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 Black Stats          
Frequently requested data on African American consumers

Black Buying Power:
  $803 Billion (2008)

Black U.S. Population:
  41.1 million

Top Five Black Cities
  - New York
  - Chicago
  - Detroit
  - Philadelphia
  - Houston

Top Five Black Metros:
  - New York-New Jersey
  - Washington-Baltimore
  - Chicago-Gary
  - Los Angeles
  - Philadelphia

Top Five Expenditures:
 - Housing $166.3 bil.
 - Food $65.3 bil.
 - Cars/Trucks $31.5 bil.
 - Clothing $26.9 bil.
 - Health Care $23.9 bil.

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Home Depot's selection of ethnic ad agencies draws criticism and concerns

By Ken Smikle
Target Market News

(April 12, 2010) When Home Depot, the world's largest retailer specializing in home improvement, announced recently the results of its Hispanic ad agency review, there was an outcry from many about the choice it had made. The international retailer decided to replace the six-year incumbent Hispanic shop, Vidal Partnership, with Richards/Lerma. The winning agency did not have much of a track record, but more surprising was its affiliation with the Richards Group, Home Depot's general market ad shop.

As the youngest of four agencies invited to participate in the review, Richards/Lerma's selection had some industry watchers crying foul. They cite Home Depot's vetting process as the latest example of how some clients ignore the credentials and ownership of established ethnic ad agencies in favor of existing relationships with general market shops.

"While we support the great work and six-year relationship The Vidal Partnership had with The Home Depot, we understand the company's desire to review other partner options," said Gisela Girard, AHAA chairman and president/COO of Creative Civilization in a statement. "In this business, you win some and you lose some. That's just the competitive nature of our industry and no one argues when the review and selection process is transparent. The trend to undercut Hispanic-specialized advertising is building and AHAA is taking proactive steps to prevent this from happening in the future. We are not willing to stand by and let corporations profit from our market while killing our businesses."

This selection process is the first of what Home Depot executives called a Periodic Line Review. "It's designed to insure that we're maintaining best-in-class agencies and partner relationships," said Stephen Holmes, Senior Manager of Corporate Communications. "It involves all of our marketing partners going forward and it's a regular cycle of reviews. It's aimed at understanding our existing partners and understand the on-going changes in the marketplace."

The weariness and concern about Home Depot's actions has grown as the process of selecting an African-American ad agency has begun. Critics wondered if another Richards affiliate would be among the candidates. In 1998, Stan Richards and Terence Reynolds (a creative exec at the Richards agency) formed the subsidiary Shift Advertising.

Home Depot spokesperson Holmes denied that there was anything controversial or unusual about the choice of Richards/Lerma, and he said that the process for finding an African-American agency of record will be fair and follow strict guidelines. He also said that the Richards-backed Shift Advertising is not among the agencies being considered because certification as minority-owned was a requirement in the request for proposals.

"In the African-American review, they're all African-American owned," said Holmes. "So Richards is obviously not in the African-American review because they're not African-American owned."

Minority certification was also a preference in the Hispanic agency review, but the Richards-backed firm was the winner. Asked about the difference, Holmes said "in terms of the Hispanic review, [minority ownership] was a strong criterion but not a requirement."

Certification of minority-ownership of businesses is performed by regional councils of the National Minority Supplier Development Council, of which Home Depot has been a member for seven years. Michelle Johnson, Senior Vice President of Supplier Diversity, is a member of the NMSDC board.

UniWorld Group, which has handled the client's African-American advertising for the past seven years, is one of five agencies vying for the business. Holmes declined to name the other participating agencies and said the selection process is expected to be completed by mid-summer.

There were other significant criteria that Holmes said were given to Select Resources International, the screening company, for consideration. "One of the things that's important for us and clients our size is [the agencies'] ability to handle an account of this size and complexity." By complexity Holmes said he meant things like integrating an ethnic message with the overall marketing strategy.

Home Depot is one of the nation's biggest national retailer when it comes to advertising expenditures. In 2009, according to Nielsen research, the company spent $464.3 million on U.S. media, and $10.9 million in African-American targeted media.

Published reports have estimated the value of Home Depot's Hispanic advertising billings at $37 million. Spokesperson Holmes did not dispute the estimates and said that the difference between the black and Hispanic expenditures is "all anchored in our marketing strategy."

According to Target Market News' "Buying Power of Black America" report, African-American households spent $3.3 billion dollars in 2008 on home maintenance, repair equipment and materials and related services. That total is a 16% increase over the previous year.

Rev. Jesse Jackson's Rainbow PUSH Coalition has voiced its concern with how the ethnic advertising agencies are being chosen. "We have been monitoring this situation and would hope that Home Depot will conduct this process in a fair, equitable and transparent manner," said Janice Mathis, Vice President and Executive Director.

Home Depot has stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, 10 Canadian provinces, Mexico and China.

Go to Target Market News homepage

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 15th Annual Edition
'Buying Power of Black America' report breaks down billions in expenditures

(January 19, 2010) Black consumers are responding to tighter economic condition by focusing more of their spending on items and services that improve their homes and lifestyle. That's one of the trends revealed in the 15th annual report, "The Buying Power of Black America," published by Target Market News. The report analyzes spending for black households in 2008 and finds that African-Americans...
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