The Importance of Diverse Suppliers

By Bill Duggan

Supplier diversity has been a key focus of our work at ANA all year. In May, ANA released "The Growth of Supplier Diversity" that provided a deep dive into supplier diversity in marketing/advertising from the marketer point of view — covering benefits, challenges, spend, goals and measurement. Throughout the year, we've regularly updated our "Certified Diverse Suppliers Resource List."

In this new work ("And Now a Word from the Diverse Suppliers: The Supplier Perspective on Certification") we've flipped the process; rather than surveying marketers again, we surveyed the diverse suppliers on our resource list. The focus was on certification — to understand its importance, benefits, challenges, ease/difficulty of the certification process and more.

An in-going hypothesis was that suppliers would find the certification process to be difficult. But that wasn't the case. While 31 percent characterized the process as difficult, 35 percent felt it was easy and 34 percent were neutral — almost exactly evenly distributed.

When we asked suppliers to, "Please rate the importance of your business becoming certified," 46 percent rated that as very important. Quite a statement!

The diverse suppliers cited multiple benefits of obtaining certification. Businesses are included in more RFPs (62 percent), which provides additional exposure to corporate marketing departments (58 percent), which leads to increased sales (52 percent).

Diverse suppliers also weighed-in, via responses to an open-ended question, on industry resources that could help them build their businesses. Representative responses were:

• "Increased exposure and visibility with brand marketers and procurement teams; the opportunity for us to get in front of their community and share who we are and our capabilities."
• "As brands/companies often have difficulty identifying and vetting qualified diverse suppliers, providing matchmaking opportunities with diverse suppliers would be extremely helpful."
• "Exposure is always beneficial, but also really pushing clients and agencies to be much more involved and aware."
• "Educate clients on the value of working with diverse and small suppliers. It doesn't mean sacrificing quality or impact, and it should not be limited to Tier 2 relationships."

The ANA strongly encourages qualified suppliers who are not certified to consider getting their certification.

• Certification helps suppliers be included in more RFPs, which provides additional exposure to corporate marketing departments, which leads to increased sales.
• Certification maximizes the opportunity for suppliers to be considered and hired, since some companies make certification mandatory for doing business with diverse suppliers.
• Certification authenticates that a supplier is indeed who they say they are. It removes the burden to confirm the ownership of a company from the marketer and is instead handled by the certification organization. Major certification organizations include:
• NMSDC: National Minority Supplier Development Council
• WBENC: Women's Business Enterprise National Council
• NGLCC: National LGBT Chamber of Commerce
• MWBE: Minority/Women-owned Business Enterprises
• Certification is not difficult, for most, and the barriers to obtaining certification are minimal. The time needed to gather/complete the required documents and the time to become certified after submitting paperwork are not challenges for most suppliers. Furthermore, once the initial certification is done, recertification is much easier. Cost is not an issue. As examples, for businesses with over $50 million in annual revenue, fees for initial certification are only $1,250 for WBENC and $1500 for the New York & New Jersey Minority Supplier Development Council. Annual recertification fees can be even lower.

The CMO Growth Council was established by the ANA and Cannes Lions to focus on driving enterprise growth. The Society and Sustainability priority of the ANA Growth Agenda provides a guide for the industry to leverage marketing as a sustainable growth driver. A specific mandate for the Society and Sustainability working group is to eliminate systemic investment inequalities in the media and creative supply chain.

Support of diverse suppliers helps address such investment inequalities. When we invest in multicultural enterprises, we not only increase media effectiveness, we also directly invest in the communities. We help close income and wealth gaps. Closing those gaps means more purchasing power, which drives market growth, which is good for society and good for business.

This article was originally published on MediaVillage.