Should Business Take A Side In The Ukraine-Russian War? A Discussion Regarding Brand Purpose

Dark and rumbling clouds of war are quickly moving from the East toward European skies while the business debate about brand purpose hits new heights: should businesses take a side , plus support Ukraine? Or whenever they be silent instead?

Yes. Here we go, again. One more post about brand purpose. If brands cannot include something positive to the current scenario, they should shut up and leave the job to those who can. The debate is upon.

The truth is: the more time passes, the more I observe this loud race of brands looking for or create new socially acceptable, ethically-sustainable purposes.  

Deepening the discussion

The (unjustified? ) pandemonium generated by Peter Field’s talk for the IPA on brand purpose at the end of 2021 is a indication of the hot debate currently in progress in most of the advertising channels. Yet I cannot restrain a smile every single time I actually hear sentences like: “Our audience has to understand our new brand name purpose” or “ It’s time for you to rethink our North Superstar ”. If you experienced no brand purpose until today – and still run a successful business – why would you think about a new purpose right now?

Field’s analysis, which is based on the IPA’s effectiveness database plus mainly focused on B2C manufacturers, demonstrated that the average purpose-driven marketing campaigns were considerably less likely to generate long-term business effects when compared with traditional non-purpose campaigns.  

Then Field went back to the data and picked those brand objective cases that performed much better; at that point, he demonstrated which they perform better over the entire set of non-purpose campaigns. When you all can imagine, very few had been convinced.

Field says: “What these findings show is the fact that we shouldn’t dismiss brand purpose out of hand. There can be significant benefits for companies in deploying brand purpose campaigns – both for engaging their own employees, stakeholders and investors as well as for driving customer sales.  

When it is accomplished well, when it is genuine plus credible, brand purpose can be extremely powerful. ” As Mark Ritson mentioned , “his intent was not to defend purpose, but to create a case for it”.

The situation of Peter Field’s studies just a sign of a much wider conversation – I ought to probably use debate instead.  

Enterprises that have carried out business, more or less ethically, more or less successfully, in the last decades, are now suddenly discovering that creating a brand purpose might help with boosting their profits, especially within the new generations of shoppers – millennials and Gen Z – who are attracted by manufacturers that put purpose on the center of their content effort, definitely over my generation was.

Byron Sharp, author of the seminal book “How Brands Grow”, and currently one of the most influential marketing academics, has been critical of the widespread adoption of social purpose ; he argued that it could lead to brands becoming too similar and undifferentiated. Therefore , if the marketing community succeeds in teaching consumers they should only buy brands that will donate to charity or even are seen as doing good for the world, all labels can certainly take that over in an exceedingly undifferentiated world. Marketers need to instead have more self-confidence plus belief in the good marketing and advertising does in the world by itself with out seeking a higher purpose, he argued.

As Kate Smith, a strategic marketing advisor, says , “the issue isn’t with purpose, per se. The issue is with how objective is being developed and used. Is it being used to establish what the business does and how it does it, or could it be being used merely to create an illusion of social obligation or just as the basis for any millennial targeted campaign”.

“The issue isn’t along with purpose, per se. The issue is along with how purpose is being developed and used. ”

Kate Jones

The race to a purposeful brand didn’t start last year with Field, of course. Back in 2019, Unilever’s CEO published a report showing that brands of the group having a clear articulated purpose grew much faster compared to rest of its businesses . Back then the company committed to a future in which “every Unilever brand will be a brand with purpose”.

This is what CEO Alan Jope said: “We believe evidence is clear and compelling that will brands with purpose grow. In fact , we believe this particular so strongly that we are prepared to commit that in the future, every single Unilever brand will be a brand with purpose. ”

Brand purpose in appearance or on the business’ core? Let’s have a look at some brands

It’s not just Unilever. Let’s have a look at some of these purposeful brands. My checklist is not comprehensive;   but nevertheless, it provides a good scenario regarding enterprises that are embracing a brandname purpose model and the genuine facts; just have a look and judge for yourself.

Google 

“Our mission is to organize the world’s information and make it globally accessible and useful”. Google won’t show its own revenue or revenue figures at a country level .

In addition , Google has not disclosed its plans to get a censored internet search engine in China .

Additionally , Google+ (social network) has been closed following a data scandal. And this could be an endless list. Finally, nearly every US state (paywall) and Western european country is now investigating the company for anticompetitive behavior in its advertising business.

Volkswagen 

The particular Group’s goal is to offer attractive, safe, and environmentally sound vehicles which can contend in an increasingly tough market and set world standards in their respective class.  

After that Volkswagen deliberately programmed it is Turbocharged Direct Injection (TDI) diesel engines to start their emissions controls only during lab testing, which caused the vehicles’ result to meet US standards, yet emit up to 40 moments more poisonous toxins in “real-world driving”.

The folks in Volkswagen deployed this software program in about 11 mil cars worldwide from this year through 2015. These toxins were partially responsible for the death or disability associated with hundreds of people. Volkswagen alone continues to insist that even though eight million cars bought from Europe were fitted with defeat devices, they were not necessary to pass EU emissions lab tests and therefore it has committed no crime in the EU.

Siemens

Siemens ‘ purpose is “Being Accountable – Excellent – Innovative”, with responsible interpretation meaning that the company is committed to ethical and responsible actions.  

Siemens will be remembered for just one of the biggest corporate problem probes in history when it agreed in 2008 to pay regarding 1 billion Euros in fines and penalties right after investigations by U. T. and German authorities into bribes this paid to win agreements .

State Street

State Street created the ‘Fearless Girl’ sculpture and told all of us its mission is to have more diversity into corporate professional teams. The US government is claiming instead that State Roads pays female employees and people of color less than white males (paywall).

Specifically, State Street has discriminated against 305 top female black employees by paying them less than men in the exact same positions and has agreed to pay $5 million to settle the U. S. Department of Labor’s allegations .

grayscale photo of statue of man

State Street’s fearless gal

Audi 

Audi invested millions on a feminist Super Bowl place in 2018 , which proclaimed: “Audi of The united states is committed to equal purchase equal work”.

In the advertisement, a father watches their daughter in a downhill trolley race and thinks about whether she is being judged based on her gender. At the core of the ad is whether she will be paid less than a man, in spite of her talents. But… Only two women sit upon Audi’s Management Board (it was zero, until a couple of years ago), and its 14-person United states executive team only includes a few women.

In the press release for the Super Bowl advertisement, the car company said it had been publicly committed to supporting women’s pay equality and pointed out that half of the candidates for the graduate internship program must be female.  

Rather than avoiding the conflict, Audi provides responded to negative comments generating even more criticisms .

BP

“Our objective is reimagining energy for individuals and our planet. We want to assist the world reach net zero and improve people’s lives”. Currently, around 96% associated with BP’s capital expenditure can be on traditional oil and gas.  

Whether or not BP will keep to these promises remains to be seen, but we’re not so positive . “While BP’s advertising focuses on clean energy, in fact more than 96 per cent of the company’s annual capital costs is on oil and gas, ” said Sophie Marjanac, a lawyer at ClientEart .

Mondelez’s Cadbury

Mondelez’s Cadbury launched a new purpose positioning in 2018, to “shine a light on the kindness plus generosity that we see within society”; it re-launched the global brand positioning being a “family brand founded on ample principles”.  

But… Cadbury manages to pay zero corporation tax , for the eighth consecutive 12 months. The company recorded a 740% jump in profit for that year to 31 December 2017, with turnover rising to £1. 66bn from £1. 65bn. In recent years, Cadbury’s corporate owners have consistently managed (legally) to avoid paying any corporate tax.

Alex Cobham, who runs the Tax Justice Network, notes that Mondelēz regularly carries out “financial engineering that is really sad given Cadbury’s long history of working to generate value in the communities where these people work”.

Starbucks 

“Inspire plus nurture the human spirit. Anyone, one cup and one neighbor at a time”. Starbucks tells us its brand purpose is to build community while performing everything it may to minimize its tax obligations . In 2017 Starbucks paid just 2 . 8% of taxes .

And what do Nike , Zoom , FedEx , Salesforce , Verisign , Xilinx and many other brands have in accordance? According to the Institute on Taxation and Economic Policies (Itep), they paid $0 Federal Taxes in 2020.

Ought to we mention Netflix?

Netflix continues its taxes avoidance streak , reporting an effective federal corporate tax rate of 1. 1 percent in 2021 on $5. several billion in profits. The company avoided more than $1 billion dollars in taxes in 2021 alone.

At a time when a lot of small businesses face pandemic-related difficulties, Netflix is among large companies that are handsomely profiting from changing consumer behavior.  

Yet, its sales and profits generated in the UK are moved somewhere else and many inquire if and when the company will start spending any corporation tax .

And I won’t write about Amazon 

The company recently reported record profits of more than $35 billion; but it (legally) avoided about $5. two billion in corporate federal income taxes given that 2018, despite receiving large subsidies at the state degree.

I’m not going to waste your own (and my) time upon Amazon, though – a whole book or documentary series won’t be enough to list all its controversies, through poor working conditions to environmental impact, from interpersonal challenges to opposition to trade unions, and then personal privacy infringements, antitrust issues, and all other manner of scandals the company keeps perpetrating .

As Greg Hoffman wrote a while ago: “Taxation may be unpleasant. But taxation is by far probably the most potent source of resources with regard to societies to redress interpersonal ills. Taxation funds training, housing, health initiatives, social programs. When corporations get extraordinary measures to avoid paying taxes, they are doing extraordinary harm to citizens who have the best need…”

“When companies take extraordinary measures to avoid paying taxes, they are carrying out extraordinary harm to citizens who have the greatest need”

Bob Hoffman

The thing is: it’s not unlawful to pay zero taxes. But how can we consumers trust all those powerful purpose statements, commercials, posts and campaigns when we know – since we know – they’re coming from brands that are deliberately staying away from the basic pillars to support citizens and their communities?

But, there are some brands that are really purpose-driven

Think of Patagonia , for example , where the purpose provides always preceded the products ever since its foundation. Mark Ritson estimates “they (these purpose-driven companies such as Patagonia) consist of about 0. 2% of the world’s brand names.

The rest are commercially powered operations that are not necessarily bad, and often take a responsible approach to packaging and other business issues, but are not in a position to intervene on major societal issues”.  

Patagonia’s Activism website section

Properly used, the purpose is a way for companies to think deeply about what they do, how they do it, and what their impact on the world is as a result. It can be part of the essential shift from profit maximization to value creation.  

As Field confirms “the neat thing about brand purpose” is that when it’s done nicely, it introduces new proportions to a category so a brand can differentiate itself in manners it couldn’t before. A well-crafted and executed brand purpose brings a raft of benefits that motivate, rather than distract from profitability:

  • A more focused strategy with clear priorities. An obvious purpose provides guidelines to get what a business should and shouldn’t do
  • An ability to attract and maintain staff, and keep them motivated. The desire for work to be more meaningful (think about the ‘Great Resignation’) will keep grow, particularly amongst millennials. In the war for talent, purpose can be a potent tool
  • An ability to attract the best partners
  • Stronger investor curiosity and support

Finally, we have brands quietly working with purpose while opting not to position explicitly upon it through their marketing and advertising.  

For two decades, Pret a Manger has quietly provided destitute people jobs and open shelters designed for rough sleepers; in addition , they have taken unsold sandwiches away its shelves and, rather than discounting or dumping all of them, distributed them to shelters plus food banks. Pret does not talk much about this whatsoever. It continues to position on fresh, handmade food instead.

I can give you another example from Rock Content itself. The company was founded “to make marketing better while having a positive impact in the world” plus stands for a marketing this is a force for good, inclusive which exists primarily for the advantage of others.

To “make advertising better” means connecting brand names with the best creative skills, adding work opportunities, providing assistance, educating new marketers, and sharing free digital knowledge .

Rock Content commits to donating 1% of its equity to be committed to grassroots activism and social impact initiatives and promotes employees to be a force permanently by donating 1% of their work time (at minimum 3 days per year) to give back to the community.

All of us rarely promote our interpersonal impact initiatives; the release of the annual social impact report probably represents one of those couple of cases.

Properly used, brand name purpose is a powerful method for businesses to think deeply as to what their impact on the world is definitely. But again, it can’t (and it shouldn’t) be used merely to create an illusion associated with social responsibility or, a whole lot worse, as a way to boost company income.

References:

Philip Field makes strong case for potential power associated with brand purpose campaigns: https://ipa.co.uk/news/power-of-brand-purpose/

Critique of brand purpose is definitely ‘naïve and unjustified’, statements Peter Field: https://www.marketingweek.com/peter-field-criticism-brand-purpose/

Good objective, bad purpose – Mark Ritson on Marketing Week: https://www.marketingweek.com/mark-ritson-good-purpose-bad-purpose/

Brand purpose & brand signalling: https://www.linkedin.com/pulse/being-purpose-led-rather-than-signalling-kate-smith/

Hmmm, Danone: https://nickasbury.substack.com/p/hmmm-danone

In defence of brand name purpose…sort of: https://slightlyrandom.uk/blog/in-defence-of-brand-purpose-sort-of

A Friedman doctrine – The Social Responsibility Of Business Would be to Increase Its Profits: https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html

Regarding brands and the Ukraine-Russia turmoil: https://www.thedrum.com/news/2022/03/01/media-agencies-struggling-keep-brands-advertising-around-bleak-ukraine-news-cycle https://www.businessinsider.com/advertisers-are-avoiding-hard-news-during-russia-ukraine-war-2022-2?r=US&IR=T

The post Should Business Take A Side In The Ukraine-Russian War? A Discussion About Brand Purpose appeared first upon Rock Articles .

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