Boycott’s Work, Make CEO’s Nervous

| Strategize!

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.”

Bud Brouhaha

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.”

Pepsi Quiet

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.”

  • Aquifer

    I think it rather strange that we haven’t seen a call for boycott of the major gasoline supply companies like Sunoco who have major interests in the DAPL company …

  • If our long term goal is a sustainable human civilization, we must begin to reorganize all of our relationships along lines other than money. We don’t have to ship raw materials half way around the world to be processed, then half way back to be sold, behaviors driven entirely by monetary market economic forces that stock the shelves of Walmart and Amazon, creating wealth for a handful while pouring massive amounts of carbon into the atmosphere in the process. Trying to boycotting everything is a kind of monetary insanity. What we really need to boycott is our monetary market relationship to each other and to our shared environment by recognizing that our continued existence as a species is entirely dependent upon our ability to share and to collaborate with our environment and with one another. We have built a civilization upon a flawed foundation of monetary relationships, a house of money that Nature is in the process of collapsing for us. It is not just Trump’s America that is in denial. It is still the vast majority of Americans of all political affiliations. Business as usual is no longer an option. It is not a matter of mustering protests or boycotts, but an implacable social and environmental disaster that is tearing our so called civilization apart at the seams. Whatever civilization we have managed to create has been derived solely from our ability to collaborate and share with one another. The competitive monetary market economy is only a race to see who will contribute the most to our own dissolution. We are truly a culture in decline.

  • There has been another issue that has been playing in the back of my mind for some time now concerning the #NoDAPL boycotts. If eight men control more than half the world’s wealth as reported by Oxfam, then even if the rest of humanity managed to withdrawal all of their wealth from those banks, the bankers would still probably manage to build as much oil infrastructure as they felt necessary to insure massive amounts of profit for the benefit of their eight investors. I am not even convinced that the Oxfam report concerning the distribution of the world’s wealth even takes into account the vast amounts of wealth stashed in secret tax havens around the world. Many of us already recognize that voting at the ballot box is pretty much an exercise in futility. Trying to vote with our dollars through boycotts may well be just as futile. I am not in any way suggesting that we should not try. We must try through whatever means available to us. But the wiser course of action in my opinion might be to not play the game that has been design around us losing by abandoning the entire monetary system that is driving the unsustainable behaviors across the entire spectrum of our global civilization from the poorest of the poor to the wealthy eight.

  • Aquifer

    No doubt we have to ditch the market model of life – in the meantime however we have to use the tools we have and boycotts work …

  • Aquifer

    No point in building infrastructure for a product that folks don’t buy – the profit comes from the sale of the product …

    As for elections – I agree that as long as the only choices we make at the ballot box are D/Rs it is an exercise in futility …