There is another reason for women- and minority-owned radio stations to be optimistic they will get a greater share of national advertising dollars in the coming years. A just-released survey of marketers by the Association of National Advertisers finds that although only half (49%) currently turn to diverse suppliers for media buys, 43% of those polled expect they will spend more with diverse media companies in the coming year.
“For many companies, media is their most significant marketing/advertising investment. Yet finding diverse media suppliers has been a particular challenge,” the ANA says in its new study, “The Growth of Supplier Diversity.”
That may be a head-scratching statement to many Black, Hispanic and women-owned radio stations, but for national brands the sore spot is a lack of scale available. One ANA member said they have made strides but they “still have significant challenges” to meet the scale needs of a national brand. Another noted a lot of companies are publicly-held, and when it engages with radio stations that fit the criteria it is unable to secure the reach they are after.
Yet even with those perceived challenges, 15% of the ANA members surveyed said they spend the most with diverse-owned media outlets as part of their efforts to spend more with nontraditional suppliers. But that is less than a third of the 50% who said ad agencies owned by women and minorities get the biggest share of their dollars earmarked for diversity initiatives.
The ANA survey found that the importance of supplier diversity for marketing and advertising has increased during the past year for 89% of respondents, including 58% for whom the importance increased significantly, while 11% said there was no change at their company.
Marketers credit the focus on racial justice during the past year for the increased focus. They also said supplier diversity has growing importance in their company’s overall diversity and inclusion strategy.
“The devastating events of the past year have had a profound effect on all businesses, and the marketing industry has been no exception,” said ANA Chief Executive Bob Liodice. “But this report shows that at least one positive development has emerged—a growing number of marketers are realizing the importance and the value of diversifying their supplier base.”
The survey revealed companies spend the most on women-owned businesses, followed by Hispanic-owned, small businesses, and those that are Black-owned. Respondents also said they expect to spend more in the next year. At the top of the list were Black-, women-, and Hispanic-owned companies.
To reach a broader range of media suppliers, the ANA recommends national advertisers expand their criteria when sourcing suppliers, including to media companies that are diverse-operated but not diverse-owned and to those that target diverse segments but are not diverse-owned or operated.
“There is clearly the need for the further development of diverse-owned media,” the ANA study says. “Industry participants — including trade associations, marketers, and agencies — should use their resources to promote such development.”
It also says marketers need to be open to doing business differently when working with some diverse suppliers. That could mean adding new people to their teams, investing more time in supplier relationships, relaxing payment terms, and looking beyond conventional metrics. “Marketers are encouraged to think beyond scale (and reach) for their supplier diversity programs and instead consider the importance of audience engagement and relevance,” it says.
Download a copy of The Growth of Supplier Diversity study HERE.