When taking a stand on social issues, companies risk losing it all
When a company takes a public stance on a social issue, it can enjoy positive publicity, promote its corporate values, and even see a growth in profits. But when it goes the other way, the result can be irreparable damage. Tony Jaques explores how companies can choose whether championing a cause will help or hinder both its brand image and bottom line.
The question of whether corporations and CEOs should get involved in high-profile public issues is hardly new. But it vaulted into prominence last month when Brunei introduced new laws which would allow gay men and adulterers to be stoned to death.
There was a predictable global outcry, led by human rights groups and celebrities such as Elton John, George Clooney and Ellen DeGeneres.
Nike sparked controversy with this campaign featuring American footballer Colin Kaepernik, famous for kneeling during the national anthem.
This is incorrect. Nike’s sales slumped in the US market. They picked up some growth in other markets, but they did a lot of damage to their brand in the biggest market of them all. Their stock price has also slumped. To use a sporting phrase, it was an own-goal.
Hi Robert. Check the chart. https://www.google.com/search?q=nike+share+price&oq=nike+share+price&aqs=chrome..69i57j0l5.4600j1j7
The day before Nike revealed that campaign their share price was $82.20. Today it’s $84.01.
Cheers,
Tim – Mumbrella
Whilst I agree with most of your points, the assertion that you can do irreparable damage to your brand is misleading. An analysis done by the IPA over 20years worth of work proved that there is no case of advertising, cause or campaign related, that significantly effected the brand long-term.
These things are always blips on the radar, tiny scars that heal quite quickly…look at your Coopers example, a brand who recently recorded 5% increase profit YoY – doesn’t seem like current drinkers remember/care about their past failings. Even Pepsi saw an increase in sales following what was widely regarded as the biggest issue-washing blunder of a campaign.
In the long-term, the rewards for at least trying dramatically outweigh the risks of getting it wrong.
Perhaps this is because consumers don’t care either way. The product always beats the purpose. Sure, when asked, consumers say they expect this and that from brands. But when it comes to parting with their money, all that virtue signalling gets left behind.
Thanks Steven and Robert. Mumbrella’s choice of headline was pretty bold, and research shows that issue-based boycotts typically don’t have much long term impact. However the impact for individual Execs can be very real. Take for example Mozilla CEO Brendan Eich who famously lost his job following online protest for supporting a proposed ban on gay marriage in California. But I certainly agree that in the long-term, the rewards for at least trying dramatically outweigh the risks of getting it wrong, and CEOs and brands should take a stand when it’s for the right reasons.
With regard to Nike’s sometimes deliberately provocative issue campaigns, the overall affect of their football star advertisement seem pretty unambiguous. American CBS news carried a headline which said it all “Colin Kaepernick is Nike’s $6 billion man”
@Steven – your conclusion that companies should err on the side of overtly supporting social causes is an assertion unsupported by evidence.
Moreover, it sits at odds with the evidence you cited to counter the claim that such support may cause brand damage. i.e. if there has been “no case of advertising, cause or campaign related, that significantly effected the brand long-term”, why would you bother to advertise AT ALL?
You’ve used an argument against advertising in general, rather than either for or against cause-related advertising, to support an assertion that companies should take a risk in this area.
Perhaps you are biased in favour of cause-related advertising?
Its enough to make a brand want to sit on the fence! Of course sitting on the fence can make both sides unhappy with you so….