NEW YORK, NY — At a time when the role of diversity in corporate decision making faces heightened scrutiny, a groundbreaking series of studies conducted by Columbia Business School reveals inclusive marketing still matters—but only when done well. The study finds that when brands target a demographic group, they may drive their target consumers away if the targeting feels obvious, intentional, or poorly justified.
In the study, “Fairness Perceptions in Demographic Targeting,” Columbia Business School Professors Elizabeth Friedman and Olivier Toubia, along with UCLA Business Professor Franklin Shaddy, found that consumer perceptions of fairness and their support for a brand decline when they can easily infer that demographic characteristics, such as race, gender, age, or socioeconomic status, were used to target them. This perception arises especially when the attributes used for targeting are viewed as irrelevant or uncontrollable, and the discriminatory practice appears intentional. When targeting feels discriminatory, consumers' willingness to engage with, recommend, or purchase from a brand significantly decreases.
The researchers conducted fourteen experiments with a total of 9,399 participants, supplemented by two extensive Facebook tests engaging 513,151 people to monitor their reaction to various online advertisements. In each experiment the researchers investigated how fairness perceptions changed after exposure to different demographic targeting approaches where a consumer may easily ascertain that they have been targeted for a particular aspect of their identity. The researchers also found that the less relevant (not clearly connected to the product) and controllable (something the consumer can’t change, such as race) a demographic category seemed to be, the more likely people were to have a lower perception of the advertiser. For example, when consumers clicked “Why Am I Seeing This?” option on a McDonald’s ad and it provided a race-based reason, fairness perceptions dropped from around 76% less than 65%.
In an era marked by rollbacks of DEI programming, this research shows that diversity in advertising not only meets ethical marketing standards but also enhances consumer engagement and brand perception. Future research may explore whether different demographic groups respond differently to targeting, and which specific marketing techniques or ad content make targeted groups feel the most resentful. This research highlights the critical need for companies to assess their targeting strategies carefully, with the knowledge that when the complexity of their target audience is ignored, their product may be too.
