There's been a great deal of recent attention on supplier diversity in the advertising supply chain. Marketers and agencies want to do the right thing and support diverse suppliers -- Black, Hispanic, Asian, LGBTQ and more. Diverse suppliers in the advertising/marketing industry are in categories including agencies, media companies, production companies and research suppliers. Given that the biggest marketing expense for most organizations is media, there has been a particular emphasis on supporting diverse media suppliers.
There are multiple benefits in supporting diverse suppliers overall and diverse media suppliers in particular. They include:
- More authentic connections, as diverse suppliers reflect the consumer base.
- New channels and diverse perspectives for ideas, goods and services.
- Access to a broader audience to improve brand awareness and attract new customers.
- Greater customer loyalty.
- Positive economic impact for the community in which suppliers are located.
- Representing a force against racial inequality and inequity, and the elimination of systemic investment inequalities in the media and creative supply chain.
But we've heard complaints along the way. Diverse media suppliers say that many potential buyers are evaluating them on traditional metrics like CPM and reach -- where diverse media companies just can't shine. Rather, messaging environment, connection with the community and cultural connection may be more important. Diverse media suppliers also say they are getting an increasing number of requests, and that some RFIs/RFPs require hours of work to answer. This is challenging for the suppliers because they often have smaller staffs and even part-time sales staffs. As a result, buyers should find opportunities to streamline RFIs/RFPs.
Meanwhile, there have also been complaints from the buyers -- marketers and agencies. They say the diverse suppliers often don't know how to get the conversation started, don't always understand the role of client-side procurement, and may not fully understand the benefits of certification. There's been more basic feedback that some diverse suppliers need to do a better job on their prep work and ensure that they are clear on evaluation criteria.
For the past six months ANA has been working in partnership with the 4A's (American Association of Advertising Agencies) and AIMM (Alliance for Inclusive and Multicultural Media) to develop guidelines to help buyers and diverse media suppliers improve their ways of working together. That collaboration has been fantastic. But better yet, we have engaged the diverse suppliers to provide input and contribute to the development of the guidelines. By my rough estimate, some 50 diverse suppliers have participated in our Zoom meeting discussions or weighed in via email. That has helped take the guidelines to a new and better level and we are most appreciative!
There are two sets of guidelines:
There are 16 guidelines for diverse media suppliers. They include:
- Register Your Business on Marketer Supplier Portals. Most marketers have their own portals that serve as a database for diverse suppliers, and suppliers should register their businesses on these portals. The portals should be just one step in building a relationship with the marketer, and diverse suppliers are encouraged to stay in regular contact (e.g., quarterly) with the marketer and/or its agency.
- Consider Certification. Diverse-owned media suppliers which are not certified should consider getting their certification from the relevant organization(s). There are multiple benefits of obtaining certification. For example, certified businesses are included in more RFPs, which provides additional exposure to corporate marketing departments, which leads to increased sales. Certification therefore maximizes the opportunity for suppliers to be considered and hired.
- Be Clear on Evaluation Criteria. Make sure RFIs are clear about the evaluation criteria suppliers will be measured against to be sure buyers are setting realistic goals. Diverse media suppliers should seek to understand how success will be measured to deliver against campaign goals and/or level-set expectations on gaps in measurement that should be highlighted from the outset.
- The Value of Case Studies. Diverse media suppliers are encouraged to curate case studies displaying work they have done with national advertisers. Buyers appreciate learning via case studies.
There are 20 guidelines for buyers. They include:
- Accept Alternative Media Metrics. Standard metrics such as CPM, reach and traditional third-party measurement may need to be substituted with other metrics when evaluating diverse media suppliers. Diverse media is likely to have higher CPMs and less scale, given they often have more targeted audiences, but such factors should not preclude inclusion. Engagement metrics that measure messaging environment, connection with the community and cultural connection may be more important.
- Payment Terms. Marketers and agencies should avoid extended payment terms for diverse media suppliers unless there are unique circumstances for doing so. Extended payment terms can cause severe financial hardship for diverse media suppliers who do not have the cash flow or cash on hand to weather extended payment terms.
- Certification Requirements. Certification authenticates, via a third-party vetting process, that a supplier meets the criteria as a "diverse supplier." It removes the burden to confirm legitimacy from the buyer and is instead handled by the certification organization. The report lists five major certification organizations.
- Hike Investment to Increase Inventory. Inventory is limited in the diverse media marketplace; there simply are not enough eyeballs and impressions to satisfy demand. When marketers increase media investments, it allows suppliers to create additional content and therefore increase inventory.
What terrific collaboration! Thank you 4A's, AIMM and the many diverse suppliers.
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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.