In this year’s upfront, media companies were battling immense pressure to reduce pricing and compete for budgets stretched thin across the overabundance of new inventory in streaming. Diverse-owned media companies pitched the market this year under the additional burden of brand fear and uncertainty related to the presidential election, as well as conservative calls for companies to disband diversity, equity and inclusion initiatives, according to seven executives across media agencies and diverse-owned media companies.

"Brands move based on whoever has the loudest voice—when George Floyd was murdered, it was diverse-owned companies and multicultural populations that were the loudest, and so they moved to those screams,” said one Black-owned media executive, who spoke with Ad Age on the condition of anonymity. “Today, the loudest scream is coming from the right wing attacking DEI. [Brands] are all afraid of being sued, they’re all afraid of backlash … That’s the biggest driver [of waning ad commitments] to me.”

Two media agency executives described a waiting pattern among clients, in which portions of budgets designated for the diverse media market are being held pending the results of this year’s presidential election. One of the executives said commitments across their clients to diverse-owned media in this year’s upfront were up in very low single-digit percentages compared to last year. 

However, without the election uncertainty, the executive said upfront commitments to diverse-owned media companies would have increased by low double-digit percentages across clients.

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The second agency executive said their clients’ commitments to diverse-owned media were flat in this year’s upfront compared to last year’s. While the executive did not provide an exact figure for the ad dollars being held back due to political uncertainty, they said diverse-owned media partners were being advised to hold major post-upfront pitches until after the election.

“There are ramifications that will impact marketing and media should Trump win versus Kamala,” said the first agency executive. 

Although former President Donald Trump has denied direct affiliation with Project 2025, an initiative headed by the conservative group The Heritage Foundation, which penned a manifesto outlining proposed action for future legislation, the executive pointed to its potential adoption as an immediate danger to investment in diverse media. The text calls for the deletion of terms related to DEI from any “​​federal rule, agency regulation, contract, grant, regulation, and piece of legislation that exists,” as well as government investigations into employers it deems to be practicing “discrimination in all aspects of its operations under the guise of ‘equity.’”

The agency executive said these practices would potentially force agencies and marketers to disband groups specializing in multicultural investment and marketing.

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While the executive said they anticipate post-election investment in diverse-owned media to increase in the short-term scatter market, the withholding of dollars in the upfront is a potentially destructive trend to the market. Long-term commitments allow media partners to plan budgets for content and infrastructure development, which were a primary objective of advertisers’ original commitments to Black-owned media after the murder of George Floyd.

Brand purpose or business

In the ramp up to this year’s election, numerous companies have publicly renounced programs and hiring practices devoted to DEI, including Toyota, Molson Coors and Brown-Forman. However, the matter becomes more complex when considering the trickle effect into marketing.

Three sources at media agencies and Black-owned media companies, for example, said that Lowe’s, which announced in August that it would scale back DEI-related practices, had remained consistent in its media investments with diverse-owned partners. A second Black-owned media executive said the home improvement retailer “is a growth story” for the company despite the cuts to its other inclusivity practices.

Lowe’s did not respond to multiple requests for comment.

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The first agency executive said that the practices under political attack currently are related to hiring practices and expending resources on programs devoted to employee or consumer inclusivity. In contrast, the executive said marketing is grounded in tangible business data—the percentage of a brand’s consumers who are Black, Hispanic or Asian and the results of executing marketing curated for those groups, among others.

But where much of that is lost, said the executive, is the persistent fear of becoming the next Bud Light. Although it’s been over a year since the beer brand partnered with transgender influencer Dylan Mulvaney, leading to boycotts first by conservatives and then LGTBQ+ advocates for not offering support to the harassed influencer, some marketers have allowed the Bud Light missteps to become a reason to be wary of inclusive advertising, per the executive.

The second Black-owned media executive has seen a pullback from custom content and marketing tailored specifically for Black audiences. And within the custom partnerships the media company is creating, the executive said advertisers have shied away from messages tailored to the Black audience in favor of more generic messaging, which they attribute to the trepidation brands are exhibiting around diversity.

While brand sponsorships have remained consistent for heritage months and annual tentpoles, according to a Hispanic-owned media executive, if “money starts to materialize for diverse-owned, it’s going to be mostly programmatic” rather than custom partnerships. The executive added that clients have said they may be able to “open up more money after the election.”

State of the diverse-owned market

Amidst the pressures of the election, diverse-owned media companies are also grappling with harsh conditions that plagued the upfront for all media companies. Across the board, the influx of streaming inventory from Amazon Prime Video created an overabundance of supply that drove down pricing, pulled investment away from linear TV and stretched marketing budgets thin, Ad Age previously reported.

Read more: How streaming’s issues are impacting advertisers

Three diverse-owned media executives described the sudden growth of streaming inventory as an additional factor in marketers’ emphasis on traditional media inventory over custom partnerships as well as pulling dollars away from diverse-owned media to consolidate multicultural marketing with general market media companies instead.

In the upfront, “AVOD was a priority, sports was a priority, programmatic was a priority, and if [advertisers] happen to hit audiences that were diverse and inclusive, great,” said the Hispanic-owned media executive. “DEI wasn’t a focus.”

The first media agency executive said that the agency has significantly expanded the number of diverse-owned media companies with which they did upfront business, which spreads budgets across more partners.

Like the mega media companies, there is a long-term benefit to the difficulties of this year’s upfront, the second agency executive said. In 2021, the executive said many diverse-owned media companies raised their pricing, some as much as 20%, as spending in the market sky-rocketed 88.9%, per data from ANA AIMM (share of ad spending with diverse-owned media in 2023 was 2.5%).

During this year’s upfront, the executive said pricing for diverse-owned media companies decreased greatly in many cases alongside major media companies, which reduced pricing in streaming by as much as 40%, Ad Age previously reported. This will potentially open the door for increased spending in diverse-owned media, said the executive.

“What’s going to be interesting is looking at the window between November through early spring to see if [spend with diverse-owned media] bounces back up versus the prior year,” said the agency executive. “That will give us an indication of if it’s really the economy, or if it’s something else.”