Black-owned businesses depends on their ability to leverage their communities to raise awareness, establish a strong reputation and prove their viability. “You can’t be a black businessperson without taking on the responsibility of being an agent of change in your respective industry,” said Joe Anthony, founder of Hero Collective, a 100% black-owned advertising agency. . “The more you build your brand as a leader, the more your community will support you when you need it most.”