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Why diversity in ads is more important than ever for revenue

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“It was an oversight.”

“We will do better.”

“Help us learn.”

These are all responses we’ve heard from brands who have been called out for a lack of diversity in their marketing. Consumers are screaming their demands for inclusion, yet we continue to hear about brands whose advertisements exclude minority groups, add to racial tension, or offend specific communities.

In recent years, diversity was a suggestion that many brands continued to ignore and get by with no repercussions. But today, inclusion is a down-right must-have for all businesses. In fact, many consumers are boycotting brands all together if they don’t see themselves represented in advertisements. 

An Adobe survey found that 62% of respondents said that a brand’s diversity, or lack of it, impacts their perception of their products or services. Furthermore, 58% of LGBTQ+ respondents, 53% of African-American, and 40% of Hispanic respondents have walked away from a brand for not representing them in its advertising.

Take Revolve, the online fashion brand  for example. The company has been continuously called out for neglecting women of color and plus-sized women in it’s fashion campaigns. In response, consumers have littered the internet with the hashtag #REVOLVESoWhite in an effort to hold the brand responsible and spread awareness for their business practices. 

In order to avoid becoming the next #fail, you need to understand why diversity in advertisements matters more now than ever.

What is diversity?

Although 2020 has been a time of heightened awareness for racial injustice, diversity is not limited to race. Diversity mandates the inclusion of people of all races, ages, sizes, genders, sexual orientations, social classes, religions, and other differences. 

In order to avoid offending someone in your audience, ask yourself: Are your ads — deliberately or unintentionally — showcasing one type of consumer? Are all of your target markets represented in the images you are using? What processes are in place to ensure that your ads aren’t insensitive or otherwise offensive? 
Sephora is a brand that has consistently broken barriers by running campaigns that are drastically different from other advertisements in the beauty industry, which typically feature professional models with “conventional beauty.” In order to celebrate diversity, the beauty powerhouse featured 10 employees of varying backgrounds in order to demonstrate, according to InStyle, “a shift in focus on embracing individuality rather than selling... [This campaign] falls in line with the number of brands who have made strides recently to be more inclusive with both their product offerings and campaign imagery.”

Fortunately, Sephora isn’t alone. More and more companies are taking a stand for diversity and inclusion. In a 2018 Newscred survey of U.S. marketers:

  • 88% agreed with the statement: “Using more diverse images helps a brand’s reputation”
  • 41% agreed that it is important to represent modern-day society in marketing imagery
  • 33.9% said they’ve used images of more “racially diverse models” in the past 12 months
  • 21.4% said they used more images featuring “nonprofessional models” in the last 12 months
  • 8.6% said they used more images during the past 12 months featuring  “nontraditional families,” while 10.6 percent used more images featuring same-sex couples 
  • 10.2% used more images featuring people with disabilities

But even still, more than 91% of U.S. marketers agree with the statement “there is still room for growth in using more diverse images by marketers.”

Why representation matters in advertisements

Besides the fact that being inclusive is just the moral thing to do, from a business perspective, celebrating diversity in advertisements has the potential to generate tangible returns.

Diversity increases revenue

Embracing a diverse mindset can be good for business. A Google study found that 64% of those surveyed said they took some sort of action, including purchase after seeing an ad that they considered to be diverse or inclusive.

Take Fenty Beauty, a cosmetics brand founded by Rihanna and owned by Kendo, a division of LMVH, that bills itself as “the new generation of beauty”. The brand took the makeup world by storm at its 2017 launch by revealing a collection of 40 shades of foundation for people of all complexions. At this time, a collection this extensive, especially for a new brand, had not been done.

In the first month of sales, the brand saw $72 million in earned media value, and more than  132 million views on YouTube. People of very light complexions, like those with albinism, as well as those with very deep skin tones do not have access to appropriately colored products in most other brands of makeup, and therefore turned to Fenty for their cosmetic needs, propelling Fenty Beauty foundation to become a Sephora best-seller, even to this day. 

On the other hand, Kat Von D Beauty, another Kendo-owned brand was forced to rebrand to KVD Vegan Beauty after Kat Von D faced accusations of anti-Semitism and spread anti-vaccination misinfromation. Despite the severance from Kat Von D herself, the brand still saw a sales decline of over 28% between 2018 and 2019, showing that consumers speak with their wallets.

Diverse marketings have huge spending power

Don’t overlook the spending power of minority groups in America. African Americans are projected to spend $1.8 trillion on goods and services by 2024 and the buying power of the LGBTQ+ community worldwide reached $3.7 trillion in 2019. 

Not only do minority groups have huge spending power, but these tightly knit communities’ have a huge impact on pop culture and mainstream media. A 2016 report by Nielson said that African-American millennials are 25% more likely than all millennials to say they are among the first of their friends/colleagues to try new products, echoing the fact  that minorities are pivotal in creating trends and ultimately influencing purchase decisions.

After discovering that African-American women spend 9x more on beauty and grooming products than white women, luxury haircare brand Ovation Hair decided to test this niche market, which was different from the profile of the influencers they were accustomed to using. The brand’s partnerships with racially diverse beauty gurus exceeded their performance expectations, driving more than 18,000 visits to the Ovation Hair website and making these women “the best-performing influencers that Ovation has ever worked with,” according to their social media manager.

Inclusivity helps protect your brand’s reputation

Everyone wants to see people like them represented in advertisements of brands that they love, yet this is not always the case. 

In the age of social media, everyone is given a voice and consumers are not afraid to use theirs for change. For example, days after the murder of George Floyd, Uoma Beauty founder called out brands with hashtag #pullupforchange urging them to reveal the number of minority people they employ on a corporate level in order to raise attention to the role large corporations play in contributing to white supremacy. 

The challenge gave brands 72 hours to #pulluporshutup, and asked consumers to boycott the challenged brand until their number were released. Hundreds of brands including Revlon, Ulta, and Glossier accepted the challenge.  Despite some company’s low representation of minority groups, Instagram comments show that consumers appreciate the transparency, but will continue to hold brand accountable as they address the changes that need to be made internally.  

Your community is the key to unlocking diversity

A survey of 278 senior-level marketing and media executives in the US found that marketers increased their spending on Hispanics (29.5%), LGBTQ consumers (24.2%) and African Americans (23.1%). Even if brands want to be more inclusive in their advertisements, the exorbitant amount of time and resources it takes to create content in-house makes it difficult to create enough imagery that will resonate with each of their target audiences, especially during a time when many brands are facing extreme budget cuts.

So how can you diversify your ads without increasing your marketing budget?Smart marketers have begun sourcing diverse content from their communities of influences, content creators, customers, and even employees and then repurposing the images on their own marketing channels. Community-generated content, a proactive form of user-generated content, is inexpensive, scalable, and most importantly, it comes from different people around the world.

Community content is authentic

Who better to create diverse content than diverse people? We realize that not every company is in a position to hire a more diverse team at the moment. While this is a long term goal, it’s important to realize that you can’t fake diversity in the meantime. Throwing up a picture of a person of color, or your support for social equality just isn't enough, and can come off as tone-deaf if there’s no one in-house to create messaging that speaks to the people that you’re trying to target. 

In fact, an Adobe research report showed that 66% of African-Americans, and 53% of Latino and Hispanic Americans feel their ethnicity is portrayed stereotypically in advertisements. If your brand is genuinely interested in celebrating diversity and reaching a diverse audience, working with real people from different walks of life is a great way to do so.

Community content is scalable

Unlike studio shot content, community-generated content does not require much time and energy to create, making it easy and economical to source large amounts of it. Traditional content creation processes can’t keep up with consumers’ demand for fresh, diverse content. Professional photo shoots are time-consuming and expensive, and often smaller brands do not have access to a diverse group of professional models especially in times of social distancing and budget cuts.  

Your community already has a built-in audience

By partnering with community members of varied ages, ethnic backgrounds, body sizes, and life states, you can spark directly to different parts of your clientele. People are often followed by others with similar backgrounds to their own. Your community members have followers of their own who consciously or not, look to them specifically for recommendations on products and services. If someone speaks highly of your brand or product, similar-minded people are likely to follow. 

Need help diversifying your advertisements? Contact us today.

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