THIS IS ME! The Financial Impact of Ad Agency CEOs and CCOs Who Are Women and People of Color in the C-Suite

Abstract: Although there have been many advances for women and people of color in corporate America, their representation in the top management positions, such as chief executive officer (CEO) and chief operating officer (COO), is still scarce. Among the CEO positions in the 2020 S&P 500, there are only four African American chief executives leading the largest 500 companies in the US. The advertising industry parallels corporate America when it comes to race, gender, and diversity in the top echelons of firms. Can these dismal statistics ever change? If given the opportunity, can White women and people of color excel as CEOs in the advertising industry? This study seeks to understand the role of ownership on revenues when diverse c-suite leaders manage multicultural or general market agencies. This work first posits the predictive relationship of private and public (holding company) advertising agency ownership on revenue. Next, the work leverages the theories of economic detour and resource dependence theory to hypothesize that the race or ethnicity of the advertising agency's CEO and agency type (general market or multicultural) are boundary conditions of this relationship. Results demonstrated that publicly-owned advertising agencies predicted increased revenues. This positive relationship was strengthened by multicultural advertising agencies yet inconclusive for advertising agency CEOs of color. CEOs of color perform at relative parity, in terms of revenue, in privately-owned versus publicly-owned advertising agencies. These findings demonstrate a racial and ethnic separation in the advertising industry, where advertising agency CEOs of color are revenue-constrained. Yet, if given the opportunity to excel into the c-suite, CEOs of color and White women can be very successful and make their ad agencies profitable. In closing, the authors discuss policy implications for advertising agency executive hiring practices as well as Diversity, Equity and Inclusion (DEI) efforts and trends.