It’s relatively easy to know if you have a diverse workforce – you just need to look.
Supporting diversity across your entire media supply chain is trickier. Procurement teams often evaluate vendors based on pricing or value, and rely on recommendations from colleagues and industry peers – making it difficult for diverse-owned companies to get into the mix.
Purchasing and procurement aren’t usually a part of the diversity conversation, and while companies might focus on diverse hiring practices internally, they often don’t give as much attention to the businesses in their supply chain, said Doug Melville, chief diversity officer at Omnicom agency TBWA North America.
“In our industry, the conversation around diversity typically leans first into workforce,” he said. “The [supply chain] doesn’t get the window and opportunity it should.”
Some companies, however, are trying to fix the diversity disparity in their supply chains by setting clear goals, reporting publicly and regularly on their progress and making organizational changes to hold themselves accountable.
Seeking diverse suppliers
In 2009, Nielsen launched a program to actively grow spend with certified diverse-owned businesses, with the goal of putting 10% of its annual purchasing budget toward diverse service providers in the technology, market research and professional services spaces.
“Everything from data centers to paperclips has a diverse supplier touching that process,” said Jocelyn Azada, manager of supplier diversity and sustainability at Nielsen.
Nielsen seeks out companies that have been certified as diverse or minority owned by organizations such as the National Minority Supplier Development Council and the Women’s Business Enterprise Network Council. The company considers businesses that are at least 51% controlled by a minority, woman, LGBTQ+, disabled or veteran owner as diverse.
“The certification helps us identify suppliers that are working with other large enterprises,” Azada said.
But not all businesses have the means or desire to get certified as diverse or minority-owned, and those that do are often grouped separately by minority affiliation. So the agency TBWA launched a search engine called One Sandbox that aggregates businesses owned by different minority groups.
“The way it’s set up, you have multicultural-owned businesses, women-owned businesses, Asian-owned businesses, the Hispanic Chamber of Commerce,” Melville said. “Each diverse group of businesses operates independently.”
Bringing these groups together allows buyers to focus less on their ownership and more on the quality of their work, Melville said.
Today, the platform lists 471 companies across production, casting, editorial, visual effects, distribution, and set design, with whom TBWA aims to spend at least 10% of its budget annually.
“The hardest part is, people don’t know these companies,” Melville said. “When you know better, you do better.”
Ad tech firm PubMatic takes a data-driven approach to supplier diversity, requiring vendors to fill out a survey with information such as their percentage of diverse employees (either from a gender or ethnicity perspective), the diversity initiatives the company has in place, and how the suppliers they work with approach diversity. PubMatic scores vendors against social metrics and weighs that against pricing and ability to meet objectives.
“We have to put the diversity component into context as part of our overall evaluation,” said PubMatic CEO Rajeev Goel. “If not, it won’t be sustainable. We would use them once and not come back.”
Making it sustainable
Reporting data publicly helps keep companies honest and committed to supplier diversity goals.
Nielsen’s procurement team tracks diverse supplier spend weekly and verifies the numbers with an outside advisory council. The company also publishes those numbers in its annual global responsibility report, and Azada publishes a stand-alone report on supplier diversity on Nielsen’s website every year. Her team also keeps a regularly updated scorecard of how suppliers are performing on an ongoing basis.
By holding itself accountable in this way, Nielsen was able to drive 9% of its budget, or $111 million, toward diverse-owned businesses last year.
“The transparency really motivates us,” Azada said. “We want to show we can follow through on our commitment.”
PubMatic sets ongoing targets for spend against diverse-owned businesses and reports numbers publicly on an annual basis. The company plans to raise its goals annually based on the previous year’s numbers.
“That forces us to answer questions to internal and external stakeholders,” Goel said.
TBWA spent $260 million with diverse suppliers in 2019, up from essentially zero the prior year, Melville said. Because of this success, the agency will launch an open source version of One Sandbox later this summer so other agencies can benefit from the platform.
But visibility and reporting aren’t always enough. In 2018, Nielsen moved its supplier diversity efforts under its procurement department and tied supplier diversity goals to executive compensation. Azada’s team started reporting directly to the chief procurement officer, which allowed her to meet regularly with sourcing managers to stay up to speed on purchasing needs.
“A lot of purchasing happens fast and ad hoc, so that proximity is really critical,” she said.
Road blocks
Ensuring supplier diversity is a manual effort, because there aren’t any tools or technologies dedicated to the cause. Major corporations are unlikely to solve this problem themselves without help.
“When we get really excitable and want to change, we don’t have the tools to do it,” said Belinda Smith, diversity ambassador with the World Federation of Advertisers. “Then when we try to bootstrap it, it’s not sustainable, and eventually you have to let go of the initiative.”
Automation will help make supplier diversity more sustainable, and PubMatic’s Goel expects vendors that solve this problem to start cropping up in the industry, just as they did for issues such as fraud and brand safety.
Otherwise, companies will have to make the effort to do manual spot checks and reporting to sustain their goals long term.
“It will be hard to do an intensive analysis of each vendor,” Goel said.
Recent Comments