Boycott’s Work, Make CEO’s Nervous
Above Photo: Weber Shandwick
Study finds that 57% of executives say boycotts have impact
Polarized climate has made it harder to avoid controversy
When the Budweiser brand prepared to release a potentially controversial commercial two weeks ago, its social-media monitoring team got to work.
The ad tackled the hot-button subject of immigration by depicting founder Adolphus Busch coming to America in the 19th century, and the company wasn’t sure how customers would react. So it tracked tens of thousands of posts to see how the commercial was received and took solace when 78 percent of online conversations were neutral or positive. Despite some pleas to boycott Budweiser — misspelled in a Twitter hashtag as “Budwiser” — managers decided they had made the right decision to air the ad.
Those types of deliberation are increasingly common for companies in America’s polarized culture, which presents a damned-if-you-do, damned-if-you-don’t dilemma. Advertise on Breitbart News and get boycotted. Stop advertising on Breitbart and get boycotted. Cooperate with Trump and get boycotted. Don’t cooperate with Trump and get boycotted.
It’s no longer possible for U.S. companies to avoid controversy, so they often have to decide what groups are less risky to offend.
“Consumers are holding brands accountable as though they were political candidates, and they’re voting again and again,” said Micho Spring, head of global corporate practice at Weber Shandwick, a public relations firm that handles crisis management.
A Weber Shandwick study, set to be released Wednesday, found that 57 percent of top executives believe that boycotts can affect a company’s bottom line. The survey polled more than 1,000 executives and 2,100 consumers around the globe last year, just as Donald Trump was wrapping up the Republican nomination on his way to the White House.
The president himself urged consumers to boycott brands while on the campaign trail, including Macy’s Inc. and Oreo cookies. More recently, he upbraided Nordstrom Inc. for dropping the product line of daughter Ivanka, opening another front in the boycott wars.
Coca-Cola Co., PepsiCo Inc., Starbucks Corp., Nike Inc., Uber Technologies Inc., Under Armour Inc. and Kellogg Co. are just some of the companies that have faced the wrath of infuriated consumers on both sides in the past year. Their reactions have included direct challenges to the president’s policies, attempts to stay above the fray by appearing nonpolitical — and silence.
“It’s more important than ever for companies to understand who they are and the value that they contribute to society, to their employees, to their communities and to their consumers,” Spring said. “Because those values need to be the platform upon which they decide whether or not to respond to current events.”
Anheuser-Busch InBev NV, which owns the Budweiser brand, is a case in point. Its immigration-themed commercial, which aired during the Super Bowl on Feb. 5, included a man shouting “Go back home!” at the company’s immigrant founder. Though AB InBev marketing head Marcel Marcondes said the piece wasn’t meant to set off a controversy, “you can’t reference the American Dream today without being part of the conversation.”
What’s clear from the Weber Shandwick survey is that executives must figure out how to walk the tightrope. Findings include:
- 41 percent of shoppers and 46 percent of executives say companies should express an opinion or take action on controversial issues.
- 40 percent of consumers regularly or frequently talk about how honest and ethical companies are.
- 34 percent say they’re buying more from companies or brands that share their values.
- When people want to learn more about a company, 64 percent say they care what they find about the brand on social media.
Coca-Cola Chief Executive Officer Muhtar Kent joined the debate after Trump signed an executive order banning immigrants from seven predominately Muslim countries. Kent said Trump’s ban, which has been blocked by the courts, was against the company’s core values. Coca-Cola was subject to a subsequent boycott hashtag the day after the Super Bowl. One of Coke’s advertisements during the game was a three-year-old ad featuring people singing “America the Beautiful” in their native languages.
“I made a public statement because of our resolute belief and commitment as one of the largest employers in the world as a system — 770,000 associates around the world in more than 200 countries — how resolute we are in our commitment to diversity, our belief in fairness, inclusion,” Kent said on a call with media. “Anything like that proposal would be contrary to our core values and core beliefs.”
Meanwhile, rival PepsiCo Inc. stayed silent on the ban. Even so, the company has remained on pro-Trump boycott lists due to CEO Indra Nooyi’s previous comments. Two days after Trump’s election victory in November, Nooyi, who was born in India, talked about the reaction of her family and employees.
“Our employees were all crying and the questions that they’re asking, especially those who are not white, ‘Are we safe?’ Women are asking, ‘Are we safe?’ LGBT people are asking, ‘Are we safe?”’ she said at an event sponsored by the New York Times. “I never thought I’d have to answer those questions. The first thing that we all have to do is assure everybody in the United States that they’re safe. Nothing has changed because of this election. What we heard was election talk, and we will all come together and unify the country.”
Since making those comments, Nooyi, a Hillary Clinton supporter, joined the president’s Strategic and Policy Forum. She has remained publicly silent on his various executive orders.
Even if boycotts don’t affect sales, a tarnished reputation can hurt a brand or hinder a company’s ability to hire and retain talented employees, Weber Shandwick’s Spring said.
That’s proved to be the case for Under Armour. The Baltimore-based athletic brand was downgraded by an analyst at Susquehanna International Group after CEO Kevin Plank called Trump a “real asset” to the U.S. The comments drew rebukes from Under Armour’s own spokesmen, including basketball star Steph Curry, and could take a toll on the company’s stock price and reputation, analyst Sam Poser said in a report.
“It’s certainly a time of uncertainty and its a time where you have to weigh actions and reactions in a very turbulent environment,” Spring said. “But brands that know who they are and stand on principle are gaining.”