The medium is the message: why your gender-smart investing analysis needs a marketing lens
For a long time, I’ve been talking about the need for investors to better take into account a company’s marketing and advertising practices when it comes to how we analyse its performance on gender equity.
Gender lens investors already incorporate diverse factors such as leadership, governance, employment, and supply chains into our due diligence. And businesses are increasingly paying attention to the role their advertising practices can play in challenging — or reinforcing — harmful gender stereotypes (see the Unstereotype Alliance for one example of this work).
But incorporating marketing and advertising into investors’ due diligence has been harder: in part, because it is perceived as subjective (and therefore hard to measure), and partly because of the lack of information about its impact on business. But reputation is one of the highest intangible financial values of a company. And if you get it wrong, increasingly consumers as well as investors are voting with their wallets.
I have often thought that we need our own Bechdel score-like mechanism (named for comic artist Alison Bechdel’s simple two-question formula for evaluating a film’s representation of women) to measure whether a brand’s advertising was good or bad on gender equity.
The good news is that we don’t have to do this work from scratch. There are already organisations out there doing it, which gender lens investors can learn from and collaborate with.
One such organization is SeeHer, whose Gender Equality Measure (GEM) measures audience responses to four key characteristics of women in the advertisement: their opinion of how the female characters are being presented, whether the characters are shown in a respectful manner, whether they are presented in an appropriate matter, and whether they are viewed as a positive role model. Since its launch in 2017, GEM has been used to evaluate more than 160,000 ads in an ongoing syndicated consumer study representative of the US population.
Working with IPSOS, SeeHer recently released a new report looking at the relationship between GEM and key performance metrics such as the ad’s ability to command attention, its impact on short-term purchasing decisions, and its impact on the perception that the brand meets functional and emotional needs, and therefore long-term brand loyalty.
The report found that GEM had no impact (either positive or negative) on Brand Attention, but that ads with high GEM were 20% more likely to score highly on Choice Impact (short-term purchasing decisions) and 35% more likely to score highly on Brand Relationship, aka long-term loyalty — the most important measure from a finance perspective.
Interestingly, sectors that have historically reinforced gender stereotypes such as cosmetics and baby care tended to score highly on GEM, suggesting that they are conscious of how they represent women in their ads, while more gender-neutral sectors such as durable goods, food, homecare, and beverages tend to score poorly.
SeeHer isn’t the only organization doing this work. FEM Inc has conducted multiple studies of the impact of advertising and media on audience perceptions, including a 2015 study with Google on the impact of gender bias in online advertisements. The study found that sexualised advertisements generated lower interest in the advertised product and more negative emotional responses with female users, and negatively impact long-term brand attitudes.
Also working with Google, the Geena Davis Institute’s Inclusion Quotient uses AI to analyse audio and video media content for unconscious media bias in film. The tool uses audio-visual processing technologies to measure screen time and speaking time across genders, and has been used to evaluate gender representation both in top grossing Hollywood films and in online advertising. They have also partnered with Google on research around broader inclusivity — including race, sexuality, and disability — in ads.
A company’s advertising practices don’t tell the whole story on gender, of course. Gender Fair founder Amy Cross points to the shift in advertising norms since her company started tracking advertising practices in 2014. “Back then, we had to use really blunt metrics — does this reinforce stereotypes, or does it break them? It was very common even then to see the same old tropes of a woman kneeling in front of the washing machine, and you’d rarely see a woman driving a car. It was easy to tell from the ads whether a company had any women in leadership.”
But since the advent of industry initiatives such as SeeHer and the Unstereotype Alliance, things have changed, Cross says. “Now the tricky part is that you have a lot of companies that have ads where women are doing powerful things, but you look at the best paid people and they’re all guys. It’s easy for a company to give the impression of equality externally, by giving away money philanthropically or putting a woman in the driver’s seat of a car. But it’s not as easy to share the wealth when you’re talking about tens of millions of dollars in stock options.”
Still, investors would benefit from incorporating marketing as a factor of analysis in their investment decisions: not just from a gender impact perspective, but from an economic perspective as well.
I encourage you to read SeeHer’s report, and think how you might be able to use it in your own due diligence. How could this data be used to better inform gender-smart investors? What would it take to turn it into a set of data points that investors can use? Where are the opportunities for collaboration between the advertising community and the gender-smart investing community? How can the data be used to help investee companies get their marketing right?
The reality is that there are many factors in investment analysis today, that just a couple of years ago, people said you would never get the data for: including pay gap data, carbon footprint data, and more. Now these factors are considered a normal part of investment analysis. There is no reason we shouldn’t do the same for marketing and advertising, which play a pivotal role in shaping a company’s intangible value.
One thing is for sure: the reputational risks of not getting it right are real — and decidedly economic. Smart companies are already paying attention to marketing. It’s time that smart investors did, too.