The road to diverse representation amongst marketing suppliers could also be paved with good intentions, but the reality is it’s still a bumpy ride.
In a recent study, the Association of National Advertisers found that 56%of selling executives are interested by supporting diverse suppliers. Yet, only 38% of those suppliers report having received increased investment from the marketing or promoting communities in 2022, and 46% imagine that investment will increase in 2023.
“The top takeaway is that investment is increasing, but there remains to be a little bit of a gap between investment and interest,” said Bill Duggan, group executive vice chairman at the ANA. “We have a look at this as a glass half full.”
For purposes of the study, a various supplier is one which is women-, ethnic/minority-, veteran-, LGBTQ+- or disability-owned. Among diverse suppliers, 10% of them are in production, 10% are agencies and 70% are media firms, Duggan reported. The remainder includes consultants, packaging, promotions and research.
Building relationships
The hiring of diverse talent and corporations on the production side has been ahead of the curve, per Duggan. However, the largest component — media — is severely lacking. Only 1.85% of all current ad spending goes to diverse-owned media and only one.2% of current spending goes to diverse-owned and -targeted media, based on the ANA’s Alliance for Inclusive and Multicultural Marketing (AIMM), in partnership with Media Framework and Standard Media Index. AIMM recommends that by 2025, 6.5% of all spending should go to diverse-owned media and 4.6% to diverse-owned and -targeted media.
That’s a big gap to fill in only two years, particularly when the recent report suggests many advertisers are “sitting on the sidelines” because, while they’re interested by doing something, they don’t know where to start. This is very true amongst those firms that rank slightly below the giants.
“There are big firms which have made notable investments in supplier diversity,” Duggan said, pointing to initiatives from P&G and General Motors. “But there are other firms which might be punching below their weight and might be doing more.”
That sentiment is very true on the subject of media suppliers. The general message from marketers is that there’s not enough inventory — or not enough quality inventory — to justify the investments in diverse media. As a treatment, Duggan suggested marketers lean in a bit more to create programs which might be mutually helpful.
“It won’t just be a media buy; it could include a content partnership or other activation,” he said. “It’s essential for advertisers to construct direct relationships with these media firms.”
Getting to work
On the other side of the equation, suppliers should develop more evidence that the investment of their businesses will produce the requisite returns.
“I believe it will help if there have been more case studies that diverse suppliers would show to display the successes of those programs,” Duggan said.
It’s essential to take into account that success may not take the same form as what marketers are used to.
“Marketers are used to certain metrics with traditional media — like CPM and reach — and these will not be the best metrics for diverse media measurement,” Duggan said.
Among the suppliers surveyed, the challenges they cited included getting their foot in the door with the national advertisers and agencies, negotiating the prolonged payment terms required by some advertisers and agencies (which many diverse suppliers can’t afford) in addition to a scarcity of feedback once they don’t get the business.
Still, the onus for improvement is on the marketers, who’ve the money, the control and the clout to do something, Duggan insisted.
“The industry has work to do,” he said.
Making a commitment
Perhaps the biggest challenge is demonstrating a commitment to diversity. Among the suppliers surveyed, 76% cited a scarcity of leadership support for working with diverse suppliers as a barrier. Similar numbers noted that many advertisers and agencies have identified opportunities to bring diverse suppliers into their marketing/promoting supply chain (76%), in addition to an overall lack of expertise of the value of using diverse suppliers (74%).
To address those latter two points, Duggan noted the ANA has developed several surveys, studies and white papers analyzing diversity in the supplier network, including the recently concluded “Diverse Media GrowthFronts,” a licensed list of diverse suppliers and instructional guidelines designed to assist marketers partner with diverse media suppliers.
Without a doubt, the most significant impetus for change is the need for it to turn out to be a publicly avowed company priority, per Duggan.
“When you declare your intention to work with diverse suppliers publicly, you’re declaring it to your employees and other essential constituents,” he said. “You also need an internal champion [for diversity] to make it work.”
Ultimately, Duggan insists the intention to enhance is there, as is the data underscoring that diversity is the way of the future, and those that don’t get on board will probably be left behind.
“Companies can see where the population demographics are going, and so they wish to have supply chains and suppliers that mirror and reflect their customer base and the country,” Duggan said.
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