Advertising Age published the annual—and even
semi-monthly—report on trials and tribulations experienced by Chief Diversity Officers.
The latest
installment shows CDOs not only face defunding, disinterest, and disrespect—now
they’re being dumped.
MultiCultClassics
labeled 2021 The Rise Of Human Heat Shields, as White advertising agencies scrambled to integrate CDOs into exclusive company cultures.
Roughly three years later, Ad Age heralds the reverse of a performative trend.
The spotlighted
whining and gnashing of teeth reruns standard sufferings: lack of commitment,
lack of authority, lack of finances, lack of resources—and let’s not forget
lack of diversity.
The pathetic
paradox progresses; that is, Chief Diversity Officers have no impact on
diversity. Add the irony of CDO dismissals literally decreasing diversity.
Indeed, Sanford Moore’s CDO perspective still rings true today, presenting reality
in about 4,000 fewer words than Ad Age.
Agencies are
laying off chief diversity officers—inside the DEI cuts and what’s next
Ad Age explores
why agencies are laying off DEI executives, while some fear cuts will only
increase under Trump
By Lindsay
Rittenhouse
The role of
chief diversity, equity and inclusion officer—a position that just four years
ago, in the wake of George Floyd’s murder, was heralded as essential to
transforming the advertising industry—has been in troubling decline, with
agency holding companies eliminating or consolidating the position amid overall
cutbacks in budgets and resources devoted to DEI.
Now, some in
the industry are fearful that DEI could suffer even steeper cuts
after Donald Trump was elected president earlier this month, according to
17 diversity, talent and other ad leaders who spoke with Ad Age.
Trump has
proposed rolling back DEI efforts, including taking federal funding from public
schools that address issues such as racism or gender in
their curricula. The changing political environment has already
prompted brands such as Meta, Tesla, DoorDash, Lyft, Home Depot, Wayfair and X
to make cuts to their DEI teams. Other major marketers including
Harley-Davidson, Tractor Supply, John Deere and Lowe’s are scaling back or
dropping DEI initiatives.
Agencies are
now bracing for further cuts. “With the election outcome, it’s clear that the
role of the chief diversity officer will continue to diminish at a corporate
level,” said Tamon George, co-founder and CEO of Creative Theory Agency. That
sends a signal to employees of color that diversity efforts were “never
important in the first place,” said one former agency executive who was laid
off earlier this year.
Reasons for
the falloff
DEI roles
overall in the U.S. increased by 55% in 2020 following social injustice
protests, according to the Society for Human Resource Management. But in recent
years, there has been a slowing of these hires. As companies underwent layoffs
and cut back on costs, the attrition rate for DEI roles was at 33% at the end
of 2022, compared to 21% for non-DEI jobs, according to New York-based
workforce analysis firm Revelio Labs. More current figures were not available.
Part of the
reason for the falloff: Companies didn’t invest or benchmark properly for the
role to begin with, setting DEI leaders up to fail, according to the people
interviewed for this story. So when agencies were forced to make cuts due to
lost accounts or to boost earnings, these jobs were some of the first to
go.
These people
also cited the wave of conservative lawmakers and activists lodging attacks on
DEI across the country, making companies more cautious about how they frame
their DEI roles and departments. They said the backlash has caused some
companies to rebrand DEI jobs to bring initiatives such as sustainability under
its remit, or do away with the role entirely.
“It started
with the Supreme Court’s decision to remove affirmative action,” said Kumi
Croom, managing director for agency Duncan Channon and DEI advocate,
referencing a U.S. Supreme Court ruling in June 2023 that effectively ended
affirmative action in college admissions. “Then you start having debates over
the meaning of words and—I’ve seen within organizations—what this commitment
really means. Having it be an anomaly instead of just a norm, that is where
people are really failing. This should not ever be an anomaly, it should be a
norm—all you’re trying to do is make sure that you are removing bias and that
you are creating a space for everyone to belong.”
Some agencies
argue that there is less of a need for a DEI officer because, rather than
“siloing” the role, shops have already embedded diversity and inclusion
philosophies throughout their agencies, making it everyone’s responsibility.
But several
people, including executives at agencies that have cut the role, reject that
idea, saying that the elimination of the chief diversity officer is having a
negative impact on company morale and culture. Those people said they’ve seen
their employee resource groups, established to help support workers of color,
suffer since their chief diversity officer was laid off. Many people who spoke
with Ad Age, including agency executives and consultants, said if the industry
truly wants to have a diverse and inclusive workforce, agencies and marketers
need to reprioritize this position.
Further cuts
on the horizon
Diversity
advocates are particularly concerned that the new presidential administration
will give brands and agencies license to stop investing in diversity efforts.
“Our contracts,
strategies and tactics are now, more than ever, at the mercy of leadership to
understand that equitable inclusion requires tactics that serve minorities and
those that DEI initiatives were supposed to safeguard,” said Dawn Wade,
managing partner and chief strategy officer of independent agency Nimbus. “We
anticipate that brands will pull back and use the recent outcomes as an excuse
not to do the work, or they will find clever ways to work around the implicit
and explicit biases the incoming administration has been pushing.”
Creative Theory
Agency’s George, however, said the opposite could be true for companies that
have made “a foundational commitment” to DEI. “I expect to see internal
advocates doubling down on creating inclusive environments and processes,
almost as a form of quiet resistance,” he said. “For them, advancing DEI will
be an intentional act, reinforcing the values they believe in despite broader
trends.”
Ashish Prashar,
a political strategist, human rights activist and former agency executive, most
recently holding the title of global CMO of Interpublic Group of Cos. agency
R/GA, said he doesn’t necessarily think Trump will “have that much of an
impact” on DEI. Trump’s “mantra” has been to leave the decision of DEI to the
states and individual companies, in a capitalistic fashion, he said.
This could lead
to CEOs who never placed a high priority on DEI using Trump as an excuse to
make cuts, Prashar said.
“Leaders will
use Trump to say, ‘Oh we can’t do these things now,’” he said. “That’s
political cover, to not do something they didn’t believe in the first place.”
DEI layoffs
and lack of replacements
Well before the
election results, chief diversity officers were already facing layoffs at
holding companies.
Lea Taylor, who
led DEI for Publicis-owned Razorfish, was impacted by the broader layoffs that
resulted in the loss of 150 to 200 employees at the holding company’s digital
experience agencies, Ad Age reported last month. Razorfish and Taylor declined
comment.
IPG Mediabrands
consolidated individual agency DEI efforts within the network in April—now all
DEI efforts for agencies under IPG Mediabrands, including UM and Mediahub, are
handled by one group division. That led to the layoffs of executives including
Michelle Gustilo-Smithson, Mediahub’s former VP and HR director of diversity,
equity and inclusion, and Jeff Marshall, the former chief diversity officer and
head of diversity, equity and belonging for UM Worldwide.
An IPG
Mediabrands spokesperson confirmed the consolidation efforts of its “people
experience” function, which includes DEI. “Our goal was to deliver a more
consistent, connected experience for all employees by ensuring they have access
to the most impactful programs and talent initiatives that exist across our
network,” the spokesperson wrote in an email to Ad Age.
And although
Omnicom’s DDB Global Chief Diversity, Equity and Inclusion Officer Nikki Lamba
left on her own accord in June 2023, the agency did not replace her in the
role.
“Nikki made her
own voluntary decision to leave,” a DDB spokesperson wrote to Ad Age in an
earlier statement. “Her relationship with DDB was strong through to the end,
where she agreed to work an extended notice period to ensure business
continuity.”
The
spokesperson added that DDB has shifted DEI responsibilities “from a siloed
practice,” and handed them to the existing people and culture team. “We will
continue to closely partner with Omnicom [Chief Equity and Impact Officer]
Emily Graham and our many talented, and diverse leaders across the DDB network
to keep DEI&B a top priority.”
Lamba declined
comment. Gustilo-Smithson and Marshall could not be reached for comment.
Best
practices for inclusion
Some agencies
and industry groups maintain that eliminating or centralizing the chief
diversity officer role could indicate a sign of progress. For some shops, said
4A’s CEO Marla Kaplowitz, DEI is more embedded throughout the entire agency and
therefore is a priority for all C-suite leaders, versus one executive.
During the
height of the pandemic in 2020, agencies faced financial pressures and mass
layoffs but were also hiring chief DEI officers because this foundation had yet
to be established, Kaplowitz said.
Ad Age reached
out to all of the major holding companies for this story; most declined comment
or argued on background that they were continuing to invest in DEI.
An IPG
spokesperson said that the holding company is doubling down on DEI with its
launch of Rise—a set of tools that the holding company’s employees across
agencies can use to build more diverse teams and drive growth for the company
and clients. Under that program, IPG is also going to be launching a
visualization tool called the Floominator, which R/GA built, that is being beta
tested right now but can be used to create diverse visuals such as iconography
for clients. “We’re making diversity an economic multiplier, just like
creativity or gen AI,” the spokesperson said.
Chief diversity
officers essentially set DEI priorities for the entire company—they review and
revise policies and make recommendations for promoting inclusion in hiring
practices or even in the campaign the agency or marketer is putting out in the
world. In the past, the role was siloed within HR, but it later was broadened
as advertisers and marketers committed to making chief DEI officers part of
every department. The idea was that inclusion would be embedded in everything
the companies did—but whether that actually happened is questionable.
IPG’s FCB
Chicago said it’s been able to embed DEI throughout its agency, but it’s also
not scaling back on the function. The way it did this was by first hiring Marc
Wilson in 2020 to advise on inclusion both internally, in the way the shop approaches
hiring and retaining its own employees, and externally, in the way client work
is showing up in the world.
As the
executive VP, executive director of strategic inclusion, Wilson said he is part
of the four-member DEI department. He works alongside HR practitioners on
internal and talent-related matters, but he’s not siloed to HR. He said he
reports directly to FCB Chicago CEO Kelly Graves and is brought in on agency
pitches and the creative process to oversee the work, as often as the chief
creative officer.
Wilson said he
is brought into every chemistry meeting with a potential new client, along with
the CEO, the chief creative officer and the chief strategy officer. Clients
“see this, [and know] DEI, strategic inclusion is a priority,” he said.
Since Wilson
was appointed, FCB Chicago has launched 10 employee resource groups and 66% of
the FCB Chicago office participates in at least one. To date in 2024, 70% of
FCB Chicago’s Black employees reported a strong sense of belonging, a 25%
increase since 2020, according to the company, and 89% of FCB Chicago’s
employees surveyed in 2024 reported that they feel the agency values diversity,
equity, inclusion and belonging. According to the agency, the inclusion
strategy Wilson leads with clients helped win brands including Great Wolf
Lodge, Home Instead and Nature’s Path, and contributed to over $20 million in
new business growth in the last year at FCB Chicago.
FCB Chicago
also pointed to “Love, Your Mind” as an example of a successful campaign that
came together thanks to Wilson’s influence. The PSA (below)—a joint effort from
FCB’s Chicago and New York offices, alongside the Ad Council, for the Huntsman
Mental Health Institute in 2023—aimed to break down the barriers that exist for
Black and Hispanic men to seek mental health support, and garnered 1.5 billion
impressions.
Having multiple
teams work on DEI is not “a bad thing,” but agencies should have one point
person (like FCB Chicago’s Wilson) to oversee the work to ensure it’s getting
done, said Darren Martin, founder and chairman of integrated marketing firm
Streamlined Media & Communications and founder and CEO of its subsidiary,
Bold Culture, an inclusive marketing and workplace development consultancy.
“Multiple people work on creative within an agency, but there's still a chief
creative officer. An agency can have hundreds of strategists and there's still
a chief strategy officer.”
Martin praised
WPP-owned VML’s approach to inclusion, which has seemed to separate its
inclusion executive leadership into two parts: Tasha Gilroy is the global chief
belonging officer and Ezinne Okoro is the global chief client and culture
strategy officer (she was global chief inclusion, equity and diversity officer
before VMLY&R merged with Wunderman Thompson in October 2023).
Gilroy and
Okoro said on a joint call with Ad Age that they while they work together,
Gilroy is focused on internal, employee-related matters, and reports to VML’s
chief people officer, whereas Okoro’s role is more client-facing and involves
how to promote inclusion within the work the agency creates. Okoro reports to
the agency’s chief client officer, but both executives said they have a direct
line to VML Global CEO Jon Cook.
Okoro said she
both supports clients, as well as the agency’s teams, to ensure “everyone is
doing their best to continue to increase representation everywhere … it’s all
connected. In Tasha’s world, [she’s] thinking about how we are elevating our
people and our brand presence to get the best people to work for us and to stay
there. And then because we have those best people in there, I can get those
people thinking about how they work directly with our clients. It’s a full
circle, fluid” process, she said.
Gilroy also
praised VML for giving her and Okoro a seat at the table and room to voice
their opinions on what the agency needs to do to progress DEI, both internally
and externally.
“We have
access,” Gilroy said. “We have access to the executives, we have access to the
client teams, we have access to the influential leaders that sit across the
agency globally. Having access and being able to call things out, or to inform
and educate, has been a tremendous way in how we partner with the executives
across the agency.”
Despite some
agencies embedding DEI throughout their companies, some in the industry said
they haven’t seen that practice widespread.
Prashar, for
one, said at the various agencies he’s worked, he never saw DEI embedded into
the entire organization. “That’s bullshit.”
Sometimes, one
problem with keeping the role tethered to HR is that DEI officers are not given
“specific” business goals, therefore their performance can’t be proved and
tracked; so when layoff decisions are made, it’s an easy job to cut, Duncan
Channon’s Croom said.
“A lot of
businesses [and] agencies got to work on this because of a moment in society,
and if you weren't entering into it for the right reasons, it was never going
to succeed,” Croom said. “If you didn’t root it in agency and company goals,
that role was always going to disappear with layoffs because you can’t justify
it.”
Wilson said FCB
Chicago has specific DEI goals every executive must meet, including in
recruiting diverse employees. The shop also has inclusion guidelines to follow
that steer how campaigns come together, “all the way from inception, to
strategy, to the work, to production.”
Okoro said her
performance is tracked in a similar way a chief client officer is, based on
specific new business and organic growth goals. Gilroy said her KPIs vary but
she’s responsible for such things as adhering to certain government and client
contracts that require the agency has diverse representation across teams.
Few open
roles
However the
function is set up, there are still many chief DEI executives impacted by
layoffs who are reportedly left without work; one advertising talent recruiter
said these jobs are scarce.
The former
agency diversity executive who was laid off this year said because there are
not many open DEI roles, they have been applying to HR jobs. But this person,
who spoke on condition of anonymity, believes they are not being
hired because they have a background as a DEI lead.
“I’ve applied
to over 200 roles and I’ve gotten a handful of interviews, but nothing has been
productive or fruitful,” the former DEI executive said.
This person
said they only got interviews after changing their title to reflect more of an
HR-focused background than a diversity-centric one. Still, they said they
wouldn’t hide that DEI would be a priority for her, and in one job interview,
they asked the recruiter about the hiring company’s representation and other
DEI efforts. The recruiter told the person: “‘I feel like this may not be the
best opportunity for that.’”
“It’s been a
big learning curve for me,” the former agency DEI executive said. “I used to be
able to apply for a job and pretty much get an offer and that is not the case
[currently].”
Impact on
ERG
The former
agency DEI executive quoted above said that while their role remained within
HR, they were still able to make a real impact. They said they founded and led
many employee resource groups—which are also largely receiving backlash from
conservative groups—for various diverse workers as well as task forces that
provided monthly inclusion-based training and education for the entire agency.
A senior-level
employee who is still employed at the agency that laid off the DEI executive,
said budgets have since been cut for the employee resource groups.
“People were
crying … [that executive] kept all the ERGs together,” they said, recalling the
day the executive was laid off. The executive “had meetings with us” and was
always finding ways for us to collaborate. It was felt very, very heavily.”
“There is a lot
of uncertainty. We really thought DEI was on the forefront after George Floyd.
Now, budgets are taken away; it feels like it was all for optics,” this person
continued.
Most people
interviewed for this story said these cuts will only exacerbate the industry’s
existing problem with recruiting and retaining diverse talent.
The Association
of National Advertisers’ annual Diversity Report for the Advertising/Marketing
Industry, which came out in February, found that diversity within the marketing
industry dropped for the first time in several years in 2023: people of color made
up 30.8% of the marketing industry last year, down from an all-time high of
32.3% in 2022. And a 4A’s study last year found that the number of agencies
owned or run by white executives jumped to 90.2% in 2022 from 73% in 2021.
Prashar said
without chief diversity officers, agencies will likely continue to lose
employees of color, and that will ultimately negatively impact the work. He
said another issue to consider is AI.
“Our industry
is obsessed with AI right now,” he said. “There have been reports by credible
publications that AI is already biased against people of color, women, all
sorts. We need [DE&I leaders] in the room to help design something that is
not biased, racist or sexist. That’s why DE&I is important.”
Still, Creative
Theory Agency’s George said the noise around generative AI is also
overshadowing DEI, even if “one of the most important places” for diversity to
be considered “right now is in the development and deployment of artificial
intelligence.”
“AI at this
exact moment is the perfect scapegoat,” George said. “It’s taken all the air
from every single room. It has conveniently shifted the attention away from the
sometimes polarizing work that sometimes exists in DEI strategy.”
What
companies did wrong
Companies made
other key mistakes in setting up their DEI teams, outside of keeping them
confined to HR, according to people interviewed.
Some companies
failed to invest in the right talent or didn’t support them with full teams,
said Lisette Arsuaga, co-president and co-CEO of DMI-Consulting, a strategic
marketing firm specializing in diverse segments, and co-founder of the ANA’s
Alliance for Inclusive and Multicultural Marketing.
“Too often,
there weren’t strategies in place that supported these positions, or even full
buy-in for the need for such roles,” Arsuaga said. “To make matters worse, many
times diverse executives were hired to head DEI simply because they were
diverse and not because they had [diversity, equity, inclusion and belonging]
experience. The sum of these parts affected the success of these roles
throughout corporate America and the perception of their need.”
She said
companies that had success and have continued to make progress have been
“strategic, embraced the role, hired the right people and attributed the right
KPIs to measure the impact.”
AIMM will put
together a playbook for companies on the right KPIs to track for DEI, but
Arsuaga pointed to a key stat that advertisers and marketers should be
conscious of as they invest in this space: “Culture is responsible for anywhere
between 55%-66% of a campaign’s success.”
“When a company
doesn’t have the right representation in the room, it’s nearly impossible to
get culture right,” she said.
To be sure,
there are companies continuing to invest in the DEI role. Nike’s new CEO,
Elliott Hill, recently appointed Kizmet Mills as its new chief DE&I officer
and VP. She was previously a senior director in the division and replaces James
Loduca, who announced his departure at the end of the year in a LinkedIn post,
writing he would be leaving to spend time with his family. Mills’ promotion
comes as Hill oversees a reshuffling of staff and looks to position Nike for a
turnaround after a year of declining sales and layoffs.
“At Nike, we
strive to be leaders in fostering a strong culture of belonging and believe
that the work of our diversity, equity and inclusion team is critical to
helping us achieve this mission,” a Nike spokesperson said in a statement to Ad
Age when asked about its DEI efforts.
Rebranding
DEI
There is also a
“rebrand” of DEI that is happening across America due to the conservative
backlash.
Duncan
Channon’s Croom said she’s heard discussions around companies wanting to drop
the “E” for “equity” from DEI, for example, because “it was automatically
getting tied to race. Why is equity only about race?”
“People are
just rushing to change the program so they don’t get in trouble or it doesn’t
get any backlash,” she said.
Creative Theory
Agency’s George said he’s seen “less intensity” for brands and agencies to
bring DEI into the conversation.
“I’ve seen over
the years, the start of DEI transitioning to a sustainability conversation,” he
said, attributing that to a hesitancy from advertisers and marketers to “shine
too bright of a spotlight” on the inclusive work they’re doing due to the current
political environment.
Calcium+Co. is
a health communications group of marketing agencies and brands that recently
rebranded its diversity, equity, inclusion and belonging team to the broader
Social Impact Initiative, with a renewed focus on “allyship, social
responsibility and cultural purpose.” The agency also eliminated its chief
DEI&B role in that process. Melissa Morrow, partner and chief people
officer, is now head of the Social Impact Initiative.
Greg Lewis,
group president and managing partner of Calcium+Co., said he felt by rebranding
its diversity efforts to the Social Impact Initiative, it was making those
efforts more inclusive. What now falls under that team is far-ranging, from
accessibility to different social issues surrounding health care and access to
health care. It’s something that can both have an internal and external impact,
he said.
“We didn’t want
[the efforts] to be limited just to what letters we select,” added Nicole
Camacho, an account supervisor who was made the Social Impact program director.
“We purposely chose Social Impact because it goes beyond the conversation of
what DEI is—the real big part that we want to embrace is the action and the
output.”
In some cases,
Arsuaga said the rebranding of DEI can be “a survival tactic.”
“We believe a
rose by any other name would smell as sweet … that is to say, keep the work
going by whatever means necessary as long as the pillars for diversity, equity,
inclusion and belonging are part of the considerations,” she said.
Still,
“rebranding efforts can have a damaging impact internally on DEIB team brand
recognition and credibility,” Arsuaga added. “As employees search for DEIB
support, rebranded teams should ensure they don’t lose contact with those they
serve … Diversity means everyone, and it’s through this important work that
companies will see innovation and inclusive growth.”
Contributing:
Brian Bonilla
