There are also factors outside the ad industry contributing to this deceleration.
A U.S. Supreme Court ruling in June 2023 effectively ended affirmative action in college admissions and many Southern states have since introduced nearly 100 bills that would limit diversity, equity and inclusion programs at state-funded schools. Utah, for one, passed an anti-DE&I bill that goes into effect on July 1. While these bills only apply to education, they are having ripple effects throughout the U.S. Companies including marketers and agencies are skittish because of the conservative-led DE&I backlash and are questioning how they are discussing their own DE&I programs and investments in this area.
Continued financial pressures have also caused some companies to make cuts, and DE&I is one of the first areas to be scrutinized, according to some of the people interviewed for this story.
“There is a panic or fear that’s happening,” said Darren Martin, founder and chairman of integrated marketing firm Streamlined Media & Communications and founder and CEO of its subsidiary, Bold Culture, an inclusive marketing and workplace development consultancy. “People don’t want to be canceled. The influx of DE&I programs, in ideology and investment financially into certain groups, was a lot [in 2020]. And it was impactful. What we’re seeing is a backlash to that.”
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DE&I department changes
While many companies continue to invest in DE&I, 59% reported an increase in backlash to their DE&I efforts since the Supreme Court’s decisions on affirmative action last June, according to a January report from Littler, which surveyed 322 C-suite executives in the U.S. last November.
Conservative shareholders of some major marketers, including Coca-Cola Co., UPS and Home Depot, are trying to force changes that would hamper DE&I efforts at these companies, according to an Atlanta Journal-Constitution report.
There is a “growing concern about legislation being passed that could affect DE&I strategies across the board,” said Ezinne Okoro, VML’s global chief client and culture strategy officer and former Wunderman Thompson global chief inclusion, equity and diversity officer. “Though most are directly related to admission processes at universities, corporations are worried about violating any laws.”
Increasingly, Okoro said, companies are consulting their legal teams “when building DE&I strategies.”
“I haven’t specifically noticed any changes with titles based on the legislation, but criteria for DE&I programs are evolving to include more language, explicitly not leaving any room for someone to interpret exclusion,” she said. “For example, a sponsorship designed for people from Asian descent might now say their focus is on Asian-American and all persons interested in a sponsorship program. Or an employee resource group is open to all employees regardless of demographic and highly encouraged that everyone joins different groups.”
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DE&I departments are also facing budget cuts. A DE&I executive who was laid off and requested anonymity said job opportunities in advertising have been bleak. The person said they have applied to 55 jobs in six weeks and received two interviews, and they have seen no open DE&I positions within the major holding companies.
“There’s nothing,” this person said. “There’s a high probability of me not staying in advertising.”