Campaign US, End of Year 23

By Bailey Calfee

On May 25, 2020, George Floyd was murdered by Minneapolis police officer Derek Chauvin, who knelt on Floyd’s neck for over nine minutes while two fellow officers watched. Floyd was one of 1,152 people killed by U.S. police officers in 2020, and his death started an uprising as the country forced institutions to reckon with deep systemic inequality.

In the advertising industry, those demands were met with promises to increase diversity in campaigns and within teams. Agencies and brands created new positions and departments to address DE&I shortcomings, and reexamined business structures to eliminate institutional bias.

By 2023, the limits of these commitments became apparent.

High-profile backlash to LGBTQ+ inclusion by brands led many to abandon or pull back on their displays of Pride, while advertising blunders sparked allegations of racism and concerns regarding marketing teams’ internal diversity measures.

Meanwhile, the chief diversity officer role is increasingly susceptible to elimination as companies tighten their belts and lay off staff amid fears of recession. Three years after Floyd’s murder, industry leaders told Campaign US that the industry's commitment to racial parity is still lacking.

According to Dawn Wade, co-founder and chief strategy officer of multicultural creative agency Nimbus, industry norms of calculating DE&I impact by revenue gains sets the system up for failure.

“DE&I doesn't have a return that hits your bottom line — it's an expense, it's not a revenue generating opportunity,” she said. “Of all the efficiencies and good work that DE&I has done, it hasn't generated money for the brand, so it's going to get cut — and that's what we see happening across the board.”

When averting risk is prioritized in the name of maximizing profits, some brands have made plain their limited interest in pushing for progressive change.

“I don't think that people of color in general are surprised at the downward trend of DE&I,” said Tyra Jones-Hurst, managing partner at agency Oliver and founder of its inclusive marketing arm, InKroud. “We've seen it time and time again, where there's going to be change and then nothing happens.”

But rather than give up on making progress, adland must examine its mistakes and rethink its strategy as the country becomes more diverse – and consumers and employees alike demand change.

A purpose-less Pride

In March, ABInBev’s Bud Light commissioned trans influencer Dylan Mulvaney for an Instagram partnership that involved sending her a custom can of beer with her face on the label to celebrate her one-year anniversary of beginning her transition.

What ensued was a vicious reaction from a conservative faction of the brand’s audience: Stock prices plummeted, buyers backed out and truck drivers with Bud Light branded vehicles were attacked along their distribution routes.

But instead of reiterating its support for Mulvaney, Bud Light instead distanced itself from the controversy. This broadened the backlash to both sides of the aisle and undid any attempts at diversifying Bud Light’s audience, a strategy shepherded by its first woman marketing VP in its 40- year history, Alissa Heinerscheid. ABInBev suspended both Heinerscheid and her direct supervisor in the aftermath, and Bud Light’s advertising has reverted to tie-ins with football stars and country musicians.

In the wake of the fiasco, many brands that had previously expressed support for the LGBTQ+ community went silent or at least muted their marketing efforts during Pride month.

Perhaps energized by their success with Bud Light, conservative media targeted other brands that activated for Pride to varying degrees of success. While The North Face refused to backtrack on a Pride campaign starring drag queen Pattie Gonia, Target moved its Pride collection to the back of some stores and pulled a collaboration with a trans designer after untrue allegations circulated that the company was selling trans-inclusive swimwear to children and stocking products with Satanic themes.

Wade noted that the speed with which brands backtracked around Pride commitments this year proved that their initial DE&I commitments were rooted in risk aversion, and therefore were performative.

Rash decision-making to retreat around Pride exacerbated the backlash by alienating both sides, leading to more financial damage.

“Target, for example, made those radical decisions before there could be any counterbalancing from those that support [Pride] efforts, which could have actually balanced losses from that perspective,” Wade said.

In the name of risk-aversion, she added, Target and Bud Light reacted “before [they] recognized that the system was going to normalize itself.”

Had either brand played the long game and stood behind their inclusive decisions, the tide would eventually have turned in their favor, Jones-Hurst agreed. Similar to trading stocks, one doesn’t cash out at every dip.

“You have to trust and believe in the change that’s coming about and that you will get more gain in the end — and not just financial gain, but brand loyalty, brand awareness and new consumers from an audience segment you might not even have tapped into.”

When risk aversion leads to community abandonment, it becomes clear that a brand’s values do not align with its promises.

“If you really stood by the principles and values of what you were creating, then why would you pull it back?” said Theresa Sarbeng, head of DE&I, North America at Oliver. “It shows who your company is if you're like, ‘oh shoot, we're gonna lose some profit.’”

Lack of accountability breeds “easy” inclusivity

Three years after the business world began to prioritize DE&I, it seems to no longer be viewed as a business essential. According to industry leaders, this reflects a lack of accountability from the industry as well as consumers.

“There have been countless conversations, countless promises [to prioritize DE&I], and I feel like there is a question around accountability,” said Leila Fataar, founder, CEO and CSO of cultural relevancy agency Platform13. “Even in 2020, I thought, ‘Who's going to check all this stuff?’ There was so much promise.”

Nimbus’ Wade argued, “Many of those commitments were a facade, and will continue to be a facade until the consumer decides that it's important to them,” adding that consumers as a whole have not abandoned brands who have failed to meet promises made in 2020.

“[Brands] recognize, ‘they’re not holding our feed to the fire to make sure that we are delivering on those [promises],’” she said. “So they took a tentative step back to see if that would be felt, and when there was no blowback or accountability, now they’re more comfortable with taking two feet back — and they will continue to backtrack.”

Similarly, ABInBev’s earnings took a hit in the aftermath of Bud Light’s controversy, its stock prices have since stabilized to about $2 more per share than their worth in January. And as the controversy has faded, more than 40% of consumers that boycotted the brand in April are more willing to come back to Bud Light.

As brands continue to lack accountability for their actions, people from marginalized communities are most likely to continue to push for inclusive marketing — but their voices are less likely to be heard.

Leaders agreed that while inclusivity has not fallen completely by the wayside, brands have pulled back from taking big risks.

“I wouldn’t say that I see a shift toward less inclusivity, but I see a shift in easy inclusivity,” said Jones-Hurst. “The quick wins were easy — setting a vision, being very vocal about your commitments, setting metrics — and then the hard part comes with the endurance and shared accountability,” said Sarbeng.

Honing in on the right issues

According to Natalie Silverstein, chief innovation officer at influencer marketing agency Collectively, brands are now honing in more carefully on which issues their consumers want them to take a stand on.

“What we saw in 2020 was that every brand was feeling like they needed to comment on everything, and I think that that's definitely shifted — brands have gotten more selective about what they focus on by really hearing their customers,” she said. “There’s not as much of a knee-jerk reaction from brands to say something immediately.”

This strategy has been most noticeable amid the war in Gaza, with very few businesses willing to speak in support of either side. Though it’s a nuanced topic that doesn’t affect every U.S. brand, brands were very quick to risk speaking out in 2022 when the Russia-Ukraine war began.

According to Silverstein, brands that have shifted the ways they react to issues have in fact shown who they want as their customers.

“Seeing these patterns, the smartest marketers are focusing on understanding, ‘Who are my customers of today, who are my customers of tomorrow, what am I trying to communicate through this brand effort and what risk am I willing to take to go there?’”

The great DE&I layoff

As brands grapple with how to react to societal issues around inclusion, they’re grappling with a loss of DE&I leadership.

A Paradigm study found that companies are less likely to have had a DE&I budget or strategy in 2023 as opposed to 2022, though it noted an increase in companies with senior DE&I leaders during that time.

But any uptick in DE&I leadership has been overshadowed by industry-wide layoffs. DE&I roles added 2020 getting cut as early as 2021, with the number of job losses surging in 2022. DE&I professionals were disproportionately laid off in 2022, according to a study from Revelio, and while final stats are not yet available for 2023, anecdotal evidence suggests that DE&I positions have continued to be disproportionately laid off or eliminated amid fears of a recession.

“We can see what has been deprioritized, we can see the layoffs, we can see the heads of diversity being removed,” said Fataar.

Sarbeng said she was afraid for her own job, and shared her concerns from “watching different companies cut very established, very strong DE&I leaders across the industry,” with her CEO. “Many companies are almost blaming DE&I for not achieving their goals.”

Fataar argued that DE&I layoffs are due to failures to properly integrate the department as a core business function.

“It should be horizontal throughout the business,” she said. “DE&I needs to go across the business, not just one department, because as soon as you’re deprioritizing, you just get rid of that department.”

DE&I as an easy internal fix also doesn’t work in the long run.

“To try to change a system where the dominant majority have been benefiting from systemic racism and asking them to give more power to a group that has been historically marginalized takes time and investment,” said Sarbeng. The disconnect is on the original structure.”

Inclusive marketing blunders underline lack of diverse talent internally, or at least a lack of those with power to sway campaigns.

For example, a diversely cast KFC Canada campaign ended up drawing accusations of racism for its out of home element, which showed Black consumers eating fried chicken without utensils. In a previous piece on the campaign, Jones-Hurst cold Campaign US that the OOH imagery “dampened what should have been a cheeky and refreshing take on an old slogan into a classically harmful and stale stereotype for the Black community.”

Recently, a global Zara Atelier campaign drew backlash for the imagery’s resemblance of photos from the war in Gaza, showing mannequin bodies and limbs wrapped in white tarps. A Muslim person on staff could have pointed out that the images were reminiscent of an established Muslim burial tradition.

“Brands don't know what they don't know, and until they open their doors and are willing to be exposed, they won’t — that's why you have to be intentional about who sits at your table,” said Wade.

Having diverse talent on staff can not only limit potential blowback from a problematic campaign, but also underline the importance of standing by inclusive efforts.

Fataar noted that ABInBev’s decision not to stand by Mulvaney reflected its lack of awareness on the impact of such a move, whether that be threats to Mulvaney’s life or a subsequent lack of opportunities for other trans influencers.

“Diversity and representation cannot only be on the output — it's got to be on the input, or else you're not checked as a brand, you're not challenged internally and it will hurt your brand at the end of the day.”

Where does the industry go from here?

The lack of accountability and the pullback of DE&I efforts in 2023 shows that brands need to set clear values to inform their course of action.

“Shifting cultural relevance from a marketing ‘nice to have” to a business strategy is what I’ve always championed, because then it goes throughout the business and the output is different,” Fataar said.

This is a responsibility for brands, she said, “especially big global brands, because they've got a big voice in the world. They can influence things, they can stand for something.”

Brands also must see DE&I as valuable, rather than costly. “Brands that commit tend to do better over time,” Silverstein pointed out. Likewise, “If it's just empty behind those messages, consumers feel that.”

Sarbeng acknowledged the challenge for brands and agencies. Oliver, she said, “didn’t cut our budget and stays investing [in DE&I], yet it’s still very challenging. You can constantly feel like you’re failing, but it’s going to cost time and money to make systemic change, which is why you can’t ever give up even when it feels like you’re taking two steps back.”

Though this year was full of high-profile setbacks, there are bumps on the road to progress.

“We’ll have this huge leap forward and then we're going to have some setbacks,” said Silverstein. “Our responsibility is to continue to emphasize and recommend to our clients how to operate in these spaces and to always be pushing for authentic representation wherever we can.”

In the long term, “if marketers and business leaders are not adapting to an inclusive and diverse workplace and if you aren’t leveling up your leadership in those areas, you are going to fall behind and lose profit,” said Sarbeng.

“I think they’re waiting for us to go away, but we won’t,” added Jones-Hurst of people from marginalized groups. “As generations keep shifting and as time keeps going, we become more and more outspoken — and we’re the ones with buying power.”


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