Marketing, diversity and inclusion: Just add accountability.
Diversity and inclusion goals command the attention of marketers in the U.S. and around the globe. Talk of such ambitions dominated the 2022 ANA AFM but marketers also want to secure more accountability and transparency.
Diversity and inclusion goals command the attention of marketers in the U.S. and around the globe. Talk of such ambitions dominated the 2022 ANA AFM. As marketers deliver on corporate goals, they also want to secure more accountability and transparency.
D&I efforts and similar goals have been around in the corporate world since the early 2000s or earlier. But it wasn’t until 2020 that the topic rose to the top of the agenda. To make progress, most corporations are investing heavily in diversity roles, and the office of diversity is becoming a key player with the c-suite.
Organizations are tasking D&I teams with delivering real change to their organizations and brands. Their mission carries significant weight. Consumers expect their favorite brands to uphold and reflect their values. Meanwhile, research shows that driving diversity externally through suppliers and internally through talent creates superior results for brands.
As brands like Target, PepsiCo and Kellogg discussed their D&I efforts at ANA AFM this year, it became clear that they number among the leaders driving change. We believe many companies will follow suit and require more accountability from their agencies as part of their contractual obligations. As other speakers took the stage, diversity took its place as the headlining theme of the event, and with it, the message that organizations hold a firm expectation for transparency in matters of D&I and beyond.
The Right Talent For The Right Job
Contractual audits allow marketers to monitor key roles and talent to ensure that the brands have the right people in place to deliver on the scope of work and drive success. In a recent audit, FirmDecisions uncovered that key roles delivered only 68% of their allocated time to a high-importance account. We also uncovered that the director-level roles had overspent time to make up for the key talent. This finding enabled the agency to rebalance the account team to ensure that the brightest minds focused on the most important account to deliver better brand value.
At the end of the day, it is imperative for brands to ensure that key talent — think chief investment officers and heads of strategy — spend time to develop strategies and deliver the best possible media buys for the client. Marketers need to ensure that these valuable resources dedicate the agreed time on the client account.
As marketers consider their people investments, it’s crucial to factor in the greater employment landscape. We heard the connection between talent and brand success affirmed again and again throughout the conference. Marketers must pay attention, then, to the high turnover rates and monitor the impact on both quality and cost. Marketers estimate that 30% of the budget is “lost” due to inefficiencies on the agency side, whether they stem from talent, training or elsewhere.
We’ve observed, for example, a 20% to 30% increase in salaries for replacement talent. This will without a doubt translate to higher fees for marketers. On top of that, new talent will need training on brand values and goals before they can contribute to the agency brand team.
Open roles can generate as much cost to the marketers as ones filled by more expensive hires. During our audits, we’ve reviewed open roles to find that, due to the Great Resignation, many roles remained open for several months. Best-in-class marketers have contractual terms in place that allow them to be made aware of open positions; in most cases those roles will be deducted from the fee plan until they are filled. A contractual audit highlights open roles and prompts a productive conversation that solves for the positions.
3 More Areas For Accountability
Outside of diversity and talent efforts, marketers can establish transparency in three other areas to ensure fairness and success. A contractual audit will feature these areas and provide insight to the marketer and create collaborative discussion with its agencies.
#1: OVERHEAD For marketers who have transparency into agency overhead, it is imperative to re-evaluate the costs included in overhead calculations. Many agencies have changed their model to fit the “new normal.” As such, marketers should review rates to ensure they’re paying fair overhead.
#2: RATE CARD For marketers who use any type of rate card, they should audit and update them to fit the new normal, taking into consideration not only the new overhead calculations but also new talent. While we’ve observed increased talent cost, we’ve also seen the need for different talent — digital talent, data, analytics, reporting and strategic resources — who were not included in pre-pandemic fees and rate cards.
#3: STRATEGIC PARTNERS Many marketers are also reviewing their strategic partners. While some go with a holding company model with all services under one roof, several clients manage this within the marketing or the procurement department. By performing a contractual audit with their various partners — such as media, creative, social, digital, PR and influencer agencies — marketers will gain a holistic view of your key partners. Such a vantage point will identify who is capable of growing with the brand and who should be working toward improvements in areas such as talent, scope management, financial management and, even more generally, delivering on their contractual obligations.
Just Good Business
All in all, marketers should feel empowered to validate that their marketing partners are meeting their contractual obligations. It’s just good business. As a matter of fact, marketers that audit annually see much longer and healthier agency relationships. It helps drive discussion, collaboration and helps deliver improved efficiencies and effectiveness for the brand.