The World: Is Madison Ave the culprit or victim in race row?

The US ad industry is being labelled racist, but are the charges fair and will they really change the status quo, John Tylee asks.

After his TV series was cancelled in 1957 because no national sponsor could be found, Nat King Cole famously accused Madison Avenue of being "afraid of the dark".

Now, if a Washington civil rights law firm and the race activists assembled around it are correct, then nothing much has changed within the US ad establishment during the intervening four decades.

What Mehri & Skalet says about Madison Avenue today is truly incendiary. A survey commissioned by the firm suggests it has more than just a diversity problem but is guilty of "pervasive racial discrimination". Not only has it failed to hire sufficient numbers of African-Americans but pays them less than their white counterparts, it claims.

For its part, Madison Avenue has become accustomed to the attacks on its racial integration record. Five years ago, the New York City Commission on Human Rights opened an investigation that resulted in 16 leading agencies vowing to improve their racial diversity.

And with Barack Obama in the White House, New York's agency community doesn't expect the attacks to become any less relentless.

But why pick on advertising? "They've hit industries like banking and fashion and they perceive us to be a relatively soft target," the New York-based head of one international network explains. "It's not because we've more of a case to answer than anybody else. It's more because of the influence we have."

At the American Association of Advertising Agencies, there is a recognition that the survey strikes at the heart of a subject many Americans remain reluctant to discuss. "It was really disquieting to see the numbers revealed by the study," Nancy Hill, the association's chief executive, says. "We have a dearth of African-Americans in agencies at all levels."

Whether, as the study suggests, this amounts to "deeply embed-ded racial bias" is almost impossible to prove. Hill is emphatic the situation hasn't been caused by racism and agencies baulk at what they claim are sweeping generalisations.

One is the suggestion that they pay black graduates 80 cents for every dollar earned by their white counterparts. The other is that blacks are only 10 per cent as likely as whites to have an agency job with an annual salary of more than $100,000.

"Measuring and evaluating salary data is very difficult," one agency chief points out. "We don't have salary bands in the way that many other industries do."

The US industry insists that strides have been made to improve racial integration and that there is measurable evidence of it. "To accuse us of racism is hysterical," a US agency boss comments.

Nevertheless, if the survey is to be believed, US agencies are nowhere near black staffing levels of 9.6 per cent that would bring them into line with the country's ethnic profile. Some of the reasons for this will sound familiar to their UK counterparts - poor starting salaries and a paucity of black role-models within the industry.

Hill suggests that the industry's traditional reliance on social networking to fill its jobs has been a big factor. "That's not to say it's right or wrong," she comments. "It's just the way it's always been."

"I'd like to hire more people from ethnic minorities," a network boss remarks. "The problem is that their CVs just don't cross my desk."

However, US mainstream agencies face an extra difficulty that is unique to their market - the presence of a significant number of minority-owned agencies focused on the African-American and Hispanic communities. It is these agencies that are often a magnet for top ethnic talent.

"If you're an African-American coming into an agency full of Anglo-Saxons, you're hardly likely to feel at home," Hamish McLennan, Young & Rubicam's worldwide chief executive, points out. "We have to provide that comfortable atmosphere."

Ethnic agencies present their mainstream counterparts with a dilemma. Major US advertisers are under perpetual political pressure to allocate part of their spends to minority-owned agencies working in minority-controlled media.

With Obama in the White House, this not-so-gentle persuasion is likely to remain. And with their business virtually guaranteed, minority-owned agencies will grow bigger and stronger.

"We're being asked to integrate better with minority-owned agencies," a senior New York agency executive says. "But how can that happen when we have this kind of institutionalised segregation?"

The question that nobody dares to ask openly is whether all the posturing and rhetoric masks a hidden agenda. With Mehri & Skalet indicating that it may join with the National Association for the Advancement of Colored People in a class action against the industry, some sceptics wonder if the real aim is to hold agencies to ransom.

"The cynic in me says this has everything to do with money," a senior network executive comments, while an industry insider says: "There's a sense that some reparation is due."

"The US is a very litigious society and I fear agencies may decide to pay up to avoid a class action and a lot of negative publicity," an industry onlooker warns. "But if they pay up, a lot of people will believe them guilty as charged."