Identifying diverse marketing partners to drive innovation, business growth, brand success and agency equity
In an earlier article, we focused on how marketing procurement can drive better growth in DEI spend through the agency pitch process and contract management.
Today, we will focus on how to discover the right agency partner to work with and ‘how to’ be more inclusive and equitable in the agency pitch process.
In many industries, but especially in the advertising and marketing industry, it is very difficult to find agency partners that “fit the bill”, both from a capabilities standpoint and from a diversity standpoint.
It all starts with being more aware of where to look, how to engage and what work diverse agencies are capable of. The conversation with Chris Kenna led me to learn about “Certifiably Diverse” a fully flexible system accessible through APIs or web-based interfaces. In today’s increasingly customer socially conscious markets, businesses, especially Fortune 500, are constantly seeking to better identify and foster meaningful and impactful supplier diversity.
The initial solution for many large advertisers has been to put the responsibility on their tier 1 marketing partners — the Agency of Record for media, creative or other marketing discipline to deliver the DEI results. Agencies are asked to find and utilize diverse vendors across their advertising supply chain to deliver on the client scope of work and business requirements. The agencies then report back to the client in the form of a Tier 2 spend report. Often the agency is then tasked with growing this percentage of diverse spend on an annual basis based on the client’s internal DEI programs. At times, the way this percentage is met is with diverse vendors who supply catering services or other operational opportunities for the work, not the creation or production of the campaign.
Another solution for clients has been to focus on finding diverse partners through community outreach, such as a company’s specific Supplier Diversity Program, concentrated on building an internal knowledge base, including vendor information, often through a diversity supplier portal. This is an adequate solution for many clients, as any diverse company that wants to work with the specific client can complete a profile on the individual client portal.
The issue with this is approach is that the client will only have access to companies that set up their profile on the client specific portal and will miss out on a huge number of diverse companies that just have not completed the individual profile — simply because “their paths have not crossed”. This could be ignored if the client may only want to work with companies that seek out opportunities to work with them directly.
On the other hand, for a small/medium business and/or diverse owned company, it is an ENORMOUS undertaking to sign up for every individual company’s diversity portal or ‘way’ of doing business as a diverse business with that entity. At its most basic form, conversion rates of “very qualified leads” are about 5% — leaving the diverse company to do a lot of heavy lifting — each portal requests different and unique information and to complete one profile may take up to 30 minutes. This, unfortunately, results in the odds against a company client finding the right agency partner with the right capabilities. I was never very good at statistics — but this isn’t a winning concept for either side.
But do not take my word for it. Supplier.io, the leading data analytics and SaaS provider of supplier diversity management solutions, released the 2023 Supplier Diversity Benchmarking Report in February this year (2023) — it is its first-annual analysis of over $1.4 trillion in actual supplier spend across 466 companies and more than 15 industries. The report found that companies on average spend 3.6% with certified diverse suppliers — with a best-in-class average of 9.1% — and 7.5% with small and diverse suppliers, which highlights the importance of looking at consistent data. Diverse spending is highly concentrated, which may be a risk: 80% of companies spend less than 5% with diverse suppliers, and the top 10 diverse suppliers receive 17% of all diverse spend.
Specifically for marketing procurement, the Association of National Advertisers (ANA), World Federation of Advertisers (WFA) and the 4As have done a good job in curating a list of diverse companies serving the advertising and marketing community. These curated lists are also based on diverse agencies and marketing companies doing the outreach to these entities, coupled with community outreach and conferences hosted by the associations, to get elevated and engaged in the first step of awareness for their creative capabilities and marketing/media experience.
In addition, Marketing Procurement & IQ (MxPIQ) compiled a great list of 24 organizations that focus on specific groups of diversifications and eight certifications that provide lists of their members. Although progress has happened, all of these membership lists only list their own members, and many of the member lists are hard to search and the results are not very user friendly.
Where do we go from here?
Being a founder and owner of a minority business, the overall industry’s attempts to embrace more diversity and showcase diverse agency talent and capabilities has opened my eyes to all the above challenges. However, I am impressed by the great efforts and energy that are being put into developing the solutions we all need. As Tara J Agen, former HP Inc head of Marketing, Operations that included the Agency Practice said at the ANA AFM conference in Phoenix earlier this year, “We need to do more brand business through agency partners that are like all of us, not just some of us. This is how you grow and impact your business by having people that can represent more opportunity of who can purchase your products/services.”
While I think we all have a community responsibility to do everything we can to raise equality and deliver agency equity in our industry, there are a few first steps we can take and focused ways we can start.
I had the amazing luck to come across Tracey Grace during my extensive search for a better supplier diversity solution than the time-consuming individual client portal. She was kind enough to take some time out of her busy schedule to help me share her experiences with a broader audience. Diversely owned businesses need to find that advocate to help them, like Tracey helped me, to elevate their business and show them ‘how’ to work with their business or brand.
The Birth of a one-stop-shop Supplier Diversity System
Tracey Grace’s opportunity to drive supplier diversity arose during a briefing with a Pennsylvania hospital’s supplier diversity spend. Though Tracey’s company (IBEX IT Business Experts) was not a software developer, she was challenged to create a supplier diversity vendor management system. The successful project took a year to complete, complying with all HIPAA regulations and security requirements.
The system she created allowed remote buyers to access the vetted vendor pool, including woman-owned, minority-owned, LGBTQ-owned, disability-owned, and veteran-owned suppliers, and grew the hospital’s supplier diversity program by over 400% in three years. Similarly, Tara Agen and her Agency Practice + Marketing procurement team created “HP Agency Marketplace”. This automated/AI driven platform helps Marketers view an agency, their work, their key contacts and their ratings/reviews while be attached to a more automated SOW to purchasing system. To elevate DEI, HP Marketplace features diverse agencies on the landing page when HP celebrates diversity internally. This platform has helped showcase diverse agency suppliers to help the CMO drive more diverse spend as part of HP’s commitment to supplier diversity that the HP board directed the c-suite to focus on post George Floyd.
Certifiably Diverse: The Product
Realizing the potential to expand her concept, Tracey hired a software architect to design her vision. Investing her savings, she developed “Certifiably Diverse,” a system accessible through APIs or web-based interfaces. An interesting fact here is that as the company, IBEX, is also minority owned, Tracey has been the case study as a diverse supplier, walking the walk and now she is talking the talk.
The system has three distinct user groups, including 1) brands (companies), 2) ambassadors (like chambers of commerce), and 3) suppliers (diverse companies).
It allows users to report on diversity spend, manage compliance, automate mundane tasks, and keep records for up to eight years for risk and compliance. Due to its technology architecture, it is compatible with most client-side IT systems. Clients who have access to the application can effectively generate much better data by combining the current internal supplier list with the application data and often clients find that some of their current suppliers are diverse, generating an instant jump in reporting accuracy.
During my conversation with Tracey, we discussed how the application can be used within a client organization. Certifiably Diverse serves various roles within organizations. It could be a dedicated supplier diversity team or marketing procurement professionals handling supplier diversity. The flexibility of the application allows different members of the procurement team to access information in a way that suits their role. This ensures that only vetted and authorized vendors are engaged, streamlining the process and minimizing risks. Moreover, the ability to collaborate with various suppliers promotes supplier diversity, an aspect that is becoming vital in today’s economy. For example, a client-side DEI or marketing procurement professional can identify DEI companies and share with their agencies, effectively driving an increase in both Tier 1 and Tier 2 spend across the client portfolio. The diversity manager’s ability to find and provide a comprehensive list of vendors alleviates the common challenge that agencies can’t find diverse suppliers to work with. This not only enriches the supplier base but also fosters innovation and inclusivity. The application also allows the client organization to understand and manage their diverse suppliers, providing reporting and compliance assurance for internal and external stakeholders.
As in any conversation within the industry, we touched upon AI and how it will change the world we live in. In today’s world, procurement is about developing dynamic ecosystems, embracing diversity, and being prepared to adapt to emerging technologies like AI.
Discussing the challenge of integrating AI into marketing procurement, it’s clear that complacency and resistance to change will hinder growth and opportunities. AI is not a fleeting trend; it’s a transformative force that is reshaping industries. Those who can find innovative ways to work with AI, particularly by engaging with diverse organizations that think differently, will lead the way into the future.
This requires a forward-thinking approach and the willingness to engage with emerging ideas. It also highlights the importance of seeking out small organizations with fresh, innovative ideas that might otherwise be overlooked.
Links:
https://www.mxpiq.com/chris-kenna-marketing-procurements-role-in-driving-diversity-and-inclusion/
