SUMMER SCHOOL 7: Advertising & Race : Planet Money A Black ad executive figures out how to reach diverse audiences.
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SUMMER SCHOOL 7: Advertising & Race

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SUMMER SCHOOL 7: Advertising & Race

SUMMER SCHOOL 7: Advertising & Race

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ROBERT SMITH, HOST:

Hello. And welcome to PLANET MONEY Summer School, the sweetest course in economics since that candy cartel you cooked up with your sister after Halloween. This is class No. 7, Advertising & Race. I'm Robert Smith. It is our second-to-last class. Next week, we'll be opening up our online final exam for your chance at a PLANET MONEY diploma, which I'm told has real Latin on it. You cannot fake that.

This week, we're going to consider an anomaly in economics. In the classic economic models that we've talked about so far, you have perfectly rational and informed consumers who choose different products based on price and utility - as if. We all know that the choices that we make get swayed by all sorts of factors that are more psychological than economic. And advertising fits into that category. Today in class, we wanted you to think about the economics and psychology of advertising. How much information do you have as a consumer? And how much information does a company have about you as a segment of the market?

Before we talk about that, though, we wanted you to listen to one of our favorite episodes that we have ever done. It was called This Ad's For You, and I co-hosted it with Sonari Glinton. It's about a man named Tom Burrell.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

SMITH: Back in the 1950s, Tom Burrell was in high school and he had to take one of those aptitude tests. You know, the tests that tell you what you should be when you grow up? And he takes the test, and he scores super high in persuasiveness and artistic ability. And his teacher says, oh, persuasiveness, artistic ability, there's only one profession for you - advertising.

SONARI GLINTON: Tom Burrell is not the kind of guy who shies away from things, and so he gets to college and he's like, bring on the advertising world. Well, a professor of his sits him down and tells him, you are smart, you are persuasive, but the problem is there are no Black people in advertising.

SMITH: Still, Tom Burrell is not dissuaded. He sees an opening in the mailroom - in the mailroom of Wade Advertising in Chicago - and he applies. And the good news - he is the only applicant. He is a shoo-in.

GLINTON: Well, except this is 1961.

TOM BURRELL: To hire me was a major senior management decision. The chairman, the president, the executive vice president, senior vice president - they met and conferred over the issue of even hiring a Negro. And then after they interviewed me, they met to determine whether they were going to go ahead with this, quote, "revolutionary" kind of move to hire a Negro boy to work in...

GLINTON: The mailroom.

BURRELL: ...In the mailroom. In the mailroom. That was a major executive decision that brought the chairman all the way back from his home in Delray, Fla., to have a meeting to decide that.

GLINTON: And after deliberating, the decision was made. They let him in. He got the job. And now Tom Burrell was something few people had seen before - a Black man in advertising.

SMITH: Today on PLANET MONEY Summer School, the story of Tom Burrell and how he changed the way people write ads and changed the way we think about advertising and, more importantly, the way advertising thinks about us.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

SMITH: It is 1961. Tom Burrell has started his new job in the mailroom. And he looks around at Wade Advertising in Chicago, and he realizes this place is about as boring as you can get. It had these really safe, kind of big brands that never took any chances - Robin Hood Flour, Alka-Seltzer, The Grand Ole Opry.

GLINTON: Advertising theory at the time was that to sell products, it had to be really sort of generic, nothing too spicy. You don't want to offend anybody. One size fits all targeted at everyone who owned a television set.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED ACTOR #1: (As character) With Alka-Seltzer, relief is just a swallow away. Try it.

SMITH: It probably goes without saying that you could watch Alka-Seltzer ads all day long in the 1960s and never see a nonwhite face.

GLINTON: Burrell really liked the agency. He was really happy just to be in advertising. The people were good to him. They treated him well. And there weren't a ton of those awkward moments that you might expect from being the only Black guy in the agency, except for one. You know, it was the Christmas party. It's always the Christmas party, Robert. This is when the CFO of the company walks up to him and says...

BURRELL: Tom, you know, we're happy you're here. And we're wondering if next year you would be willing or interested in singing some down-home songs.

(LAUGHTER)

BURRELL: So...

GLINTON: What were you thinking? When he said that, what did you think?

BURRELL: I think I - I think I did the same thing I just did. I think I laughed. I said, whose home are we talking about? And he never got it.

GLINTON: For the record, he never sang at the office Christmas party. And he didn't really stay in the mailroom that long. He started writing copy, coming up with folksy language to sell flour. He even made a big pitch for the agency's big account - Alka-Seltzer. He had a really edgy idea that involved a sick monkey and Alka-Seltzer. It was weird, it was crazy, but it never got made.

SMITH: After just a few years, Tom Burrell's ambition was too big for Wade Advertising. He found another agency willing to let him do edgier stuff - Needham, Harper & Steers. And they - they didn't have to fly the CEO in from Florida to approve his hire.

KEITH REINHARD: Tom was the first Black copy supervisor we'd ever had in the agency. And, well, he's very tall. He's good-looking. He has a good voice. And he was a very gifted, creative guy, so we were drawn to him.

GLINTON: Keith Reinhard was copywriter there in the '60s. And I'm sure you know his work.

REINHARD: (Singing) Like a good neighbor, State Farm is there.

And we got lots of letters from English teachers who objected to our use of, like a good neighbor instead of as a good neighbor, but it stayed with us, and they're still using it today.

SMITH: This agency would go on to be one of those big, historic innovators in advertising. And Keith Reinhard says that Tom Burrell was one of the best copywriters they had. And in the weird way that advertising agencies work, these two were both colleagues, but they were also competitors. The two men were often pitted against each other to see who could come up with the best ideas.

REINHARD: One incident I remember, when we were both given the assignment to convince people to try Continental Airlines because they had wider seats, new wider seats. And we tried to crack it. And Tom and his group just nailed it. I think it was Tom himself who came up with this idea to reprint the seat cushions of these new wider seats on Continental Airlines in a double-page newspaper spread. And the headline simply invited readers to sit down on the newspaper spread and see how much wider it was, how much more comfortable. I mean, he really killed it.

GLINTON: Remember, Robert, we're talking about the 1960s in Chicago. So the civil rights movement is going on. And in Chicago there's sort of a Harlem Renaissance. You've got Ebony magazine, which is a really, really important media outlet for African Americans, definitely at the time. And their ad reps are going around saying this is a Black magazine, the ads have to have Black people in them. And that woke up a lot of people in the advertising world and the consumer market world in Chicago.

SMITH: So what they would do is they would write a script for a TV ad, say, build a set, and first of all, you would hire white actors, like in this ad for Crest. There are these two white kids brushing their teeth at a sink.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED ACTOR #2: (As character) I never beat Greg, except once in a toothpaste test. Greg's side used the same toothpaste as mine but without Fluoristan. My side used Crest and had 42% fewer cavities.

SMITH: So they would film the ad with the white actors, and then at the end of the day, swap out the cute white kids for equally cute Black kids and have them pretty much do the same ad.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED ACTOR #3: (As character) I never could top Jeff. Then in a toothpaste test, we were on opposite sides. My side used Crest. His side used the same toothpaste but without Fluoristan. And that's when I beat Jeff, 'cause my side had 21% fewer cavities with Crest.

GLINTON: Burrell says it was pretty comical how little they thought about Black consumers in these days. He told me this one famous story of a State Farm ad that they wanted to change for Ebony magazine. Now, the original ad had a white couple laying in bed.

BURRELL: There was a photograph on the side of the bed, and this was a family photograph. And so then they did a Black version of that same ad, but they forgot to change the photograph. (Laughter) So you got this Black family in the bed, and you got this white family - with a photograph of the white family on the side. And so that was one example. Another example was Schaefer's Beer.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED ACTORS: (As characters, singing) Schaefer is the one beer to have when you're having more than one.

GLINTON: A lot of brands like Schaefer's like to rely on nostalgia, you know, thinking about the good old days. Well, for Black people, the good old days weren't that good, especially when it was before the Emancipation Proclamation.

BURRELL: And at the time, the line was, 1856, that was a very good year for beer.

GLINTON: It was a very bad year for Black people (laughter).

BURRELL: And this ad is showing up in Ebony magazine. So there's something really strategically wrong with this, talking about how good a year 1856 was for beer. And it just screamed insensitivity, screamed insensitivity. It was a horrible year for us.

GLINTON: Robert, you can imagine just how weird this was. You got a Black guy who's working at an all-white advertising agency. And Tom Burrell is going home to the south side of Chicago, which is sort of erupting in the civil rights movement, and there are these slogans, the Black Panthers, and there's this idea of Black Power. And, you know, he wrestles with this idea, and he decides he's going to come up with his own slogan that's especially meant for the advertising world.

BURRELL: Black people are not dark-skinned white people.

SMITH: You know, when we talked to people about Tom Burrell, they quote this almost verbatim back to us. He said it so often - Black people are not dark-skinned white people. And, in fact, Burrell decides to finally start his own advertising firm really based on this principle - a Black advertising agency that understood and could sell to the Black consumer. Now, I know this seems immensely obvious now. But at the time, it felt like, you know, a real slap in the face to these white agencies he worked for.

REINHARD: I had some reservations about some of the things he was saying.

SMITH: You may remember Tom's colleague, Keith Reinhard.

REINHARD: Whether or not we, as Caucasian creative people, would be able to appeal to a Black audience - I felt that we could and that we had in some cases. But it was pretty hard to argue with Tom when he said, you know, Blacks are not white people with dark skin; I mean, we have a culture of our own, and we need to express that.

GLINTON: So Tom Burrell eventually got a partner, Emmett McBain, and they formed the firm Burrell McBain, one of the first all-Black ad agencies, in 1971. It would eventually become Burrell Communications. And the big brands came running, desperate - brands like Jack Daniels, Ford, and one of his big first clients was Philip Morris and the Marlboro Man. And this was a big problem - selling the Marlboro Man (laughter) to African Americans. The Marlboro Man was this rugged cowboy who was always filmed on horseback in, like, a Utah-like landscape smoking cigarettes.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED ACTOR #4: (As character) The longhorns come to Marlboro Country. Marlboro 100s in the big, gold...

BURRELL: I don't even know where to start. I mean, first of all, when you start talking about longhorns, you've lost me. You've lost me on longhorns. I'm done. And then when you start talking about 100 years ago, you lost me on that, too, because that's the last thing I want to do, is go back 100 years ago with a bunch of rural cowboy white guys. That doesn't sound too safe.

GLINTON: So Philip Morris wanted to create a Black Marlboro Man. And, of course, they came to Tom Burrell.

What did you do to make it appeal to someone like you?

BURRELL: Well, I took it out of the Marlboro Country, and I put it into the city. That's one thing. And the Marlboro Man became a very cool city dude, very well - very stylish, well-dressed, cool - had a big cool factor going.

GLINTON: Gone was the cowboy hat, the big belt buckle. The new Black Marlboro Man has a sweater. And he sits there, and he stares out not at the range, but at a swanky library. It is urbane. It is urban. It is definitely not a cowboy scene.

BURRELL: We changed the line, which was almost blasphemy. We changed the line from, come to where the flavor is, and the line was simply, where the flavor is. So we're basically saying that the city where Black people are is where the flavor is.

GLINTON: What Burrell did was take this general marketing ad and he tailored it for a Black audience. But he really didn't want to be, you know, finishing someone else's work. He wanted to be doing something bigger. He had a bigger vision - to craft an ad and a campaign from the ground up.

SMITH: And he got the chance. In fact, he got the biggest chance that an ad agency can get. If you've seen "Mad Men," you know what this means. McDonalds called. McDonald's called. Well, actually, this guy called.

PAUL SCHRAGE: Paul Schrage.

GLINTON: You were in charge of marketing at McDonald's for quite a while, right?

SCHRAGE: I started the marketing department.

SMITH: McDonald's. And in the 1970s, McDonald's had one goal and one goal only - grow, aggressively grow. It had already conquered the suburbs. It wanted to move big into the cities.

SCHRAGE: It - well, it became apparent that the Black consumer was growing in numbers and importance and felt that we needed somebody that was specialized in that area.

SMITH: Sonari, I think this is one of those moments where the phrase, call Tom Burrell, came out in the conference room.

GLINTON: Yeah, it wasn't like there were, you know, sheets and sheets of (laughter) Black advertising agencies at the time. And when Tom Burrell finally sat down with McDonald's, he had to explain to them not, hey, guys, you need to sell to Black people - that part they got - but it was, the way that African Americans interact with your restaurants is different than the way white people do. In the commercials at the time, they would show white families piling into the car. The idea was that McDonald's, to them, was a treat, a destination. In the Black community, McDonald's meant something completely different.

BURRELL: McDonald's was not used as a place where the family would go. The McDonald's was used as a place where working people would go and take a break whenever they had a chance. It was a place where children would go, very often by themselves. The average check for a family going to McDonald's on these special occasions was larger, the frequency was less. The average check in the Black community was a lot smaller. I mean, kids were running in and out getting French fries.

SMITH: And Tom had this big realization, which was that McDonald's wasn't just a place to eat; McDonald's was also a place to work. It was a major employer in the city. And so he launched a series of ads known in the industry as Calvin 'cause it was about this kid named Calvin.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED ACTOR #5: (As character) Hey, isn't that Calvin?

UNIDENTIFIED ACTOR #6: (As character) I haven't seen him for a while. Wonder where he's heading.

UNIDENTIFIED ACTOR #5: (As character) I heard he got a job.

GLINTON: Yeah, dig that '80s hip-hop beat. Well, it shows a young, Black teenager. He's strolling through the hood, which looks strangely like the Brooklyn set on the back lot at Paramount.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED ACTOR #5: (As Character) ...Covered now.

UNIDENTIFIED ACTOR #6: (As Character) Looks like responsibility has been good for him.

UNIDENTIFIED ACTOR #5: (As Character) Well, I'm just glad somebody believed in him enough to give him a chance.

UNIDENTIFIED ACTOR #6: (As Character) Wonder where he's working.

UNIDENTIFIED ACTOR #7: (As Calvin) Welcome to McDonald's. May I help you?

GLINTON: Robert, It sounds kind of funny now. The ads are a little bit cheesy and straight-ahead. But the thing is, they were really successful, and they ran for a decade. And you followed Calvin as he worked his way up to becoming a manager at McDonald's.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED ACTOR #8: (As Character) Calvin?

UNIDENTIFIED ACTOR #9: (As character) Calvin that used to hang out on the corner?

UNIDENTIFIED ACTOR #8: (As character) So you own McDonald's.

UNIDENTIFIED ACTOR #7: (As Calvin) No, not yet.

GLINTON: You know, I'm pretty sure that in the alternative universe that Calvin is living in, he owns a McDonald's. Well, he probably owns, like, a whole chain of McDonald's or something like that.

SMITH: As somebody watched a lot of TV in the '80s, it couldn't happen to a nicer kid. By the time this ad aired, Tom Burrell was certifiably famous. He was this huge name in advertising. And you know what happens when you're a huge name in advertising? You also get a lot of criticism. And there were people at the time who said, look. Yeah, you made a success in this industry. But you made a success in this industry by selling brands that weren't exactly high-end luxury brands or health food stores.

GLINTON: And I had to ask him about that.

In your early success, some of the accounts that you got were, you know, the Marlboro Man we just talked about, Jack Daniels. The obvious question would be, you know, these are not the best things for African Americans.

BURRELL: Right. That's right.

GLINTON: And this is how you're making your living. How do you feel about that?

BURRELL: Oh, I struggled with that, and I struggle with it.

GLINTON: Burrell ended up dropping the cigarette clients pretty early on in his career. What's important to note is that at the time, Burrell realized the kind of platform that he had with McDonald's. You know, he had a theory that he wanted to work on. It was called positive realism, which meant putting regular Black people in real-life situations on television.

BURRELL: It had that kind of positive effect even though, arguably, we were selling things to them that, as we see now, were not good for them. But there were no things that I recall selling that I declined to use.

SMITH: And once people saw that he was successful with doing that with McDonald's, a lot of the other big, American, blue-chip brands came running to him - American Airlines, Toyota, Procter & Gamble, General Mills, Sears.

GLINTON: And his slogan, that Black people aren't dark-skinned white people, became kind of gospel in the advertising world but not just relating to African Americans. The Burrell principle was one size doesn't fit all, and each group needs to be taken into account.

ROBERT KLARA: What Burrell did opened the door for the kind of ethnic micro-targeting that we see today.

GLINTON: Robert Klara is contributing editor at Adweek.

KLARA: And the way that he did that was by making mainstream brands not just aware of the Black community as a very viable community of consumers, but he also furnished them with a means to reach them that was new and effective. And then once that in and of itself became a mainstream thing, the natural evolution of that trend was then for advertisers to say, oh, well, then there must be other groups that we can reach out to. And the idea of specialized advertising, targeted demographic advertising grows out of that. But you wouldn't have had that if you didn't have the initial awareness of the broader demographic group that Burrell helped to create.

GLINTON: Tom Burrell is basically retired now, though, he does some consulting sort of trying to help major brands understand how to use or not use hip-hop. After all this time, he still has to teach the same lessons he was teaching 50 years ago.

BURRELL: You're not marketing if you're not targeting. And so this whole business about one size fits all, I mean, there's still a kind of a movement on the part of wishful-thinking clients that say, hey, can't we just talk to one group of people because it's so much easier? But the whole thing is that we now have the ability to really get in and talk to people on a more individual basis.

GLINTON: Now marketers realize it would be ridiculous to just try to sell to the Black guy or the white guy. It's about selling to the young, Black, gay guy who lives in West Hollywood, plays golf, listens to Frank Sinatra and likes public radio.

(SOUNDBITE OF MUSIC)

SMITH: Wait. Wait. Wait. Wait. You play golf?

GLINTON: Yeah, of course I play golf (laughter). Well, the idea, Robert, is that more and more, you won't be thinking, who is this ad really for? Now you're supposed to think, this ad is especially for me.

SMITH: The great Sonari Glinton episode from 2015. Coming up, we talk to an economic historian about how advertising fits into our understanding of economics and how it has a different resonance with Black consumers.

(SOUNDBITE OF MUSIC)

SMITH: Summer schoolers, let's put on our economics cap now and think about how advertising works. It does not make products better. It doesn't make workers more productive. If anything, advertising actually makes products more expensive. But it does act as this little grease in the gears of the market by solving what's known as an information problem.

As consumers, we don't know everything that is for sale, we don't know all the features, we don't know how much things cost. Think of how long it would take to search for all that information. Advertising, in theory anyway, makes that a little easier. But there are other, more subtle signals from advertising. And to discuss that, let's bring in our economic expert today, Trevon Logan, who teaches economics at The Ohio State University. Hey, Professor.

TREVON LOGAN: Hi. How are you?

SMITH: I'm doing pretty great after that episode. Professor, one of your areas of research is the time period right before the Tom Burrell era. And one of the interesting things you found is that this information problem that we've talked about that all consumers face was even more of a problem for Black consumers.

LOGAN: Many people don't realize that the end of discriminatory businesses came with the Civil Rights Act of 1964, which banned racial discrimination in places of public accommodation, which would include almost all businesses that are open to the public.

And so before this point, you could be a business that simply did not solicit at all, or in fact would not serve African American consumers or consumers of any particular group if you would like. You could be completely discriminatory. And so this created a very significant information problem, especially for African Americans who would travel, say, over the roads in the 1940s and 1950s. And it gave rise to Victor Green's green books, which were travel guides for African Americans to navigate through particularly places in the United States - and it was not just in the South - to find places that they could - for example, gas stations where they could use a restroom, where they could find local pharmacies that would serve African American customers, where they could go to restaurants where they would be seated and served and not barred from entering due to their race. And so those travel guides solved the information problem because you didn't know what businesses were there.

Part of what's interesting about what Tom Burrell is doing is he's taking these really large firms and really - they're making a really blanket statement to the public via this targeted advertising to African Americans that clearly they're non-discriminatory. And that solves this information problem at a much larger scale, but it does so in the context of the post-Civil Rights Act era.

SMITH: Which is fascinating because if you have to think about what happens before the Civil Rights Act, the mindset of Black customers, to know how effective advertising is in the '60s and '70s that actually acknowledges their existence and says, we want you to be our customer.

LOGAN: Yeah. It's a big deal in two dimensions. When they talk about sort of the advertisements in Ebony magazine, there are two different types of firms that are advertising there, right? So one example would be Ebony Fashion Fair, which is a cosmetic company which is for African Americans. They're advertising in Ebony magazine. So they have a captive audience there and it's an African American business advertising to African American consumers. At the other end of the spectrum, you now see in these magazines really big mainstream products. You know, Procter & Gamble, Johnson & Johnson products, you know, Crest and other sorts of things that everyone uses being targeted and using African Americans in the advertisement themselves sends a very strong signal to Black consumers that this market is valued by this particular firm.

SMITH: One of the economic theories about why advertising exists is that it does provide an advantage to companies by providing a barrier to entry. So if you take Coke and Pepsi and McDonald's and Burger King, they spend so much money on advertising that it makes it difficult for anyone to move into that field and challenge them. How does this end up being part of the calculus when it comes to advertising to different groups, different demographics?

LOGAN: Yes, and I think that certainly if you're appealing to the masses, you're certainly not going to ignore or the large white demographic. But the question is, how much of that Black demographic can you ignore? And this is where the competitive marketplace comes into play. What if your competitor starts paying attention to that? Now you have this problem because you may not necessarily want to do racially targeted advertising, but certainly if your competitor does, they're going to increase their market share by default. And so that would encourage you to also start to target that market. And so what you end up with is competition for the large market, but also now competition for the smaller demographic. And once again, the same sort of competitive processes is at play there.

SMITH: All righty (ph), we can put that concept onto our list of vocabulary words this week - market segmentation; dividing up a market into smaller groups so you can increase sales. Also on the list - information problems. Thanks so much, professor.

LOGAN: Thank you.

SMITH: Trevon Logan is a professor of economics at The Ohio State University and associate dean in the College of Arts and Sciences. Our University of Michigan team, Justin Wolfers and Betsey Stevenson, will return next week for our last class on all of the bad things that can happen to you in the world. Volcanoes feature prominently.

Oh, and I almost forgot the assignment this week. Tell us a story of the most micro-targeted ad you have ever received. Do they know that you race pigeons while you knit? And how do they know that? Let us know. We're planetmoney@npr.org. You can also find us on social media - Facebook, Instagram, Twitter and TikTok, who helps fund the content on the app PLANET MONEY Stream.

Today's class was produced by Lauren Hodges with help from Alexi Horowitz-Ghazi, sound design from Isaac Rodriguez and editing by Alex Goldmark. I'm Robert Smith. This is NPR. Thanks for listening.

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