Why Is Diversity Marketing Important?
Companies benefit from prioritizing diversity and inclusion in their marketing strategies, according to new survey data. Consumers are more likely to purchase from brands when they see themselves and their values reflected in advertising campaigns.
At some point in the past few years, your company has probably discussed workplace inclusion and equity. You might’ve considered your corporate social responsibility or how your company’s values promote positive change in both in your industry and in your community.
Companies are expected to use their influence to actively weigh in on important social issues ranging from minority representation to the environment. In fact, many marketing and design firms now consider these ideas when working on branding projects with clients.
Amid the Black Lives Matter movement and the ongoing effects of the COVID-19 pandemic, the pressure has only increased. Brand authenticity is a must-have for successful businesses. People want to see their own values reflected by the companies they support before handing over any money.
Top Design Firms surveyed 500 people in the United States to dive deeper into the growing trend toward diversity and answer an important question for many of today’s brands: What are the benefits of investing in diverse, inclusive, and socially conscious marketing strategies?
Our data reveals several key benefits. Brands with a clear commitment to diversity and inclusion are able to reach into new markets, build stronger relationships with their audience, and increase revenue.
- Less than half of consumers agree with how their race is represented in social media advertisements and marketing campaigns. Only 43% believe their race is represented frequently and 34% believe the representation is accurate.
- Races vary in their opinions of representation in advertising. Over half (51%) of white-identifying consumers believe that they are frequently represented in ad campaigns, compared to 35% of non-white consumers. Just 29% of non-white consumers believe their race is accurately represented, the number increases to 40% for white consumers.
- If two brands offer the exact same product, one in three consumers (34%) would consider each brand’s commitment to diversity and inclusion when making their final purchasing decision.
- About two-thirds of consumers (64%) are at least somewhat likely to make an immediate purchase after seeing a brand advertisement they consider to be diverse.
- The likelihood of an immediate purchase following a diverse ad is consistent with both white and non-white consumers; however, 73% of people ages of 18–34 are at least somewhat likely to make an immediate purchase, compared to 65% of people ages 35–54, and 61% of people over age 55.
- The majority of consumers (67%) are at least somewhat likely to make a second purchase from a brand they believe is committed to diversity and inclusion.
Diverse Ads Build Your Connection to Your Target Audience
It’s simple — people want to buy things that they’ll benefit from. Because of that, your advertisements and marketing campaigns need to do two things:
- Demonstrate the perks of your product or service
- Feature people that look like and act like your target consumers
Accomplishing these goals is increasingly difficult when you’re trying to reach people in different locations or with varied cultural backgrounds. Forbes describes this challenge as building customer intimacy; developing a deep understanding of your customers’ values, struggles, and points of view.
It’s a time-consuming commitment, but the first step is making sure your audience feels that they are both frequently and accurately represented by your brand.
Our data found that less than half of consumers believe that their race is frequently (43%) or accurately (34%) represented in social media ads or marketing campaigns. This implies that there is plenty of room for brands to improve their connection with their customers.
Frequency of Representation
Less than half of all consumers (43%) believe that they frequently see themselves represented in advertisements, but that number differs when broken down by race.
While 51% of identifying consumers believe that they are frequently represented in social media ads or marketing campaigns, that number drops to 35% for non-white consumers.
This gap illustrates the need for businesses to improve how often they include people of color in advertising and branding.
It’s important to note, however, that businesses are trending in a positive direction.
Compared to our 2020 analysis, an Adobe study from 2019 found that out of 1,000 U.S. adults, only 26% African-Americans, 10% of Hispanics, and 3% of Asians believe they are represented in advertising.
Jacob Pinkham, Founder and CEO at In Smooth Waters, a water safety site, has noticed the efforts to diversify brand and advertising campaigns.
“I’m seeing racial inclusion in TV and social media advertising everywhere now,” he said. “I often felt uncomfortable when I saw a majority of white models or actors in a campaign.”
Michelle Ngome, a diversity and inclusion marketing consultant for Line 25 Consulting, shares the same observation, but believes there is still a lot more to be done.
“I do think black, indigenous, and people of color (BIPOC) are not equally represented,” Ngome said.
“I do think black, indigenous, and people of color are not equally represented.”
There is tremendous opportunity for brands to strengthen their connection with their customers by simply diversifying the profiles they include in their advertisements or marketing campaigns.
Accuracy of Representation
We also asked different races how they felt about the accuracy of their race’s representation in the advertisements they’d recently seen.
Just 29% of non-white consumers believe that their race is accurately represented, compared to 40% of white consumers.
While white consumers feel more accurately represented, the fact that less than half of both groups agree with how their race is portrayed implies that there is still a need for brands to improve their representation across the board.
Pallah Burdis is the founder of Pallah.Co, a mental wellness business. She agrees that there is much to be desired in the way her race is represented and used in social media and TV advertisements.
“As a Black woman, I still feel there is a lack of accurate representation by major brands and networks,” Burdis said. “We can argue that there is some representation mainly in spaces just for us, however, our culture is appropriated by the masses.”
Keyoka Kinzy, Content Specialist at Online Optimism, a digital marketing and design agency, admits there has been an uptick in diversity in recent ads, but agrees with Burdis on the issue of accuracy.
“There’s hardly any representation for dark-skinned people and even less for darker-skinned women with a particular hair texture,” Kinzy said. “These people exist in the world but not on our screens, and that’s an issue that companies are slow to rectify.”
“These people exist in the world but not on our screens, and that’s an issue that companies are slow to rectify.”
Companies have a lot to gain from accurately representing diverse cultures in their marketing campaigns — a stronger brand identity and more respect from customers is just the start.
Consumers Believe Inclusive Ads Are Important
Imagine yourself in this situation: you’ve spent an hour looking for a specific product and you’ve narrowed your list down to two different brands that each carry exactly what you’re looking for.
How do you decide which brand to purchase from?
One in three consumers (34%) would consider each brand’s commitment to diversity and inclusion when making their final decision.
This data is consistent across both white and non-white consumer groups, revealing that prioritizing diversity and inclusion can have equal benefits no matter the demographics of your target audience.
But here’s the catch: Your commitment needs to be authentic.
A 2019 study by The Female Quotient, in partnership with Google and Ipsos, concluded that “people can sense when a brand is merely saying what it needs to say versus truly walking the walk.”
They explain that brands need to consistently reinforce their values from inside their organization to the way they market their products if they want to embody a true commitment to diversity and inclusion.
Burdis understands the difference between saying the right thing and doing the right thing. “I consider actual diversity rather than promoted representation when selecting brands and products,” she said.
“I consider actual diversity rather than promoted representation when selecting brands and products.”
So does Kinzy. The content specialist explains that consumers want to know that brands care about their lives.
“You can tell brands care through their commitment to representation,” Kinzy said. “My decision to purchase is heavily affected by a brand’s consciousness of its contribution to media representation.”
We know that people want to see themselves and their values reflected in the brands they support. And, our data shows that consumers value a commitment to diversity and inclusion. Therefore, companies can strengthen their connection with their market through authentic representation of diversity in their marketing strategies.
Diverse Marketing Campaigns Increase Revenue
According to 2019 data from Marketing Dive, brands with the highest level of diverse representation in their ads saw an average stock gain of 44% across seven quarters. Additionally, the most diverse brands were preferred by 83% of consumers.
Our new data makes clear the monetary benefits of diverse marketing campaigns: Nearly two-thirds of consumers (64%) are at least somewhat likely to make an immediate purchase after seeing an ad they consider to be diverse.
Consumers are more likely to buy a product if they can see themselves using it, and your campaign should help them make that connection.
The likelihood of purchase is nearly equal for both white (70%) and non-white (71%) consumers, demonstrating the value of diversifying your campaigns.
There is, however, a slight difference in how likely people are to purchase from one age group to the next.
- 73% of people ages 18–34 are at least somewhat likely to make an immediate purchase
- 65% of people ages 35–54 are at least somewhat likely to make an immediate purchase
- 61% of people over age 55 are at least somewhat likely to make an immediate purchase
While there is more to gain targeting younger consumers, it’s still clear that diverse and inclusive marketing campaigns make a good first impression on consumers.
Kinzy supports this idea, but adds another benefit for organizations: Building trust.
“A successful campaign can blend relevance with inclusion into a cohesive selling proposition that established trust between a brand and their potential customers,” Kinzy said.
If you are trying to trigger an immediate action from consumers, surface-level representation is not enough to demonstrate your brand’s true commitment to diversity and inclusion.
“Adding diverse models in a white-centric scenario does not solve the issue of diversity and inclusion,” said Yaniv Masjedi, chief marketing officer of Nextiva, a communications company. “The ad must also speak to the hearts and experiences of non-white audiences.”
“Adding diverse models in a white-centric scenario does not solve the issue of diversity and inclusion.”
Companies that prioritize diversity in their marketing strategy —beyond surface-level representation — are not only able to create strong connections with their target audience, but also expand into new markets by triggering immediate action from consumers.
Commitment to Diversity Promotes and Encourages Brand Loyalty
If people see themselves and their values represented in social media and TV marketing campaigns, they are more likely to trust and respect that brand.
In fact, just over two-thirds (67%) of consumers are at least somewhat likely to make a second purchase from a brand they believe is committed to diversity and inclusion.
How likely people are to make a second purchase is consistent for both white consumers (71%) and non-white consumers (70%).
Companies have the opportunity to increase brand loyalty across all racial demographics by ensuring their advertisements and marketing campaigns are both diverse and inclusive.
If a brand fails to illustrate their support and respect for minority groups, it could be a deal breaker for some consumers. It definitely is for Pinkham.
"I’ve seen one health and wellness website where 90% of the models were white,” Pinkham said. “To be honest, I researched a different brand that did include that diversity.”
Ngome has been looking for diversity and inclusion in commercials, magazines, events, websites, and apps since before it was a trend.
“Most of the brands I use have been practicing diversity and inclusion prior to 2020,” Ngome said. “Some examples are Chase, Toyota, T-Mobile, and AT&T.”
Kinzy shares the same sentiments: She likes brands that put representation and inclusion at the forefront.
“I look for brands that put their money where their mouth is and bring their values front and center to show their customers the importance of what they believe,” Kinzy said, noting that if she disagreed with a brand’s stance on a social issue she would pursue their competitors to find another option aligned with her beliefs.
“I look for brands that put their money where their mouth is.”
These accounts make it clear that it’s in companies’ best interest to build trusting and respectful relationships with their customers because they establish a sense of loyalty that many brands are working to achieve.
Diverse Marketing Strengthens Your Brand
Frequent and accurate representation of all races in your social media advertisements and marketing campaigns helps build stronger relationships with your target audience.
Because people want to see themselves and their values reflected in the brands they support, it is important to prioritize authentic representations of diversity in marketing strategies.
Beyond a stronger brand identity, companies with a clear commitment to diversity and inclusion in ad campaigns are able to expand into new markets and increase revenue by triggering immediate action from consumers.
Finally, diverse and inclusive marketing campaigns establish trust and respect between brands and their customers, increasing brand loyalty.
There are endless benefits for companies that can authentically embody a commitment to diversity and inclusion in their advertising and marketing strategies.
About The Survey
Top Design Firms surveyed 501 people across the U.S. about their views on diversity and inclusion in advertising and marketing in October 2020. Less than half of respondents (43%) identified as male, 38% identified as female, and 19% did not identify. Half of respondents (50%) identified as white or caucasian, 17% identified as non-white, and 33% did not identify their race. Twenty-one percent (21%) of respondents are ages 18–34, 31% are ages 35–54, and 29% are age 55 and above; 20% did not share their age. Most respondents live in the South (35%), 29% live in the Midwest, 24% live in the West, and 12% live in the Northeast.