There’s good news and bad news when it comes to marketers investing in diverse suppliers, according to a new ANA study.
The good news is that marketers increased their investment in diverse suppliers in 2022, and that trend is expected to continue into 2023. The bad news is that there’s a gap between the “interest” marketers claim in diverse suppliers and their actual level of investment.
The study, “The Marketing Community’s Support of Diverse Suppliers: The Supplier Perspective,” revealed that 56 percent of respondents indicated that interest in supporting diverse suppliers is on the rise. At the same time, however, just 38 percent of diverse suppliers indicated they received increased investment from the marketing/advertising communities in 2022, and only 46 percent said they expect the hike to continue into next year, revealing the gap between actual investment and the level of intent.
The new report defines a supplier diversity program as “a proactive business program which encourages the use of women-owned, ethnic/minority-owned, veteran-owned, LGBTQ+-owned, disability-owned, and small businesses as suppliers.” Diverse suppliers are in categories including agencies, media companies, and businesses specializing in consulting, direct marketing, packaging, printing, production, promotion, and research.
ANA CEO Bob Liodice said the goal of the study was to learn how, in the past year, both interest and investment from the marketing/advertising community in supporting diverse suppliers has changed.
“This important survey demonstrates that our industry is moving decidedly to support diverse suppliers,” said Liodice. “Marketers’ intent is profound, with diverse supplier spending ramping up. This trend acknowledges that the pathway to brand and business growth is strengthened through a commitment to multicultural marketing channeled through a network of diverse suppliers.”
In explaining the study’s discrepancies, the study noted, “One hypothesis about the gap between interest and investment is that many companies which have interest are still ‘sitting on the sidelines’ and don’t know how (or where) to get started.” The ANA is working with a cross-industry task force, which includes the 4A’s and ANA’s Alliance for Inclusive and Multicultural Marketing (AIMM), to develop guidelines to help those companies.
The report suggested that one reason for the lack of investment is the that the inventory supply of diverse media lags behind demand; it recommended that buyers could help increase inventory by co-creating content with diverse media suppliers. The report also recommended that, when working with diverse media companies, buyers should look for opportunities beyond traditional media, such as event sponsorships.
According to AIMM, in partnership with Media Framework and Standard Media Index, only 1.85 percent of all current ad spending goes to diverse-owned media and only 1.2 percent of current spending goes to diverse-owned and -targeted media. AIMM recommends that by 2025, 6.5 percent of all spending should go to diverse-owned media and 4.6 percent to diverse-owned and -targeted media.
ADDITIONAL FINDNGS
Top challenges facing diverse suppliers:
- Lack of feedback when they don’t get the business.
- Getting their foot in the door with national advertisers/agencies.
- Extended payment terms required by some advertisers/agencies.
Diverse suppliers also said they perceive that the biggest challenges for advertisers and their agencies when working with diverse suppliers are:
- A lack of leadership support for working with diverse suppliers (76 percent).
- Identifying opportunities to bring diverse suppliers into an organization’s marketing/advertising supply chain (76 percent).
- Understanding the value of using diverse suppliers (74 percent).
METHODOLOGY
The survey was fielded in the fourth quarter of 2022, and 89 suppliers participated in the survey. Since that time, the ANA has also had numerous qualitative conversations with industry leaders on the topic of supplier diversity.
ADDITIONAL ANA SUPPORT FOR DIVERSE MEDIA INVESTMENT
Key efforts include:
- The Diverse Media GrowthFronts: Developed and presented by AIMM, this event brought together diverse-owned and -targeted media entities with buyers and marketers in March 2023 to close the gap between intent and action.
- The Certified Diverse Suppliers Resource List: A curated list of companies created to support marketers starting or improving their supplier diversity program, frequently updated. There are currently 469 companies on the list.
- The Diverse Media Supplier Guidelines: A comprehensive list developed with the 4A’s and AIMM of guidelines designed to help marketers partner with diverse media suppliers, strengthen their DEI strategy, and drive brand growth.
The ANA and AIMM have been active on the diversity issue for the past several years and have fielded multiple surveys and written various reports on the matter:
- A Diversity Report for the Advertising/Marketing Industry. The report reveals that representation of women in the industry overall and in leadership positions continues to be strong. Furthermore, there has been an increase in the ethnic diversity of the marketing teams of ANA member companies — the most significant growth of ethnic diversity in the five-year history of this report. The overall ethnic skew of the marketing/advertising industry is now 32.3 percent diverse, up from 30.8 percent a year ago. (November 2022).
- Guidelines for Buyers (Agencies and Marketers) When Doing Business with Diverse Media Suppliers. The guidelines were created to improve ways that clients and their agencies can work together. (May 2022).
- And Now a Word from the Diverse Suppliers: The Supplier Perspective on Certification. This report notes the advantages of certification for diverse suppliers and the ease of participation. (December 2021).
- The Growth of Supplier Diversity. A deep dive into supplier diversity in marketing/advertising, covering areas including benefits, challenges, spend, goals, and measurement. Finding diverse suppliers was identified as the top challenge for supplier diversity in marketing and advertising. (May 2021).
- ANA/AIMM Commitment to Equality, Inclusion, and Systemic Change. Called for the development of an equitable creative supply chain through strategic investments in agencies, broadcasters, suppliers, and producers owned or run by Black, Hispanic, Asian, Indigenous, and LGBTQ+ people, and people with disabilities. (June 2020).
- The Power of Supplier Diversity. The report highlighted that identifying diverse suppliers represents a significant challenge for marketers. (May 2020).
