A New Venture for Jay-Z, on Madison Avenue
By STUART ELLIOTT
JAY-Z is a Grammy-winning rapper, a club owner, a clothier, a fledgling hotelier, the part-owner of a basketball team and the former president of a record label. Now, he gets to add adman to his résumé.
Jay-Z — real name, Shawn Carter — is joining forces with another African-American entrepreneur, Steve Stoute, to open Translation Advertising in New York, an agency that will help marketers reach multicultural consumers.
The new agency will be part of Translation Consultation and Brand Imaging, which has worked for mainstream advertisers like General Motors, Hewlett-Packard, McDonald’s and Reebok.
Translation Advertising expects to announce its first clients soon, said Mr. Stoute, who sold Translation Consultation last October for an estimated $10 million to $15 million to the Interpublic Group of Companies in New York.
Interpublic, the third-largest agency company (behind the Omnicom Group and the WPP Group) also owns agencies like Campbell-Ewald, Deutsch, Draft FCB, GolinHarris, R/GA and Universal McCann. Interpublic and Translation Consultation share clients like the Chevrolet division of G.M.
Interpublic will own 49 percent of Translation Advertising. The majority stake will be owned by Mr. Stoute, 37, and Jay-Z, 38, who will be the co-chairmen.
“You know his story,” Mr. Stoute said of his new partner, who grew up in the Marcy Projects in Brooklyn. “He came from nothing and turned it into something before our eyes.”
Mr. Carter, in a telephone interview, said he considered his involvement in an agency “part of the natural growth” of his career.
“As an artist, you make music,” Mr. Carter said. “And if you see people who don’t know how to market your music, you get involved in it.”
Otherwise, what you want to accomplish “gets lost in translation,” he added, “no pun intended.”
Mr. Carter was referring to his work first at Roc-A-Fella Records and later at Def Jam Recordings. Mr. Carter stepped down last month as president at Def Jam, part of the Universal Music Group.
“He left his day job at Def Jam; he has to do something,” Mr. Stoute said, laughing.
The Interpublic venture, which is to be announced on Friday, is indicative of the intensifying interest on Madison Avenue in minority consumers.
One reason is the growth of the African-American, Hispanic and Asian-American populations in the United States, which together account for an estimated $2 trillion in consumer buying power.
Another is the increasing influence of minority consumers on the general market, by setting trends and influencing buying decisions in categories like apparel, automobiles, beverages, food, music and sports.
For instance, think back to the commercials that appeared nationally on Sunday during the Super Bowl, the biggest night of the year for advertising.
A spot for Diet Pepsi Max featured musicians like Missy Elliott, Macy Gray, LL Cool J and Busta Rhymes. Naomi Campbell danced in a commercial for SoBe Life Water to a song by Michael Jackson.
Another Super Bowl spot, for Bud Light, was centered on the comedian Carlos Mencia. And the basketball players Charles Barkley, Shaquille O’Neal and Dwyane Wade appeared in commercials for T-Mobile and Vitaminwater.
Some advertisers already believe there is no longer “a so-called general market,” said Lisa Skriloff, president at Multicultural Marketing Resources, a consulting company in New York, but rather a coalition or collection of diverse consumer groups.
“It’s especially true for companies doing business in ‘minority majority’ states” like California and Texas, she added.
Despite those demographic and cultural changes, Ms. Skriloff said, estimates are that ads aimed at minority consumers account for less than 4 percent of the total ad spending in the United States.
“There are major advertisers that are still not getting it, that don’t have anyone in-culture helping them, in the company or at an agency,” she added, while others “are afraid of missteps, afraid they will do the wrong thing.”
That apprehension is not totally unfounded.
“There are people who don’t understand the culture,” Jay-Z said, citing as an example a commercial for a wireless carrier “that shows guys break-dancing in the phone store.”
“It’s just not something we do,” he added dryly.
“We go into the stores and want the same thing as everyone else,” Jay-Z said, adding: “We may care about the style of the phone a little bit more, but we want our phone to work. We care about the functionality.”
Mr. Stoute described multicultural consumers as “a very loyal audience if you come to them in the right way — if you speak to them, and not speak down to them.”
Interpublic owns 49 percent stakes in several agencies that specialize in multicultural marketing to primarily Hispanic and Asian-American consumers, among them Accentmarketing, the IW Group and Siboney USA.
But Interpublic has not been represented in the multicultural/African-American realm for several years, since selling a 49 percent stake in an agency named GlobalHue back to its managers.
“It’s all part of the integrated-offering approach,” said Michael I. Roth, the chairman and chief executive at Interpublic — integrated not in a racial way but in a marketing way, providing clients with a multitude of advertising services that “we can bring to the table all at once,” Mr. Roth said.
Jay-Z is not the only urban entertainment figure to become involved in advertising.
Spike Lee leads an agency, Spike DDB, that is part of the DDB Worldwide division of Omnicom. And Damon Dash has announced the start-up of BlockSavvy.com, an interactive ad agency and social-networking Web site.
“If we sit in a room,” Mr. Carter said, “and offer our ideas of how to reach consumers, how to speak to them — and this is not a cocky statement — put us up against anything, and we’ll win our fair share of battles.”
Mr. Carter said his role at Translation Advertising would be to offer his creative and entrepreneurial ideas. Mr. Stoute described it as not “day-to-day operations” but rather “using his eye, his taste, his understanding of the culture.”
“As an owner of the New Jersey Nets, he’s not coaching,” Mr. Stoute said of Mr. Carter.
Mr. Carter’s work as an endorser in ads will be independent of what he does for Translation Advertising. He has appeared as part of campaigns for brands like Hewlett-Packard and Reebok.
Copyright 2008 The New York Times Company