• by Erik Sass  @eriksass1, February 11, 2008

After ducking out of multicultural advertising targeting African-Americans several years ago, the Interpublic Group of Cos. is getting back in the business, partnering with Jay-Z to create a new ad agency called Translation Advertising. Interpublic will own 49% of the company, with Shawn Carter, a.k.a. Jay-Z, and his business partner Steve Stoute owning the rest.

It's unclear how active Carter will be in the agency's creative and strategic work. His degree of involvement in other business concerns has varied. A multifaceted entrepreneur, Carter has been heavily involved in developing and running a number of businesses, including the recording studios he co-founded and later sold, Roc-a-Fella Records and Def Jam Records, the Rocawear clothing line and the 40/40 nightclub chain.

However, as the co-owner of the New Jersey Nets basketball team, he has mostly opted for the role of "silent partner," leaving management to others.

In an interview with The New York Times published Friday, Carter seemed to hint he will play a substantial role in the creative direction of Translation, leaving the nuts-and-bolts management to Stoute, who founded the company's first iteration, Translation Consulting + Brand Imaging. A confirmed arbiter of taste, Carter has an astute grasp of what resonates with African-American consumers in the urban demo.

He also can impact marketers. In 2006, when the maker of Cristal Champagne made an apparently racist remark about the drink's popularity among rappers in The Economist, Carter called for a boycott of the drink that eventually prompted a retraction and apology (of sorts).

Asked about the hip-hop mogul's new venture, Tru Pettigrew, the president of Alloy Access, the multicultural arm of Alloy Media + Marketing, said "it's good for the game overall. His high-profile celebrity will bring some attention to multicultural marketing, which still isn't where it needs to be, from a dollar perspective."

Pettigrew noted that ad dollars specifically targeting African-Americans only amount to 2%-3% of total ad spending in the United States, which is far lower than their proportional spending power.

Marketers are coming to understand the value of reaching African-Americans and other minority consumers with culturally attuned and hopefully "authentic" messages. According to a report from the Selig Center for Economic Growth at the University of Georgia, African-American buying power reached a record size of $761 billion in 2005. In the same report, the Selig Center forecast buying power of $1 trillion by 2010-11.