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17,000 data points from 50 top brands prove that diversity in ads is good for their bottom lines

A new study from Deloitte agency Heat found that representation in ads correlated with an increase in both stock price and public perception.

17,000 data points from 50 top brands prove that diversity in ads is good for their bottom lines
[Photo: Oleksandr Pidvalnyi/Pexels]

It should go without saying that working to ensure advertising is inclusive, diverse, and representative is just the right thing for brands to do.

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While there have been improvements over the past decade, though, too often inclusion is treated as a box to tick.

Woman? Check.

POC? Check.

Still, the work fails to illustrate these people as three-dimensional human beings.

Now, a new study from Deloitte-owned agency Heat has found that brands that have figured out how to do just that are seeing a boost to both public perception and their stock price. “We embarked on this to try to prove that diversity in advertising is actually good for business,” says Heat’s head of strategy Maggie Gross, adding that the goal was to connect the desire among many companies to create more diverse advertising with the pressure of business results.

The “Heat Test” study looked at ads for 50 brands from the Top 200 media spenders, across eight industries. Ultimately this encompassed more than 17,000 data points. The agency then consulted with Duke University anthropology professor Dr. William O’Barr and UT Austin advertising professor Dr. Kevin Thomas on what diversity in advertising should look like. They identified key metrics, such as showcasing diversity in primary roles (speaking roles versus background), illustrating diverse characters in positions of power (buying a burger versus selling the burger), and contrasting stereotypical roles (woman cooking versus woman pursuing a career).

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They found that 94% of the brands in the study had at least one occurrence of women in a primary role, 57% of which were in positions of power, but even half of those roles still featured a stereotypical element like empathetic mom, devoted wife, or boy-focused girl. Also, 92% of the brands studied had at least one occurrence of a person of color in a primary role, but only 15% of those were culturally diverse.

Where things really fell off was in representation of both the LGBTQ+ community and in depicting individuals with a disability. Less than 1% of ads represented a character who would identify as LGBTQ+. Despite one in four American adults living with some type of disability, again, less than 1% of the ads featured a character with one.

The research also found that 90% of ads didn’t include people of lower socioeconomic backgrounds.

Some of these findings mirror those in a University of Southern California study earlier this month on diversity and representation in films, which found that among the top 100 highest-grossing films of 2018, less than 2% of onscreen characters had a disability, and LGBTQ characters made up only 1.3% of speaking roles.

Heat’s researchers looked at the stock growth of each brand over the past seven quarters, as well as Brand Index scores to get a sense of how the corresponding ads impacted public perception as well as the bottom line. Turns out, brands that scored highest in the study averaged a 44% stock increase over the past two years and were 83% more likely to see a boost in their Brand Index scores than lower scoring brands.

Gross says they’re not calling out specific brands, but the message to brand marketers and ad agency creatives here is to reflect on what they could do differently, from adjusting the way that creative teams are briefed to how they write scripts and put together casting recommendations so that they can track and measure the process.

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“It’s less about checking a box and making sure, frankly, you have a woman or a person of color in your ad,” says Gross. “It’s about recognizing that diverse people are complex, relatable human beings. It’s no longer a question of if you should do this but if you can afford not to.”

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About the author

Jeff Beer is a staff editor at Fast Company, covering advertising, marketing, and brand creativity. He lives in Toronto.

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