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The Approaching Wave: The Companies That Will Force Ad Agencies to Embrace Diversity

For the last several months, Americans from coast to coast discussed issues of race and ethnicity.  Not everyone wanted to weigh in on the topic — but it’s difficult to ignore family, friends, and co-workers discussing player protests at athletic events, news coverage of unrest in minority communities, or even the presidential election.  As much coverage as each of those events have received, another discussion of race and gender has been taking place among advertising agency executives, and that discussion is being led by the brands they represent.

The pattern has become all too familiar.  Ad agencies claim a commitment to diversity; a newspaper article will highlight allegedly sexist or racist behavior that seems more “Mad Men” than multicultural; a lawsuit will follow; ad executives will say the bad behavior was a one-off, that they addressed it, and will vow to double down on their commitment to diversity … only to have another ugly incident come to light.  Wash, rinse, repeat.

Is Madison Avenue really full of bad behavior?  Is anyone taking effective steps to address the culture?  Is there a secret recipe to promoting diversity? Ad agencies have gotten tired of answering those questions, and so have the brands they represent.  Several brands with a collective ad-spend in the billions of dollars are experimenting with ways to ensure accountability on diversity. General Mills, HP, & Verizon are leading a wave of forcing ad agencies to embrace diversity.  How well each company does may just change the agency culture more than the agencies themselves have been able to.

In August, General Mills announced that any agency seeking to represent its iconic food brands (including Cheerios, Pillsbury, and Yoplait) needs to have a diverse creative staff.  Specifically, GM called for at least 50% women and 20% people of color on the creative teams doing the work.  With over $700 million in annual ad spend, General Mills earned considerable praise, and a fair bit of backlash over what their critics are calling quotas.  Shortly after, Antonio Lucio, Chief Marketing Officer for HP, demanded that HP’s agencies diversify their workforce.  Instead of hitting specific targets, Lucio gave all agencies working with HP 30 days to submit their plans for achieving a diverse workforce in order to be a part of HP’s $1 billion ad spend.  Shortly thereafter, Verizon cited HP’s example in making the same request of their agencies.  In 2015, Verizon spent $2.7 billion on advertising, among the highest ad spends in the country.

This is the not the first time that General Mills, HP, and Verizon dealt with diversity in a highly visible manner.  General Mills’ “Cheerios” brand received attention when one of their ads featured an interracial couple with a mixed-race daughter.  Many viewers welcomed a commercial that looked like their own family and friends, and others were aghast.  General Mills stood above the fray, saying the company wanted to “celebrate” all types of families.  HP already has one of the most diverse boards in tech, with five women (including CEO and Board Chair Meg Whitman) and people of color comprising nearly half of its board.   Verizon has long received awards for its commitment to diversity, including making the Best Companies for Multicultural Women list every year since 2005, and the Top Company for Executive Women list.

Nor are these three brands the first to attempt to diversify staffing within their industries.  Facebook very publicly announced a “point system” for recruiters who find females and diverse candidates as over 90% of its staff is either white or Asian.  The system made little difference in the makeup of its workforce, with Facebook blaming the pipeline … essentially saying not enough talented women nor people of color exist.  As a recent LeanIn/McKinsey study makes clear, that is not the case.

Industries have focused on diversity for decades.  Even prior to entering the workforce, many nonprofits and industry-backed programs help women and students of color get into college for specific majors where they are not well-represented.  In the last decade or so, nonprofits and industry-backed programs have also helped students earn jobs in those industries where historically, there has been under-representation.  For years the industries and companies themselves have identified women and people of color to hire and promote.  If a company is unable to retain diverse talent, or unable to find the diverse talent that is already in the system, it no longer seems negligent on their part, it appears intentional.

Companies constantly launch diversity programs to check a box.  Unfortunately, many are not tied to business metrics such as measuring the impact on retention, or leveraging the workforce for new business opportunities.  In absence of business objectives, Diversity and Inclusion runs the risk of only being lip service.  The decisions by General Mills, HP, and Verizon represent brands admitting that, to move the needle on diversity, they need the support and collaboration of their partner agencies.  “We owe this to ourselves, to each other and to future generations,” Lucio said in a letter to agencies. “By making the important and necessary changes today, together we can bend the arc of history in favor of inclusion and opportunity. Now comes the proof of our commitment.”

Thinking through Diversity & Inclusion is difficult, and tying it back to business goals is more difficult still.  If approached properly, the companies that invest the time and resources into having a diverse workforce and an inclusive workplace can reap benefits for many years to come in terms of retention and even generating additional revenue.  General Mills, HP, and Verizon are the first to force advertisers to try a new approach to diversity. They will not be the last.

John Lewis, Jr., former Chief Diversity Officer of Coca-Cola, recently told some Raines International staffers that “there is a wave coming. You either ride that wave, or get crushed by it. But everyone can see the wave coming.”

What will you do?

Pauly Rodney is Vice President and Co-Head for Diversity and Inclusion at Raines International.