How brands are missing out on revenue by not engaging effectively with diverse communities

by | Feb 22, 2023 | Public Relations

At a time of economic uncertainty, brands are missing out on significant revenue and market share growth opportunities—and jeopardizing future growth—due to a lack of appropriate and purposeful focus on Black, Hispanic, Asian and LGBTQIA+ communities, new research from advertising and marketing tech platform Direct Digital Holdings reveals.

The firm’s new report, Dollars & DEI: Multicultural Consumers’ Insights on Brands’ Media Buying and Marketing Practices, based on exclusive research conducted by Horowitz Research, spotlights the perspectives of diverse and multicultural consumers—a group that comprises two-fifths of the American consumer market, yet has not had proportionate attention from marketers and communicators.

“Given this compelling data for a growing U.S. economic market segment, there should be no more reason for brands to move slowly in diversifying their media allocations,” said Mark D. Walker, CEO and co-founder of Direct Digital Holdings and writer of the report’s introduction, in a news release. “If we put aside all the rhetoric and platitudes, this is an industry that has always been and should still be about reaching customers and driving revenue.”

How brands are missing out on revenue by not engaging effectively with diverse communities

The research tapped U.S. adults 18+ from the Black, Hispanic, Asian and LGBTQIA+ communities to share their attitudes and behaviors in light of the marketing world’s scattershot diversity efforts. According to the findings, almost 90 percent of diverse and multicultural consumers report taking action because of a company investing in their community, including telling others about the brand, sharing their support on social media—or even switching to a brand, away from a competitor that does not invest in their community.

Other takeaways have major implications and offer guidance to brands include:

  • 8 out of 10 diverse consumers said they feel more positively about brands that live up to promises to make a concerted effort of support to their communities, and alternatively, 8 in 10 say they feel negatively about brands that don’t live up to their promises.
  • The large majority of diverse consumers, about 8 in 10, feel more positively about brands that advertise in targeted diverse/multicultural media.
  • Nearly 7 out of 10 said that purposely investing ad dollars with media that is owned or focused on their respective communities strongly demonstrates support.
  • 4 out of 10 of respondents said they notice ads more when they appear on targeted diverse / multicultural media channels versus mainstream media.

How brands are missing out on revenue by not engaging effectively with diverse communities

In addition, while ad spending was found to be one of the most impactful ways for marketers to demonstrate a commitment to these audiences, creating ads and content that are inclusive of diverse communities was cited as another strong demonstration of support. To put the findings into sharper focus, both came out ahead of simply sharing social posts.

“The research demonstrates that across the board, diverse and multicultural consumers recognize, appreciate and have the disposable income to spend on brands that target their communities either through authentic ad messages or media,” said Lashawnda Goffin, CEO of Colossus SSP, the sell-side technology company within Direct Digital Holdings, in the release. “Brands that have intentionally and sincerely engaged with these audiences have seen the benefit—and those looking to grow their customer base need to follow suit.”

How brands are missing out on revenue by not engaging effectively with diverse communities

Alongside the survey findings, the paper includes insights from brand leaders from HP, McDonald’s and Visa; media and marketing agency executives from Mediahub Worldwide and One50One; publishers of diverse properties such as Black Enterprise, Glitter Magazine, ODK Media, NGL Collective and Pink Media; the architect behind the new DEI trade group BRIDGE; and the chairman and CEO of MediaLink SSP.

“Siloing multicultural and diverse audiences into a separate line item in marketing plans needs to be a thing of the past,” added Alejandro Clabiorne, EVP, Executive Director, New York, Mediahub Worldwide, in the release. “This whitepaper not only makes clear that these groups are critical to marketers’ bottom lines, but also provides the types of insights that will show brands how to effectively reach and resonate with these prospective customers, building traction and brand loyalty that can fuel growth.”

How brands are missing out on revenue by not engaging effectively with diverse communities

“Making the right consumer connections is about to take on factorial proportions and while values and outlook may hold groups of targets together, beliefs and aspirations will splinter them—requiring, as the research confirms, much deeper considerations for message tone, creative and of course media placement,” said Sheryl Daija, founder and CEO of BRIDGE, in the release. “It’s time for our industry to move from DEI as a philosophy to inclusion as a core business practice and growth driver.”

Companies doing a good job of supporting diverse communities:

How brands are missing out on revenue by not engaging effectively with diverse communities

Download the full report here.

This study included qualitative and quantitative research conducted by Horowitz Research. The online surveys were conducted September – December 2022 among 1,342 U.S. adults 18+, including over 300 respondents each from the Black, Hispanic / Latin, AAPI and LGBTQIA+ communities.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter