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Marketing is an Inside Job: Lack of Diversity is Blocking the Industry’s Growth

Marketing is an insider’s job and that needs to change for growth

As DE&I had become a hot topic in business, we take a moment to look at the advertising industry’s role in developing an inclusive and transparent space for future leaders. Today the advertising industry fails to reflect the world in which it operates while the consumers to which they communicate are growing more culturally diverse. We explore two core questions: What are the opportunity costs due to this lack of diversity and inclusion in advertising? And how can the industry fight its own myopathy in recruitment to build a robust and diverse talent pipeline.

As demographic shifts unleash the economic power of younger generations, and Environmental, Social, and Governance (ESG) initiatives begin to grow compliance teeth, the price of maintaining a culturally monolithic marketing industry has never been greater.

Some 60 years after the “Mad Men” era of advertising, the mostly white, male-led agencies of Madison Avenue have transformed into multi-agency communication behemoths that influence purchasing decisions for ever more diverse audiences, at a significantly larger, global scale.

As these holding companies have expanded globally through corporate mergers and acquisitions (M&A), they’ve maintained aging business models, and culturally tone-deaf hiring and talent practices that many CMOs have linked to a lack of innovation, and inertia which have repelled diverse emerging talent, as well as clients, and consumers they seek to target.

Brad Jakeman, President of Pepsi’s Global Beverage Group famously challenged the industry to change in a provocative speech at ANA’s Masters of Marketing Conference where he declared“The global agency network model is a dinosaur concept that doesn’t work, I’m sick and tired of sitting in agency meetings with a bunch of straight white males talking to me about selling my brand, when 85% of my brand is purchased by women.”

As agencies have expanded globally to emerging markets, hiring practices have become even more insular, creating an environment that in some markets has fostered nepotism.

In an interview for Aurora Magazine, Yawar Iqbal, Executive Creative Director for JWT Pakistan, expressed his concern over nepotism in the industry – “The amount of nepotism in the advertising industry is insane… The CEO’s son, daughter, nephew, niece –- almost every agency in Pakistan is headed by them; it is almost like a monarchy. Otherwise, it is extremely difficult to make it in this profession at a higher level”.

The failure to innovate and diversify has stifled growth as the advertising industry fails to reflect the world in which it operates while seeking to have a monolithic group lead communications to consumers that are growing more culturally diverse, leaving a trail of unforced communication strategy errors that have alienated customers and made agencies vulnerable to new entrants from both Big Tech (Google and Facebook) and management consulting (Accenture, Deloitte).

In the 2010s, Big Tech showed CMOs that agencies could sell advertising while giving away the means to measure advertising efficacy for free; and top management consulting firms demonstrated that they could be strategic advisors to a new breed of Marketing General Managers that not only managed communications but the overall business as well. These new entrants exposed weaknesses in culturally tone-deaf practices with data science and analytics:

In more than 90% of the simulations run by Facebook, diverse representation was the winning strategy for lift in ad recall (FaceBook advertising)

To remain relevant, agencies were forced to bolster their bench strength to include more data science, business strategy, and integrated analytics to understand promotion effectiveness across digital and physical spaces.

National tragedies have compelled advertisers to make pledges to diversify their leadership, however, this has not yet resulted in substantive change, as top global firms like WPP, Publicis, Dentsu, and Omnicom continue to maintain predominantly white (85%+) and mostly male C-Suites.  A 2020 ANA report found that of 870 chief marketing officers, there were only 3% Black, 4% Hispanic and 5% Asian Executives. (Source)

There are very tangible costs associated with a lack of diversity and inclusion in advertising today, however, as millennials and GenZ mature into adult consumers, and ESG initiatives begin to grow teeth, the price for lack of representation will grow.

For example:

  • 59% of consumers are more trusting of brands when they see themselves represented (Microsoft Advertising)
  • 64% of audiences in the US, UK, and Brazil said they would like to see more diversity in advertising. (Facebook Advertising)
  • 70% of younger millennials are more likely to choose a brand that demonstrates inclusion and diversity in terms of its promotions and offers, 66% in terms of their in-store experience, and 68% in their product range (Accenture Holiday survey)

While it may appear the opportunity cost for lack of representation is borne mostly by consumer brand manufacturers, as opposed to agencies, the marketing industry itself is also comprised of equity assets that face serious challenges to growth if it continues to alienate underrepresented cohorts of emerging talent and target consumers.

One case in point – a young woman named Janae, who dreamed of a career in marketing and sought help from industry and academia to realize her dream.

Janae had a mission – change the world by becoming the world’s first Black female CEO of a major streaming service, and a career in advertising and marketing seemed like the right way to go. According to her dad, marketing was a good choice because she was great at selling ads for her High School’s yearbook, so it made sense to pursue a major in the field.

So, Janae designed a plan: she would go to Tennessee State, graduate with honors, get her master’s, go through a few internships, and then make a difference for all those who were not being represented. While Janae’s master plan seemed to be infallible, she failed to take a major factor into account – she didn’t know anyone in the industry, and she had to find out the hard way that in this field who you know is more important than what you know.

She learned that the struggles to break in are systemic. The industry needs students like Janae regardless of her ethnicity, however, she like many of her peers face an uphill battle as the monolithic nature of talent in agencies make her less likely to have any contacts who can guide or refer her for roles in the industry.

“The issue is access; the whole industry is built around connections. That’s what makes you… As a Black young woman, I felt inadequate; I didn’t know anyone, so it was very intimidating at the beginning”

Just like Janae, young talent across regions is falling out of love with the idea of a career in the industry. According to a 2020 study conducted by The Agency Collective in the UK, only 39% of agencies employ talent from underrepresented groups, creating a serious gap in the industry’s overarching network. Some emerging talent have come to the realization that they can be more talented, or work harder, but if they don’t have the right connections they simply won’t advance in their careers.

Emerging talent often lack understanding of what a career in the advertising industry entails, which generates a myopic vision of what a marketer or advertiser does in the real world as well as frustration and disenchantment when they hit the job market.

In an interview with Egg Strategy, Raphael, a young professional from Chicago lamented – “I wish I knew what this really was about – that I’d be the only Black person in the room, but also that I should have taken a few courses for Python or Google Analytics… that it’s not just about being creative. Seems like other folks knew this, but unfortunately, I didn’t”.

While Janae claims that she “will keep pushing forward” and feels blessed to have built a solid network thanks to AEF programs, other young professionals might lose the passion that initially drove them to pursue careers in marketing and advertising as they encounter one roadblock after another.

In 2020, 50% of kindergarteners were from non-white ethnic groups significantly underrepresented in the advertising industry(Source).  According to Pew research, post Millennials, currently aged 10 to 25 are the most diverse and well-educated generation yet (Source).  How then will a monolithic industry market to and attract talent among this group that is so underrepresented among their ranks?

The cost of not addressing this issue could have catastrophic consequences for the industry. The time is now for the industry to adapt or die.  The call to action has never been more existential; let’s celebrate diversity in our industry and allow this new diverse and highly educated next generation of marketers can see their faces among the C-Suites of Marketing