‘We can’t cry about the milk that’s spilled’: As DE&I fallout continues, multicultural agencies grapple with changes

Notably, consumer spending has slowed and marketing budgets are facing constraints as economic uncertainty looms, making it easier for brands to make the case to divest from diversity efforts. Meaning, walking back the commitment is more a result of the need to tighten belts rather than a push to upend diversity initiatives, industry experts say.

That reversal has left multicultural and diverse-owned agencies dealing with the about-face from the boom seen at the height of the Black Lives Matter movement and subsequent DE&I commitments.

“It has definitely affected us,” said Dawn Wade, managing partner and chief strategy officer at NIMBUS, a Black-owned marketing agency. “We have many customers or clients who their DEI budgets were just completely cut.” In some instances, Wade added, diversity initiatives were axed, shifting dollars toward general marketing initiatives. It’s a stark comparison to 2020, when “phones were ringing off the hook,” she said, noting the agency had to turn work down to avoid onboarding too many clients at once, thus overloading the business. The agency has maintained around 20 clients since 2020.

Recently, the agency lost a client whose diversity budget was completely slashed, she said. Meanwhile, some other clients have been in limbo, trying to find workarounds in light of DE&I budget cuts. (Wade did not offer the names of specific clients or budget figures.) 

Other multicultural marketers tell a similar story, noting the pendulum of brands’ commitment to diversity now swinging toward divestment out of fear of the so-called culture wars. At BGD Media, a multicultural and independently-owned marketing agency, potential clients have recently put conversations around working together on hold until 2025, said Latoya Bond, CMO of BGD Media. 

The biggest impact has been in the amount of money clients are willing to put into multicultural marketing campaigns and creative geared toward diverse audiences, she added. “It’s not a complete back out,” Bond said. “It’s that they now don’t have the pressure of saying, ‘You have to spend X amount of your digital marketing spend on this particular market. You have to give X amount to agencies of color.'” (Bond did not provide specific budget spend figures.) Notably, consumers were more outspoken about shopping with brands that aligned with their values, pressing brands to take a stance on societal issues at the height of the social justice movement.

Last year, the Alliance for Inclusive and Multicultural Marketing (AIMM) published research that revealed consumers want brands to commit to diversity and inclusion practices. Per AIMM’s report, 77% of consumers would stop shopping with a brand that backtracked on its support for social causes.

Pausing, or putting work on hold, seems to be a common theme, according to Krishana Davis, evp of digital and multicultural engagement at Precision, an integrated strategy and marketing agency. Davis said clients have divested from earned media communications around any inclusive marketing plans. However, those same clients have continued to invest marketing dollars in other parts of the business, she added. Meaning, the work and spend continues, but without the amplification of earned media. 

Momentum in favor of diversity initiatives seems to be waning now, especially in light of the backlash brands like Bud Light, Miller Lite and Adidas faced last year for inclusivity-themed campaigns, partnerships or imagery. Others like John Deere, Lowe’s and Harley Davidson have backed down following boycotts against so-called woke marketing efforts from a right wing activist investor Robby Starbuck. 

“It seems like we’ve replicated the ‘don’t ask, don’t tell’ policy when it comes to DEIB (diversity, equity, inclusion and belonging) in the advertising and marketing industry,” Lisette Arsuaga, co-founder of AIMM said in an email to Digiday. Arsuaga echoed Davis’ sentiments, noting that while some companies are still moving forward with their diversity efforts, “they just don’t want to talk about it – or they’ve simply call the efforts something else.” 

That could mean an overhaul of the DEI playbook that was originally written back when the Black Lives Matter movement reverberated through the ad industry. According to DEI practitioners like Ezinne Okoro, chief client and cultural strategy officer at VML ad agency, clients increasingly request that diversity and multicultural efforts be folded into the RFP process, making diversity part of general marketing plans instead of stand-alone, separate campaigns labeled as a diversity effort.

“Brands are now seeking agencies that can seamlessly integrate these strategies into the overall audience targeting, storytelling process, and creative execution,” Okoro wrote in an email to Digiday.

Some clients continue to push agencies on the diversity front, inquiring about policies, practices and team staffing demographics, she added. On the other hand, to Okoro’s point, agencies like FCB Chicago are folding those offerings into presentations without being asked, according to Marc Wilson, evp and executive director of strategic inclusion at FCB Chicago. Over the past year, the term DE&I has become a point of polarization that some brands are hesitant to build and amplify strategies around, he added.

“[It’s] just understanding that with certain clients, it needs to be packaged in a way that’s digestible and not going to stoke any fear that they have,” he said. 

Cathy Chan Butler, evp of talent, equity and learning solutions at the 4A’s also said as much.

“It’s not about not doing or not investing in DE&I. It’s about reframing it in a way that helps … folks who are part of the conversation understand in a way that’s beneficial to them.” Meaning, that as opposed to diversity and inclusion efforts being pledged front and center as they were on the heels of George Floyd’s murder, agencies are working with brands to shift the narrative, focusing on data and storytelling around diversity as an integrated part of the marketing strategy and not a standalone product.

Still, she added, DEI practitioners are hopeful that marketers will continue to lean into diversity and inclusion efforts with the understanding that marketing to everyone is good for business. 

LaToya Shambo, CEO BGD Media, who works alongside BGD Media’s Bond, concludes it like this: “We can’t cry about the milk that’s spilled. It’s just: How do we clean it up or go get a new box of milk?”