Should Brands Weigh in on Social Issues?

Introduction

A recent CNBC poll found that 58% of US citizens believe it’s inappropriate for companies to take a stance on social issues [1]. The number is 48% for those aged 18-34. Crucially only 43% said they felt it was appropriate for companies to take a stance. That’s down from 62% in 2018 and 70% in 2019. In other words, public attitudes are shifting.

A separate Gallup and Bentley University poll found different numbers showing the same trend. Pollsters found that 41% of Americans felt businesses should generally take a stand on current events, down from 48% one year prior. Fewer than 30% of respondents felt that brands should weigh in on international conflicts [2].

This last figure is striking, and given current global events hints that this trend will continue. Over the past decade, it’s become not just acceptable but expected that major brands will weigh in on the issue of the day. From Black Lives Matter to #MeToo through issues around gender identity and abortion, consumers wanted to know they were not giving their hard-earned cash to enterprises they deemed to be against their principles. For their part, brands were happy to play along, appeasing consumer desires and sometimes outright cashing in on them. All that changed on October 7th.

The Middle-East conflict

“The last 10 days have been a pendulum swing moment for CEO communication,” said Dominic Reynolds at public relations company Kekst CNC, speaking to The Financial Times in the wake of the horrific October 7th Hamas attack on Israeli civilians [3].

“Since the pandemic, the direction of travel has been towards CEOs taking positions on social issues that matter to their customers or their people, even if there’s no link to business operations,” he went on. “We’ve observed that trend go into reverse this month. Our clients are anxious to show caution around this conflict, understanding that perceptions can be shifted by superfine nuances of language and tone.”

If that was true in the immediate aftermath of October 7th, it’s even more true now. As the conflict continues with no obvious end in sight, the Gazan death toll grows higher day by day while international support for Israel seems to be shifting from blanket to conditional. Meanwhile the fervour of feeling on both sides runs hot. Millennia of history haunt this conflict. It is complex and not likely to be fixed by a snarky Twitter post, despite many users’ attempts.

The level of complexity and nuance, paired with the strength of feeling on both sides, has dictated that companies who had proved themselves more than willing to wade into the waters of topical global issues over recent years now stand silent, conspicuously so. Because unlike some of the other social trends, this time there is no Big Bad to wag a finger at, no agreed upon villain of the piece they can ride the wave of feeling to publicly decry – no sexual abuser, racism, invading autocrat. It’s complicated geopolitics, and they hadn’t prepared for that.

Companies have trapped themselves in a corner. Vocally picking one side is a contentious move that would guarantee substantial backlash from the other. But unlike businesses of the past, they cannot just stay silent either. To distance themselves under the auspice of social issues being outside of their remit would have been fine – and expected – for decades. But they changed that when they first started chiming in on current affairs a few years ago. The question now is can they put Pandora back in the box.

Moral brands

Writing in New York magazine, Sam Adler-Bell observed that part of the reason for the fervour we’re seeing amongst citizens is that they feel helpless as to how they can affect what’s happening. “When our government is this unresponsive, it makes sense that Americans look closer to home for moral clarity,” he writes. “Powerless to influence actual policy outcomes, we settle for battling over discourse” [4].

In her article ‘The puritanical eye: Hyper-mediation, sex on film, and the disavowal of desire’, Carlee Gomes argues that at the dog-end of late-capitalism, “our ability to consume is the only remaining thing that’s ‘ours’” [5]. She makes the case that this is why audiences now want art and media from “unproblematic” artists – the last vestige by which we can express our morality is through what we choose to consume; if what we consume is made by moral figures, we too may be moral; if what we consume is made by monsters, we in some way share their sins. Her argument works equally well for why consumers have turned to “unproblematic” brands.

57% of global consumers buy or boycott products because of a brand’s stance on political or social issues, according to an Edelman’s Earned Brand survey of 2017 [6]. Nearly a quarter of consumers who said they prefer to buy from brands that share their beliefs are willing to pay more for those products. Aware that there was money to be made by taking the “right” stance, brands acted accordingly.

It represents “a real opportunity for multinational brands”, said Richard Edelman, CEO of Edelman, the world’s biggest public relations firm according to revenue. “Brands have to take on bigger issues of the moment” [7]. And so they have.

Research by the Public Affairs Council in 2016 and 2021 shows how drastically the types of issues brands are willing to engage with has changed. In their 2016 survey, the dominant themes were sustainability and education. By 2021, “more than 80 per cent of companies said they were engaged in civil rights issues such as equity on race, gender and sexual orientation, and more than 70 per cent said they were public in supporting gender identity equality” [8].

Essentially, culture war topics were adopted as a business model. “The data show us that 67 per cent of people will try a brand for the first time because of its position on a controversial issue,” said Mark Renshaw, global chair of Edelman’s brand practice [9]. “That is customer acquisition. And they’re willing to pay more for those brands. You can gain customers and they will be better and more financially viable customers for you.”

Chris Padilla, head of global government affairs for IBM, called this transition to what some dubbed the new era of ‘corporate political responsibility’ as “the biggest single change I’ve seen in my job in the last 10 years” [10].

But as with any sudden change of such a scale, one must wonder whether businesses were really equipped to face the new state of play – one of virtuous engagement – after so many years of silence.

The new era

In the age of social media, companies learned quickly that by engaging with trending topics, their posts would receive greater traction. As such, the existing advertising model went out the window in favour of brands adopting ‘personas’ online. Soon breakfast cereals were freely discussing their experiences of racial discrimination while cleaning products bemoaned their anxiety. For someone newly wading in, this was through the looking glass stuff. Long gone was Michael Jordan’s infamous “Republicans buy sneakers too” approach to sales. Instead, online personae representing products representing brands would showcase their corporate values through deliberately personal engagement, with no topic off the table. In fact, engaging with topics of greater controversy was more likely to earn brands traction. They didn’t want to say anything controversial, however, just to engage with that space.

In her excoriating piece in The Atlantic, ‘Brands Have Nothing Real to Say About Racism’, Amanda Mull observes how “instead of taking concrete actions, many companies interpret consumers’ push for social responsibility as a strong desire for them to make vague statements about even vaguer values, such as “equality” and “community,” when something racist dominates the news” [11].

She goes on: “On top of the incentive of attention, companies feel the need to weigh in so that they don’t come across as apathetic. At the same time, they know how fraught strong political statements can be. That’s when you get language so bland, it borders on inanity—the blight of “inequality of all kinds” and the need for “meaningful change.” Companies who have no business associating themselves with anti-racism movements are trying to say the right thing without upsetting anyone, walking right up to the line of politics without stepping one toe over it.”

Mull’s point is undeniably true in the main. However, some brands’ toes did step a little further than most. Nike’s Colin Kaepernick campaign is the prime example. The company gave a voice and platform to the ostracised NFL star, who at the time was unable to find a team due to his taking a knee during the national anthem as a show of protest against racially motivated police brutality. This was not a wishy washy social media statement, it was a company putting its money where its mouth is. Controversy ensued, with some burning their shoes in protest and a 3% dip in Nike’s stock, equivalent to a $4 billion loss in company value. However, that stock soon bounced back, and then some. It regained its losses, grew by 5% and achieved a record high on the stock market [12]. The risk paid off.

Writing in Forbes, Juan Isaza, Vice President of Strategy and Innovation at DDB Latina and the President of DDB Mexico, observes that “many brands saw Nike’s audacity as the new gospel: boldly supporting social causes would invariably benefit brands” [13].

But just because it worked for Nike didn’t mean it would work for everyone. Many will remember Kendall Jenner’s infamous Black Lives Matter advert that Pepsi quickly pulled after the backlash. More recently, last year Bud Light collaborated with Dylan Mulvaney, a transgender influencer, and released a special edition beer. A number of the brand’s reliable consumers called for a boycott and the company’s sales plummeted by 10.5% between April and June. By July, Bud Light sales had declined 26% [14].

The lessons

Why do some brands benefit from wading into social issues while others come undone? One theory is that it comes down to consistency. Nike had a history of sponsoring black athletes and supporting black causes. The Kaepernick campaign took this a step further but it aligned with how people viewed the company, or at least didn’t drastically verge from it to the point of appearing cynical. Bud Light had no history of alignment with the LGBTQ+ community. Without existing credentials in that sphere, the decision to suddenly engage looked potentially disingenuous and opportunistic.

Founder & CEO of communications and investigative research firm Marathon Strategies, Phil Singer, writes in Forbes that the three things companies need to keep in mind when weighing in on social issues is to keep it consistent, to remember that the internal is as important as the external, and to put their money where their mouth is [15].

By keeping it consistent, he is referring to the above point regarding only engaging with topics for which brands have existing credentials. US corporate adviser Penta Group agrees, saying, “We advise clients to engage on political and social issues based on the relevance to their organisation and the severity of their impact on the company” [16]. Companies should not needlessly wade into unknown waters where they lack any foundations.

When he says that the internal is as important as the external, he means that companies should not just be thinking about how stakeholders will react but how their employees will too. “Look after them [your employees] rather than immediately turning all your attention to the outward facing statements,” advises Megan Reitz, professor of leadership and dialogue at Hult International Business School. “Your primary responsibility is to the impact on people who you have a direct relationship with” [17].

This point holds particular relevance for how companies today are handling Israel-Gaza. Many offices, especially in multi-cultural major cities, will have people with family or friends who are directly affected by this struggle. It is deeply sensitive, and likely weighing on them. Colleagues and employees should be looked after first and foremost. Certainly before making any decisions as to whether the company will weigh in on the topic, companies should consider the potential impact that decision will have on its workers.

When Singer advises companies to put their money where their mouth is, he is addressing the issue Amanda Mull raised in her piece on the empty words offered by a number of businesses looking to gain cultural cache by exploiting pernicious trends.

“These things cannot be just statements from CEOs,” says Chris Allieri, founder of Mulberry and Astor, a PR consultancy. “They have to be followed up with actual programmes and commitments. If they are going to take a stand on an issue, they have to make an investment along those lines” [19].

Turning tides

In his Forbes article, Juan Isaza argues that consumer appetite for brands to take social stances is diminishing [20]. He suggests that amongst biting economic troubles, consumers may be growing more pragmatic, as well as reaching a state of fatigue from the endless cultural battles that consume the modern world. Potentially, too, he posits, consumers are growing increasingly critical of what they see as opportunistic companies looking to cash in on real-world problems, as exemplified by the Bud Light story.

What comes next?

It could be that the window in which consumers wanted brands to be active in their corporate social responsibility will prove to be a short one, at least on more divisive issues (as opposed to topics like climate change, on which consumers still universally want companies to take action.)

A lesser role for businesses might suit everyone. “Frankly, a lot of CEOs and boards would like to be able to diminish the degree that they’re called upon to engage on these questions,” says Aron Cramer, chief executive of corporate social responsibility advisory group BSR [21].

When it comes to the ongoing conflict in the Middle-East, the impact it will have on how brands choose to engage on social issues moving forwards feels trivial in comparison to the tragedy so many are facing. Which is perhaps why it would be for the best that there was a severance between such real-world crises and polished statements about “corporate values”. One man’s suffering should not be another’s marketing opportunity. Some things are more important.