December 5, 2021

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Black-Owned Media Collective Launches to Help Brands Meet New Ad Commitments

Group Black Inc., a collective aimed at deepening the pipeline of Black-owned media companies, launched Tuesday with an ad-spending target of $75 million from a

WPP

PLC unit.

The new collective and business accelerator seeks to attract ad spending from marketers that are trying to diversify where they advertise.

Group Black aims to advise advertisers and agencies on possible media plans with its members, which include Essence Communications Inc., the publisher of Essence magazine, which focuses on Black women; Holler Technologies Inc., which specializes in stickers and GIFs for digital messages and posts; esports startup PlayVS and news companies Shade Room LLC and Baller Alert Inc.

The new collective also plans to invest a portion of its revenue to buy equity stakes in Black-owned media companies.

GroupM, a media-buying company owned by advertising giant WPP, said it aims to spend $75 million of clients’ budgets through Group Black, a move that it said could help marketers find new media partners and more effectively reach consumers. GroupM has previously called on its clients to spend at least 2% of their ad budgets on diverse-owned media.

GroupM clients participating in Group Black include

Target Corp.

, according to the companies.

Advertisers including

General Motors Co.

,

McDonald’s Corp.

and

Coca-Cola Corp.

are pledging to increase their advertising in Black-owned media amid pressure on U.S. businesses to counter racial inequality following nationwide protests over the police murder of

George Floyd

in 2020.

McDonald’s said in May that its spending with Black-owned media would rise to 5% of its national advertising budget by 2024 from 2% now.

The fast-food chain is also facing a lawsuit from companies owned by media mogul

Byron Allen,

accusing it of discriminating against Black-owned media companies.

McDonald’s called those allegations unfounded. “As we defend against this lawsuit, we will continue to collaborate with diverse-owned partners that keep the brand at the center of culture and create deeper relationships with our customers, crew and employees,” the company said.

Ad buyers have said that sometimes, there are challenges to spending more with Black-owned media, which typically have a much smaller reach than the publicly traded digital and media giants that collect the lion’s share of ad spending.

“The reality is the Black-owned media industry is nascent, it’s underfunded and the pipeline is so small,” said

Travis Montaque,

chief executive, director and co-founder of Group Black, as well as founder and chief executive of Holler.

Group Black’s investments in Black-owned companies, through an accelerator called Group Black Ventures, are partly meant to expand the pipeline of attractive channels for advertisers, Mr. Montaque said.

“A lot of these properties have been underinvested in for so long that they’re not seeing the opportunities out there that the general market sees,” he said.

Kirk McDonald,

chief executive of GroupM’s North American operations, said clients realize that audiences aren’t homogenous and the media-buying company wants to “improve experiences for consumers and results for brands.”

Write to Nat Ives at [email protected]

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