Advertising Age published a lengthy—and seemingly
regular—report on the state of DEIBA+ in Adland. To summarize, the situation is
bad. No surprise there.
Other non-shockers
include cutting diversity budgets, ghosting diversity vendors, terminating Human Heat Shields, reneging on promises, reducing crumbs, disrespecting multicrumbtual shops, and plummeting
interest—deceptively offset by increasing performative PR and delegating diversity to ERGs.
And AI trumps DEIBA+, fueling Adland’s related
AI.
Inside The
State Of Diversity In Advertising—Waning Commitments Cause Frustration
Cuts to
internal agency DE&I departments and brands hiring fewer diverse vendors
and suppliers are among the confluent issues slowing progress
By
Lindsay Rittenhouse
Four
years after the murder of George Floyd sparked a social injustice movement that
caused advertisers to make commitments to improve industry diversity, companies
appear to be pulling back or reversing the promises they made.
Several
confluent issues are slowing progress on diversity, equity and inclusion in
certain pockets of the industry, according to 16 industry executives
interviewed for this story, including DE&I consultants and diverse agency
owners. Those include cuts to internal DE&I departments at ad agencies;
layoffs disproportionately affecting people of color leading to a decreasing
number of diverse executives and employees at agencies and marketers; and
marketers scaling back on hiring diverse vendors, suppliers and running
advertising that targets diverse audiences.
There
are also factors outside the ad industry contributing to this deceleration.
A U.S.
Supreme Court ruling in June 2023 effectively ended affirmative action in
college admissions and many Southern states have since introduced nearly 100
bills that would limit diversity, equity and inclusion programs at state-funded
schools. Utah, for one, passed an anti-DE&I bill that goes into effect on
July 1. While these bills only apply to education, they are having ripple
effects throughout the U.S. Companies including marketers and agencies are
skittish because of the conservative-led DE&I backlash and are questioning
how they are discussing their own DE&I programs and investments in this
area.
Continued
financial pressures have also caused some companies to make cuts, and DE&I
is one of the first areas to be scrutinized, according to some of the people
interviewed for this story.
“There
is a panic or fear that’s happening,” 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. “People don’t want to be canceled. The influx of
DE&I programs, in ideology and investment financially into certain groups,
was a lot [in 2020]. And it was impactful. What we’re seeing is a backlash to
that.”
DE&I
department changes
While
many companies continue to invest in DE&I, 59% reported an increase in
backlash to their DE&I efforts since the Supreme Court’s decisions on
affirmative action last June, according to a January report from
Littler, which surveyed 322 C-suite executives in the U.S. last November.
Conservative
shareholders of some major marketers, including Coca-Cola Co., UPS and Home
Depot, are trying to force changes that would hamper DE&I efforts at these
companies, according to an Atlanta Journal-Constitution report.
There is a
“growing concern about legislation being passed that could affect DE&I
strategies across the board,” said Ezinne Okoro, VML’s global chief client and
culture strategy officer and former Wunderman Thompson global chief inclusion,
equity and diversity officer. “Though most are directly related to admission
processes at universities, corporations are worried about violating any laws.”
Increasingly,
Okoro said, companies are consulting their legal teams “when building DE&I
strategies.”
“I haven’t
specifically noticed any changes with titles based on the legislation, but
criteria for DE&I programs are evolving to include more language,
explicitly not leaving any room for someone to interpret exclusion,” she said.
“For example, a sponsorship designed for people from Asian descent might now
say their focus is on Asian-American and all persons interested in a
sponsorship program. Or an employee resource group is open to all employees
regardless of demographic and highly encouraged that everyone joins different
groups.”
DE&I
departments are also facing budget cuts. A DE&I executive who was laid off
and requested anonymity said job opportunities in advertising have been bleak.
The person said they have applied to 55 jobs in six weeks and received two
interviews, and they have seen no open DE&I positions within the major
holding companies.
“There’s
nothing,” this person said. “There’s a high probability of me not staying in
advertising.”
When
Omnicom’s DDB Global Chief Diversity, Equity and Inclusion Officer Nikki Lamba
left last June, the agency did not replace her in the role. In April,
Interpublic Group of Cos.-owned Mediahub laid off Michelle Gustilo-Smithson,
its VP and HR director of diversity, equity and inclusion, as part of a larger
decision by IPG Mediabrands to consolidate individual agency DE&I efforts
within the network. Jeff Marshall, chief diversity officer and head of
diversity, equity and belonging for UM Worldwide, was also affected by the
layoffs and IPG Mediabrands consolidation.
Lamba,
Gustilo-Smithson and Marshall could not be reached for comment.
“Nikki
made her own voluntary decision to leave,” a DDB spokesperson wrote to Ad Age.
“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 “intentionally shifted the role of DEI from a
siloed practice, putting DEI&B at the core of every people & culture
process and activation … We will continue to closely partner with Omnicom
Global Chief DEI Officer Emily Graham and our many talented, and diverse
leaders across the DDB network to keep DEI&B a top priority.”
An
IPG Mediabrands spokesperson confirmed to Ad Age that it restructured the
individual agency teams that are part of its “people experience” function,
including DE&I, into one network group. “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 said.
Agencies
in particular are pressured by clients scaling back marketing budgets and there
has been a wave of layoffs as a result, many done quietly in a
series of small batches. Martin said efforts to consolidate individual agency
DE&I efforts at a holding company level is a trend he is seeing, as well.
“What
happened? The same thing that usually happens,” Martin said, noting DE&I is
always one of the first areas to be scrutinized. “DE&I was the first thing
to be like, ‘Can we cut it to save money?’”
To be sure, there
are agencies that are still investing in DE&I.
Empower Media, despite seeing a string of staff departures and client
losses last year following an ownership change, doubled down on DE&I by
recently promoting Chief People Officer Marijke Woodruff to chief diversity and
inclusion officer. At the same time, the Cincinnati-based creative and media
agency launched Empower Her, which invests in nonprofit organizations helping
advance women- and minority-owned businesses.
“It is our
philanthropic arm of the agency where we want to invest in nonprofit
organizations focused on women breaking that glass ceiling of equality and
really fostering a culture of empowerment for women and other underserved or
social issues,” Woodruff said of Empower Her. “It’s not just for women, but we
feel that we have that responsibility.”
Marketer pullbacks
Marissa Nance,
founder and CEO of Native Tongue Communications, one of the first and only
female- and minority-certified media agencies, shared her experience during a
Female Quotient panel at Advertising Week New York last October of two major
clients moving their business because they said they were scaling back on the
number of diverse-owned vendors they employ due to the shaky economy.
“About February
[2023], I got two calls,” Nance said on the panel. “They were very similar but
I’m going to give you one of them; the one that resonated the most. It was from
a non-Hispanic, white cis-male [who] said ‘I want you to know that we’re not going
to work with you … this is going to be a rocky year with the economy and my
P&L is more important than my diversity that I have to claim.’”
Nance told Ad Age
that she had already done work for the Fortune 500 company, and that the
marketer essentially told her that she could sue him, but she would not be paid
for that work. Nance said she needed to pay her people who were already
clocking hours doing work for the two companies and could not afford to sue.
As of May, she said
Native Tongue has still not fully recovered from those losses. It was “over
$500,000” between the two of them, Nance said. “Beyond that happening to us,
there have not been a lot of new opportunities.”
This is part of
another troubling trend diverse-owned agencies are seeing right now.
Hilda Adeniji,
senior production manager for Unilever within its marketing and engagement
department and co-founder of MWBE-certified cultural consultancy Transform the
Hustle, said there is a growing move, especially in the consumer packaged goods
space, of companies consolidating their marketing budgets with one agency of
record, which is typically a white- and male-dominated shop, and scaling back
with diverse-owned vendors. She specified that she was not referring to
Unilever.
“Brands are going
back on initiatives they were doing or phasing them out quietly,” she said,
referring to commitments that were made to hire more diverse suppliers and
vendors. The cuts are primarily affecting marketing, advertising, experiential
and influencer budgets, according to Adeniji.
This is making it
harder for diverse-owned agencies to survive and thrive.
Dawn Wade, managing
partner and chief strategy officer of Louisville, Kentucky-based Black-owned
creative marketing agency Nimbus, said it’s also frustrating that a lot of
brands still only hire diverse-owned agencies for DE&I-related projects or
multicultural marketing. She said she wants to see more major marketers hire
diverse-owned agencies for “general market” work.
“It’s as if a
[diverse-owned agency] is not capable of talking to everyone,” Wade said. “And
it makes you wonder why? Because we’ve always had to acquiesce to a general
market. So how are we not able to create ideas and creative that will resonate
with that, as well?”
Hope Smith, director
of brand strategy for Nimbus, said many marketers also have a general distrust
of their diverse-owned agency partners.
“That’s one of the
things that we’ve dealt with for a long time, the lack of trust in what we’re
saying just because those that are in leadership don’t understand the insights
or don’t understand the deep cultural roots or nuances that come with a lot of
the work that we do,” Smith said. “It makes them uncomfortable, honestly.
Instead of leaning into that discomfort and trusting your agency and putting
out something that’s going to be bold and disruptive and make your brand stand
out, a lot of times it is watered down to be 20% of the original idea that we
pushed. That just hits you in your gut as a partner.”
This declining
investment with the excuse of an unstable economy continues to persist despite
ample evidence that there are financial gains for companies that hire diverse
employees and vendors and invest in targeting diverse consumers. A McKinsey
& Co. report from
December found companies with greater executive representation of women and
people of color had a 39% greater likelihood of financial outperformance.
Declining numbers
The slowing progress
is being reflected in the number of diverse employees at brands and agencies.
In 2023, diversity
within the marketing industry dropped for the first time in several
years—people of color made up 30.8% of the marketing industry last year, down
from an all-time high of 32.3% in 2022, according to a February study by the Association of National
Advertisers. 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.
Hiring and talent
experts in the industry have told Ad Age that layoffs are impacting people of color disproportionately. 4A’s
CEO and President Marla Kaplowitz has said though she
doesn’t have hard data on how layoffs are impacting people of color in
particular, staff cuts are affecting “a lot more junior- to middle-management
roles. If you look at just the composition of agencies, more diverse people are
junior to mid-level,” she said.
A talent recruiter
who spoke on condition of anonymity said a lot of the calls she was getting in
2020 to help agencies and marketers hire diverse employees feel “performative”
now. This recruiter said there really isn’t a mandate for diverse recruits anymore.
“If I look at my
talent that I’ve placed in the last two to three years, the majority are
diverse talent and I was really proud of that work,” this recruiter said.
“There was such a huge, huge urgency for diverse talent. A lot of that was just
PR. The diverse talent knew it was. I knew it was … I think because of this
quote, unquote recession, companies are just like ‘We need the skills [and] we
can’t worry about [diversity] anymore.’”
These declining
numbers have a ripple effect.
Dèja Mays, a
freelance art director and co-founder of The Come Up, a networking event series
with The One Club, set up to help Black, Indigenous and people of color in
advertising, said all of these diversity issues she consistently sees within
the ad industry make her question if this is the right career for her. Mays
said her peers of color in the industry have had a harder time finding work
than their white counterparts in the past few years, even after companies made
commitments in 2020 to improve staff diversity.
“Even though I love
being creative and I love advertising and marketing, I don’t really know my
value in this industry,” Mays said. “You can’t treat people’s culture as a
trend. We’re valuable. To me, if you’re cutting budgets and you’re cutting
people of color out what does it say about you? About how you think about
people of color?”
Marina
Filippelli, CEO of multi-segment agency Orci, said the brands that have fewer
people of color working on their marketing are the same ones not investing
properly in reaching diverse audiences or employing diverse-owned vendors.
Companies are “less focused on making sure that they have the right minorities
represented in the marketing organizations that are making the decisions,” she
said.
When brands do
not invest in diversity or have the right people creating the ads that are
intended to target diverse audiences, mistakes and missteps also happen, Smith
said.
“The consumer
is only getting louder as brands are getting a little bit quieter when it comes
to diversity,” she said. “Don’t be the brand that gets canceled because you
don’t see the relevance and the importance that a certain group of people has.”
Beyond
missteps, brands are missing out on a financial opportunity by not employing
diverse employees. DE&I consultant Shari Dunn said she recently worked with
SharkNinja, a product design and technology company, and an idea to create a
hair dryer with features to better serve people with curlier hair came from an
engineer of color.
That product
“opens up exponentially more market share,” Dunn said. “And Black women spend a
shit ton of money on their hair … If companies are pulling back on their
diverse marketing, [they’re losing out on] trillions of dollars. So you’re
saying you just don’t want the money? This is a legitimate question.”
