Juan Isaza is Vice President of Strategy and Innovation at DDB Latina and the President of DDB Mexico.
One of the most extensively studied case of a brand taking a significant risk to champion a social or political stance is Nike’s sponsorship of NFL quarterback Colin Kaepernick in 2018. At a time of intense political polarization, when any expression in art, music or sport was seen through a political lens, Nike chose to back an athlete who had dared to protest racial inequality by kneeling during the national anthem. Those offended by Nike’s move publicly burned their shoes. The resulting controversy was massive, leading to a 3% dip (paywall) in Nike’s stock, equivalent to a $4 billion loss in company value.
However, within a month, the stock rebounded, regained its losses, grew by 5% and achieved a record high on the stock market. This was complemented by a rise in Nike’s social media following. Many brands saw Nike’s audacity as the new gospel: boldly supporting social causes would invariably benefit brands. By the end of that year, Accenture released a study stating that 62% of consumers want companies to take a stand on social, cultural, environmental and political issues close to their hearts. By 2019, a Sprout Social study revealed that 70% of consumers felt it was essential for brands to take a stance.
So, why, four years later in 2023, did Bud Light take a similar risk and everything went awry? To commemorate Women’s Month, Bud Light collaborated with Dylan Mulvaney, a transgender influencer, and released a special edition beer. Immediately, many of the brand’s traditional consumers called for a boycott, and the company’s sales plummeted by 10.5% between April and June. Furthermore, Bud Light sales had declined 26% by July.
It’s easy to point out mistakes in hindsight. Many analysts have blamed political polarization (also prevalent during Kaepernick’s time) while others argue beer isn’t a category people want politically controversial. Some note that Bud Light historically didn’t align with values related to fighting for LGBTQ+. Others believe the brand misunderstood or didn’t know its real consumer base.
However, the most intriguing analysis seeks to understand the shift in consumer mindset between Kaepernick’s and Mulvaney’s era. How can brands continue brave marketing without detrimental consequences? From 2018 to 2023, consumers’ lives have drastically changed, influenced by events like the pandemic. Brands were perceived as part of the solution during these hard times. But are consumers now viewing brands more pragmatically, de-emphasizing their political roles?
A recent CNBC study suggests that consumers are growing disinterested in brands championing causes. According to the study, 58% of citizens believe it’s inappropriate for companies to take stances on issues. While this number drops to 48% for younger individuals (18-34), it’s still higher than the 43% who find it appropriate. This 43% is far from the 62% in 2018 or the 70% in 2019 who wanted brands to tackle political and social issues.
Three potential reasons could explain this shift in consumer perspective:
1. A More Pragmatic Consumer: Rising prices and living costs make consumers prioritize product offers over brand ideologies. While they might strongly react against a brand supporting a cause they disagree with (like Bud Light), they might be less likely to prefer a brand simply for championing a sympathetic cause. In the CNBC study, 47% says they would boycott a brand that takes a stand vs 24% that would just buy it.
2. Consumer Fatigue from Political Debates: While polarization persists, consumers might be distancing brands from their political realm. Their ideology might be reserved for influencers or social media debates, not for the supermarket. A CivicScience study showed the only area that maintained interest over the past year was environmental issues, with political and social topics becoming less relevant in brand preferences.
3. Consumers Critical of Opportunism: Brands with long-established ideological positions, whether liberal or conservative, have stronger credentials to champion causes. Brands that embody certain social or ideological values internally are better positioned to externalize them.
Post-pandemic, consumers’ relationship with brands seems to have evolved. It’s not that they don’t care about a brand’s actions, values or stances, but these factors appear to influence purchase decisions less. The same study showed a 5 points increase (from 32% to 37%) year-on-year of respondents claiming that no political or social reasons influence their brand purchase decisions.
Brands choosing to adopt a political or social stance should do so after an in-depth understanding of their audience, coupled with a keen monitoring of evolving debates and polarization. Before any decision on this direction, they should question the relevance of the political or social flag in purchasing decisions within that specific category. If the brand lacks authority based on its past actions or its area of expertise, it’s better to avoid delving into political or social issues that might be irrelevant or could generate negative controversy or back fire.
As political debates intensify in the U.S., and views on gender or race become clearer, time will tell if consumers want brands to take stances again or if they’ll continue preferring that the two remain separate entities. The truth is that consumers expect brands to have a commitment to having a positive impact on the world. Brands cannot disconnect from social or political realities. The responsibility is to be present. The question is to what extent they commit to an agenda that is supported by or identified with a political party or candidate.
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