Thursday, August 5, 2004

Quiznos Subs, hoping to show off its toasty alternative to Subway, started off the year by purchasing ads on radio stations across the country, including many that are “urban” — a format that specializes in hip-hop and R&B and whose listeners and disc jockeys are often black.

It was a routine purchase for a company that targets adults 25 to 49. Urban radio stations often rank at the top of their markets, and about half of urban listeners fall into Quiznos’ target age bracket, Arbitron numbers indicate.

But in the spring, Quiznos backed out, pulling ads from urban stations across the country because an internal study showed that the company should not advertise on those stations, said several sources who spoke on the condition of anonymity.

Industry insiders said such decisions, called “no-urban dictates,” are common, issued by companies who associate urban listeners with a lifestyle that they are trying to avoid.

“This goes on every day in America,” said Brian Knox, senior vice president and director of corporate diversity at Katz Media, a media-representation firm in New York. “It’s basically from soup to nuts.”

Quiznos would not comment on the policy, but issued a statement that indicated that budgetary concerns were behind any changes in advertising.

“At Quiznos, we value all customers,” the company said. “We use our current media budget to reach as many of our 25- to 49-year-old customers as possible. This media plan cuts across as broad of a range of these customers as our current budget permits.”

The dictates have angered executives at Radio One Inc., who are considering taking action against Quiznos, sources familiar with the situation said. Radio One owns 68 stations in 22 urban markets in the United States.

Mario Christino, director for sales and marketing at the Lanham company, would not comment on the Quiznos decision, but he did say that he is “in discussion with” at least one company with a no-urban policy, although he would not name the company.

He added that when discussions with a company fail to spark a policy change, his company does not back down.

“We go back and say, ‘Would you consider us?’ And then if they still say no, then we decide what we would do after that. We would pursue other avenues,” he said.

Mr. Christino would not be specific about the “other avenues.” He said no-urban dictates are unfair but would not comment on whether they constitute discrimination.

His company has never brought a lawsuit against businesses with no-urban dictates, and he said it has never “pursued other avenues.”

“Not yet,” he added.

Mr. Knox and Sherman Kizart, senior vice president and director of urban marketing at Interep, an urban marketing firm, advocate urban radio. They said businesses from airline companies to beverage manufacturers, fast-food vendors to automotive giants, yard-care services to department stores and hotels to supermarkets have issued the dictates, but they would not mention any by name.

The men said the policies are troubling because the companies avoid all urban radio without attention to specific demographics.

“Marketers have the perception that African-Americans aren’t consumers of upscale products,” Mr. Kizart said. “How upscale do you have to be to buy a $2 sandwich?”

As well as Radio One stations, Quiznos pulled out of ads on two urban stations owned by Crawford Broadcasting. Joe Mackay, national sales manager for the Chicago-based stations, said Quiznos agency informed him that it was no longer buying time on urban stations.

Although Mr. Mackay said he disagreed with Quiznos’ decision, calling the company’s thinking “outdated,” he said he respects the company’s right to buy airtime where it pleases.

“It’s just like anything,” he said. “Any person that owns a business has the right to do what they want to do with their advertising dollars,” he said.

Mr. Christino said other broadcasting companies avoid the problem by giving their urban programming a different name.

Local stations WKYS-FM 93.9 and WPGC-FM 95.5 illustrate the point, he said.

The stations’ list of most-played songs for one week in July overlapped for 26 of 40 tracks. They also attract nearly identical audiences.

WPGC calls its programming “rhythmic contemporary hit radio,” or “rhythmic CHR,” while WKYS officially is listed as “urban contemporary.”

Sales directors at Radio One say this difference is aimed at winning advertising from companies who might not advertise on an urban station but don’t mind the rhythmic CHR label.

“[WPGC is] urban when they want to be, but to everybody else, they’re hiding,” Mr. Christino said. “They don’t want people to know they’re urban because then they won’t get bought.”

Sam Rogers, vice president and general manager of WPGC, agreed that urban stations face some advertiser discrimination, but he said the rhythmic CHR label is not an escape.

“WPGC plays the hits for Washington, D.C.,” he said. “It just so happens that the contemporary hits for Washington, D.C., are urban.”

Even if the station did want to avoid the no-urban bias, changing its format type is not an effective way to do that, he said.

“If an advertiser will not buy a station because of what they call themselves, that’s a poor sales job,” he said. “In my opinion, it doesn’t matter what you call yourself, it matters how you present yourself.”

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