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The questions of whether, why, and how to invest in diverse-owned media and partnerships may appear complex in today’s industry environment. However, at their core, they remain quite simple.
On the complex side, sentiments around brand diversity, equity, and inclusion (DEI) programs have fluctuated in recent years, from brands going all-in in 2020 to a recent string of reductions and cuts. Economic uncertainty, increased politicization, and significant financial pressures have also weighed down some businesses’ supplier diversity programs.
On the other hand, evaluating the benefits of a supplier diversity program and then implementing (or improving upon) such a program is fairly straightforward. Agencies are tasked with driving revenue for their clients by connecting with target audiences via resonant, strategically placed and personalized messages. As consumer demographics grow more diverse, investing in media inventory and data providers that help marketers reach these audiences often calls for partnerships with diverse-owned suppliers.
Tapping into diverse suppliers is an impactful strategy for both reaching target audiences and engaging new clients. As such, staying ahead in the industry requires agency leaders to understand this evolving landscape and cultivate diverse-owned supply partnerships thoughtfully and proactively.
While they may seem like a newer part of marketers’ strategies, supplier diversity programs—which are established by businesses to encourage partnerships with women-owned, ethnic or racial minority owned, veteran-owned, LGBTQIA+-owned, or disabled-owned suppliers—are nothing new for many legacy brands. GM, for example, was one of the first to establish a formal supplier diversity program in 1968. The program, which serves to drive “economic parity, social relevance, and business value,” is still in effect today.
In more recent memory, 2020 was a critical year for brands’ engagement with DEI, as many brands committed or re-committed to working with diverse-owned suppliers (and, in particular, Black-owned suppliers) in response to the George Floyd protests.
Since then, research on the industry’s progress in terms of integrating diverse-owned supply has shown mixed results. For example, while spending on diverse-owned media by holding companies and leading independent media agencies increased by over 50% in 2022 (as measured by SMI), total spending on diverse-owned media made up less than 2% of all the spend that year. Similarly, an ANA survey found that both interest and investment in diverse suppliers grew from 2022 to 2023, but businesses’ investment lagged behind the broader industry’s interest. Along the same lines, a June 2024 ANA study concluded that the industry has progressed in its inclusive marketing efforts, including its efforts to integrate diverse-owned supply, but “the gap between intention and industry-wide impact remains significant.”
At the same time, some brands’ DEI programs were dialed back in recent years, and diverse-owned publishers have reported slowdowns and cuts to marketing budgets dedicated to diverse-owned supply. This backtracking can be attributed to both economic instability and a shifting political climate, marked by events like the US Supreme Court overturning affirmative action in college admissions in 2023, the backlash Target and Bud Light received to their Pride month engagements that same year, and a rise in criticism of DEI programs from conservative legislators and activists. In this context, some agency executives experienced clients withholding portions of budgets allocated for diverse-owned media spend until the outcome of the 2024 US Presidential Election was determined.
Despite these fluctuating sentiments around DEI and supplier diversity programs, embracing supplier diversity enables agencies to achieve multiple goals: meeting the rigorous standards of major clients, differentiating themselves to mid-market brands, and driving revenue for their clients by connecting with an increasingly diverse consumer base.
Current industry discussions around DEI may distract from the fact that curating diverse-owned supply is a profitable proposition for agencies.
For one thing, it can be table stakes for working with major brands. “Supplier diversity is deeply embedded in the business strategies of many larger enterprise clients and holding companies,” says Lois Castillo, Head of Diversity, Equity, and Inclusion at Basis. “It has become a critical expectation for the partners they collaborate with, reflecting a commitment to inclusive and equitable practices throughout the supply chain.” Many of these businesses have thoughtful procedures associated with how they engage with diversity, equity, and inclusion within media execution, media buying, and marketing—for example, Target aims to spend over 5% of its annual media budget with Black-owned companies. As such, any agency that wants to work with Target (or brands like it) must be able to offer a curated selection of diverse-owned supply, as well as the ability to leverage those partnerships to help clients meet their DEI spending commitments.
While mid-market brands may not have the same degree of specifications around supplier diversity, curating diverse-owned media can help give agencies a competitive edge. “If an agency can develop a strategic plan with an audience strategy and an inventory strategy that has diversity built into it, and they’re able to tell a meaningful story about the impact of that strategy, that can be a significant differentiator to mid-market clients,” says Dan Wilson, Group VP of Integrated Client Solutions at Basis.
Political discussions around DEI aside, marketing investment in diverse-owned media inventory and data partners is informed by consumer demographics, which are growing increasingly diverse. Advertisers who aren’t working to connect with diverse audiences could be ignoring close to half of the impressions available to them, leaving the significant buying power of diverse audience segments on the table. While partnering with diverse-owned suppliers isn’t the only way to connect with diverse audiences, it’s often the most authentic way to do so.
“For brands, genuine organic growth stems from authentically connecting with audiences beyond their traditional targets,” says Castillo. “Any forward-thinking CMO or leader focused on driving sustainable business growth understands the importance of reaching new communities. This requires not just showcasing the value of their product or service, but also fostering meaningful connections with diverse audience segments.”
Ultimately, by thoughtfully curating partnerships with diverse-owned suppliers, agency leaders can set themselves up for success when going after larger brands, differentiate themselves to mid-market brands, and drive more revenue for their clients across the board.
While some advertising platforms come with a curated selection of diverse-owned suppliers, agencies will likely want to curate additional partnerships that meet their clients’ particular needs.
Proactivity is key here, because if agencies don’t have a repository of diverse-owned suppliers in place before meeting with a potential client, they may lack the organization, fluency, and measurement capabilities to satisfy that company’s supplier diversity requirements. “If you take a proactive approach to building your partnership structure,” says Wilson, “you’ll be better prepared to activate for your clients depending upon how they want to engage with the space.”
Of course, agencies must curate these partnerships thoughtfully and intentionally. The goal is to integrate diverse-owned suppliers, with ownership spanning a variety of diverse identities, across the entire supply ecosystem—from publishers, to data providers, to measurement partners and beyond. It’s worth noting that some brands may prioritize working with certified diverse-owned suppliers, so agencies will likely want to do the same.
The process of finding and vetting these partners shouldn’t look any different than an agency’s process for evaluating any other partner. “Have conversations with people at these companies,” says Wilson. “Ask questions, see whether they’re aligned with your organization’s core values, and use that information to evaluate whether to move forward.”
Finally, agencies should ensure they have some kind of reporting system in place for tracking their clients’ spend on diverse-owned supply. For example, tools like Supplier.io can help agencies track their media spend with diverse-owned suppliers.
Though supplier diversity programs have been around for decades, many agencies are still refining their approaches to curating partnerships with diverse-owned suppliers, integrating those partnerships into their strategies, and demonstrating their value to clients.
This is an area in which agencies should strive to excel, given that diverse-owned supply is a “must-have” for many larger brands, and a great way for marketers to connect with key target audiences. Ultimately, by approaching supplier diversity with proactivity and thoughtfulness, agency leaders can drive new revenue and gain a competitive advantage in the marketplace.