Ad agency Interpublic Group acts as mentor to build diversity

While ad veterans from around the globe gather in France this week for the Cannes Lions International Advertising Festival, U.S. companies still have an issue to deal with at home: diversity.

Despite a push by industry organizations for agencies to boost their recruitment of women, blacks, Asians and Hispanics, the industry continues to be a poster child for a dearth of diversity. It is an industry that speaks every day to multicultural audiences with $2 trillion in spending power, and the marketing messages created for those audiences need to reflect an understanding of their cultures.

Advertising company The Interpublic Group ipg is trying to raise the industry standards with its InterAct program, which includes the InterAct Associates training program as the cornerstone of its diversity efforts. The program recruits college graduates for IPG's network of 60 agencies and trains them over two years with six-month stints in specific areas of advertising.

Next week 10 associates will finish up the program, bringing the number of associates who finished the program to 25 since it began in 2004. Another dozen will finish next June.

While the total is small, IPG says the program has elevated diversity as a priority for its employees and managers. IPG, which has a workforce of 40,000 and 2007 revenue of $6.5 billion, says that increasing diversity in its workforce is essential for today's ad industry.

"It's perfectly clear that the marketplace, our customers and various regulatory agencies are demanding diversity," says Michael Roth, 62, who became IPG's chairman in 2004 and CEO in 2005.

His predecessor, David Bell, hired Heide Gardner in 2003 as IPG's diversity head, the first corporate-level diversity chief among the major companies. She developed the InterAct program. "Diversity is perceived as this insurmountable problem that has to be resolved," says Gardner, 50. "This is a way to capture talent."

N.Y.: Big change in the Big Apple

Minority hiring has been a particularly sore point in New York, one of the most diverse U.S. cities and the center of the U.S. ad industry.

In 2007 women represented 42% of jobs, but blacks represented just 9.4% while Asians represented 6.1% and Hispanics 3.8%.

Such numbers prompted an investigation of 16 agencies based here — including three of IPG's — by the New York City Commission on Human Rights in fall 2006. The agencies settled, making a three-year commitment to hire more minority ad professionals.

The first annual review, out in April, showed agencies beat their deal to make minorities an average 18% of professionals and managers hired with an actual share of 25%.

"We knew this was going to take awhile, but we're optimistic we're on the right track," says Cliff Mulqueen, the commission's deputy commissioner.

Since InterAct began, IPG's minority hiring in the junior ranks is up 40%, and minorities are now 20% of junior staff. Minority officials and managers doubled to 13%, including Gardner, who last year was promoted to become IPG's first black female corporate officer. Jocelyn Miller-Carter, who owns a technology company in Florida, last year became the first black woman on the board.

In addition to the trainee effort, Gardner's InterAct program includes task forces, training and hiring goals, bonuses linked to the goals, and an annual review of success. More than 500 managers have gone through InterAct training.

"The important thing is to get the fundamentals in place," board member Jill Considine says. "We want it to be something we live and breathe — not just be a stand-alone program."

Gardner says she focused on recruiting, because minorities tended to exit the industry at higher rates because they felt alienated and saw few growth opportunities.

"People left after two years, so the junior levels were a problem," says Gardner, the daughter of a U.S. Army officer who met his wife in Germany. "We had a high attrition rate with minorities, about 30% higher turnover than with the general population. We knew that was one of the areas we had to tackle."

Hires seen as a measure of success

Among those completing the InterAct Associates program this month is Dalen Cuff, 24, a graduate of Columbia University where he played basketball. He has accepted a job with IPG sports-marketing agency Momentum.

"It seems like IPG is trying to address (lack of diversity) by infusing talent at the bottom, not just trying to retain talent that's already in the agency," Cuff says.

Associates are not guaranteed jobs with IPG, but only one hasn't been hired since the program began. And 13 of the 15 who graduated through last year remain IPG employees. Trainees have an inside track to job openings, and the current crop recently met with representatives from more than a dozen IPG-owned agencies and showcased their work.

Kayu Tai, 23, finished early in January and now works as an art director at IPG's Draftfcb in Chicago. During her training she helped transform 500 mailboxes in 200 cities to look like R2-D2 robots from Star Wars to promote the U.S. Postal Service's stamps commemorating the 30th anniversary of the film. Tai is originally from Hong Kong and graduated from The College for Creative Studies in Detroit.

Still, advertising is a tough sell for many college students. Agency entry-level salaries in 2006, the most recent year available, averaged $26,000 vs. $49,000 in telecommunications or $51,500 in financial services, according to the Compensation Survey of Marketing Professionals by the American Marketing Association and industry consultant Aquent.

The number of students that IPG recruits for the associates program each year is based on expected hiring down the road.

Those who make the cut get a starting salary of $35,000, a personal mentor and the chance to learn a lot quickly. After orientation, they move into areas such as buying, managing accounts, digital ads, copy writing and art design.

There's a financial incentive for managers, too. Meeting IPG's diversity goals can account for 10% to 15% of a manager's annual bonus — $40,000 to $60,000 for a senior manager. This year, two missed their diversity targets and paid the price. "As you would expect, this really got their attention, and it underscores our commitment to accountability as it relates to diversity," says IPG spokesman Philippe Krakowsky.