Inclusivity means stronger brand equity

Mention DEI or wokeism today and you may enter a debate about the perils of social washing versus the necessity for social progress. Brands are testing their own voices; people are listening and reacting. We see some brands take a stand on social issues, which are met with passionate responses ranging from threats – "go woke, go broke" – to celebrations of corporate courage.

For companies considering if and how to enter the social conversation, one big question is: will it help our business and brand equity, or cause harm?

Until recently, the debate has mostly been anecdotal. One side can point to a boycott that dented the sales figures of Bud Light following a 2023 campaign with a transgender influencer, or Gilette's revenue struggles after taking on the topic of toxic masculinity in 2019.

The other side can hold up the Barbie movie as a billion-dollar triumph for women-power and progressive approaches to DEI, or Nike's sales spike after standing up for people who kneel down for the US national anthem ("Believe in something, even if it means sacrificing everything").

Fortunately, we now have a chance to go beyond wildly opposing, subjective opinions and see some facts.

Boardrooms and business leaders take note: inclusivity equals profitability.

What do we mean by inclusivity? The process of improving the terms of participation in society for people who are disadvantaged on the basis of sex, age, disability, race, ethnicity, origin or economic or other status, through enhanced opportunities, access to resources, voice and respect for rights. *

The case for inclusive advertising: It's good for business.

A September 2024 report, The Business Case for Inclusive Advertising (Unstereotype Alliance at UN Women with University of Oxford Saïd Business School, plus data contributions from Geena Davis Institute, Kantar and Nielsen), studied brand equity metrics for 392 brands over a four-year period from 2020 to 2023, covering 58 countries and multiple product categories.

The report concluded that brands with more inclusive advertising practices (content that includes and represents all people including traditionally underrepresented and/or underserved communities and is devoid of stereotype) have:

• 33% higher stronger consideration
• 62% higher likelihood of being a consumer’s first choice
• 8% higher incidence of being trialed
• 23% lower chance of being abandoned after trial
• 54% higher pricing power
• 15% higher loyalty

Campaigns scoring higher on inclusive advertising metrics have 3.46% higher sales lift than lower scoring campaigns in the short term.

In the longer term (i.e., 1-2 years following campaigns), brands with higher average inclusive metrics see 16.26% greater sales performance.

These numbers indicate quite clearly that inclusive advertising increases brand equity, delivers more valuable over time, and performs better commercially in the short and long term.

When I told a colleague about this report, she said: “Shocker: appeal to more people and improve your sales.”

What brands can do to make inclusivity credible and profitable

It does seem quite logical. But is it as simple as diverse faces in an ad campaign? Not quite. Here’s what the same report recommended for brands who want to improve their businesses through more inclusive practices (these 5 points are taken directly from the report, with some alterations of the descriptions):

1. Strengthen leadership accountability and capabilities.

Leading brands in this space are investing in training leaders to be aware of their own biases and preferences and actively seek out different views and perspectives. They view inclusion not as a compliance or nice-to-have but as a strategic business asset.

2. Make inclusion measurable.

Transparency and accountability lend greater authority and value to a brand’s inclusivity efforts. Leading brands are using methodologies such as the Gender Unstereotype Metric and Progressive Unstereotype Metric as a key driver for change.

3. Ensure representation of diverse talents.

Credibly inclusive brands walk the talk, prioritizing the hiring of diverse talent for leadership positions, and creative and production teams. This includes rethinking hiring, appointments and succession planning, as well as required capabilities and recruiting channels. These shifts help access diverse talents that are too often left out of current, traditional processes.

4. Prioritize audience insights and cultural understanding.

By understanding the dynamics and tensions that are faced by audiences at large, and especially segments in society that are underrepresented, brands can become positively influential by helping shape and transform culturally appropriate messaging and communications.

5. Act now but with a long-term view.

Creating systemic change – and deriving the social and financial benefits therein – is a long-term project that requires long-term commitments and resources.

I would argue that another point should be added:

Ensure your brand strategy can credibly serve as a foundation for inclusivity.

There’s a credibility problem when brands that normally project and accentuate harmful stereotypes, or ignore social issues that they exacerbate, or challenging topics in which they could play a constructive part, suddenly change their tune during Pride month or International Women’s Day with transparent tokens of shallow support.

At MetaDesign we consider these short- and long-term views when we create brand strategies, such as:

• What contribution can our clients make and communicate to strengthen the social fabric or help achieve environmental goals?
• What tone-of-voice principles or character attributes could believably speak to issues that go beyond price points to how people could be empowered in their own lives?

That’s what a contemporary brand strategy should achieve and that’s what role it has in making inclusive advertising more effective, and now we know, more profitable.

If you’d like to talk about how to bring inclusivity and social impact more profitably into your brand strategy, feel free to contact us any time.

Joshua Englander is a strategy partner at MetaDesign Berlin. joshua.englander@metadesign.com.

*As defined in the United Nations publication, Identifying Social Inclusion and Exclusion:" Department of Economic and Social Affairs.