Purpose-driven marketing got here under fire in 2023, with controversies roiling high-profile brands for months on end. The outcry, which prolonged beyond online kerfuffles to really dent sales and revenue, has sent a chilling effect across an industry already contending with economic constraints. While the case for purpose stays strong, with plenty of research touting the potential advantages to the underside line, these false steps be a symptom of a larger underlying problem related to weak brand-building.
CMOs under growing pressure to tie their work to short-term results have spun too far toward performance media, experts said, making their brands’ positioning less defined and resilient against misfires. At the identical time, advertisers and agencies alike are contending with the existential threat posed by the rise of generative artificial intelligence, which could make the dearth of distinct brand identities more of a liability. Marketers have spent much of 2023 wondering whether their jobs are imperiled by automation, but purpose carries a degree of complexity and nuance that would still require the human touch to drag off.
“The importance of purpose-led marketing has probably never been greater,” said Margot Acton, a managing partner specializing in brand strategy at Kantar. “Algorithms are finding people. If you’re not a brand that snaps to my mind as essential and meaningfully different in ways in which I care about, then you definately’re actually going to be in trouble.”
As the U.S. heads into one other contentious election cycle and inflation is slow to chill, brand-building can be tested by a walking-on-eggshells environment, with purpose one of essentially the most vulnerable tactics amid crusades against “wokeness.” Purpose has flexible definitions but is usually understood because the values a brand stands for beyond making a living, similar to protecting the environment or diversity, equity and inclusion.
More of the labor for those causes may occur behind the scenes as an alternative of manifesting in buzzword-heavy ad campaigns, chatting with how purpose must be a function that touches all facets of the C-suite, not only the CMO. The close of 2023 could also function a point of reflection for marketers who eagerly jumped on the aim bandwagon without a readiness to commit to a cause for the long haul, alienating consumers on several fronts.
“Some of the essential tenets and premises got forgotten,” said Rosemarie Ryan, co-founder and CEO at Co:Collective, a strategy consultancy focused on helping businesses implement purpose. “There’s been some damage that’s been done.”
An ideal storm
A confluence of aspects tripped up purpose-led marketing initiatives and ultimately led to weaker brand-building output this yr. The economy stays mired in uncertainty, making marketers more beholden to quarterly performance measures. Backing up work that gets criticized is a tall ask for CMOs who may fear their jobs are in danger on the off probability that a single campaign element becomes a hot-button national discussion.
“When you’ll be able to say kiss my ass, you’ll be able to say kiss my ass,” said Brandon Rochon, head of creative at independent ad agency Hothouse. “Right now, you’ll be able to’t.”
Underpinning the unease are heightened political divisions, which rarely cooled from the last two election cycles and are again running high heading into 2024. Online safeguards and civility feel in crisis in a fragile moment. X, formerly often known as Twitter, has reportedly seen an uptick in hate speech under loosened moderation rules mandated by Elon Musk. Musk himself has been under fire since acquiring the platform last yr, most recently for expressing support for antisemitic conspiracy theories.
“When things blow up, the info gets buried. We take a look at the immediate response and never the longer-term implications.”
Rosemarie Ryan
Co-Founder and CEO, Co:Collective
But the toxicity is hardly localized to X and disinformation continues to spread across social media, amplified by rising concerns around AI and deepfakes. Meanwhile, premium publishers have struggled, if not outright shuttered, in a weakened ad market. Marketers have tried to maintain their campaigns away from contentious topics, including abortion and climate change, under the guise of brand safety but undercut authentic news and evaluation in the method.
In this fractured environment, purpose has grow to be a punching bag easily linked to corporate cynicism and anti-woke campaigns, a culture war sticking point that caught Bud Light off-guard last spring. Boycotts following a partnership with transgender influencer Dylan Mulvaney contributed to the brand losing its long-held spot as America’s top-selling beer, while Benoit Garbe, U.S. CMO at parent company Anheuser-Busch InBev, resigned in November. Anheuser-Busch InBev saw U.S. revenue dip 13.5% in Q3, a sign that the blowback continues to dog its business. Advertisers will enter 2024 with the fear that they could possibly be caught blindsided in a similar manner for something that will, on paper, seem innocuous.
“Brands are increasingly aware of the trouble and strategic energy required to get it right,” said Acton. “There’s a pretty determined effort against what success looks like.”
Even firms that developed a status for linking purpose with brand-building are pivoting beneath a mix of mounting investor pressure, shifting consumer tastes and public skepticism. Unilever helped lead the charge for discussions around sustainability and body positivity in the patron packaged goods category. But the Dove and Hellmann’s marketer, which is within the midst of a leadership transition, has acknowledged that its efforts have been unfocused of late and indicated that not every brand in its sprawling portfolio must be built around purpose.
“Our deal with purpose is laudable, and it inspires many individuals to hitch and stick with Unilever, so we must not ever lose it,” said Unilever’s latest CEO Hein Schumacher during a recent trading update. “But I don’t think we advance the cause of purpose by force-fitting it across every brand.”
Off-balance
Marketers are no less than somewhat guilty for the aim backlash, in accordance with branding experts. Too many jumped into the space since it was in vogue to accomplish that, only to backpedal or go silent in the present rough patch. Others rested on their laurels without conducting the hygiene needed to acknowledge that what worked in 2016 or 2019 wouldn’t play as well 2023.
“There’s a pretty determined effort against what success looks like.”
Margot Acton
Managing partner, brand strategy, Kantar
An absence of internal alignment around what purpose means and who oversees purpose-led initiatives was widely cited by experts as one of the industry’s biggest hindrances. CMOs have steadily been the general public faces behind purpose but all members of the C-suite ought to be involved to stop communication breakdowns.
“Bad execution gives anybody the flexibility to poke holes in you,” said Acton. “It’s the bad execution that’s the issue, not the determination to face for something essential.”
Beyond messaging missteps, marketers have also over-prioritized performance media that doesn’t lend brands a distinctive voice, in accordance with strategists. Retail media is one of the most important magnets for packaged goods spending in the meanwhile but is generally centered on sponsored product listing and display ads which are designed to encourage transactions. Companies which have an entrenched image with consumers, similar to Apple or Nike, may give you the chance to more easily brush off controversy due to the strengths of their brands and a degree of creative vibrancy, in accordance with Hothouse’s Rochon. The pendulum might have to swing back toward brand-building if CMOs need to safeguard against today’s marketing pitfalls, purpose-related or not.
“You can only push the lower funnel for thus long,” said Kantar’s Acton of performance marketing. “You take your foot off the gas in terms of what the brand means and stands for, and the worth of pushing the lower funnel goes up higher and better.
“That’s the balance that a lot of marketers are quite fearful about. But they operate in organizations with very short-term goals,” added Acton.
Widening ideological chasm
A wishy-washy approach to purpose and flagging brand-building have driven sharp responses from political factions on each ends of the spectrum, with some people fanning the flames of outrage and others feeling let down by brands they once viewed as allies. The latter case stung Target, which backed off some of its Pride Month promotions last summer in a move executives argued was meant to handle worker safety but nevertheless upset pockets of the LGBTQ community. Responses on the /r/Target subreddit, which incorporates employees, underline the sense of betrayal, with several users perceiving the retailer as caving to bullies and setting a worrying precedent.
Looking past activist cohorts, it’s possible brands have underestimated the overall state of consumer weariness and the way that would affect the response to daring brand-building plays. Under one-third of surveyed U.S. adults (29%) across age brackets consider corporations should use their power to affect political and social issues, in accordance with Morning Consult research. That figure is higher than before the pandemic but lower than 2020 findings, though the disparities between demographic breakouts are widening in noteworthy ways.
“The U.S. public’s appetite for corporate advocacy on political and cultural issues is comparable to where it was in the course of the 2020 presidential election,” the Morning Consult report said. “But there’s a generational and ideological chasm opening, with Gen Z adults, millennials and Democrats on one side and Gen Xers, baby boomers and Republicans on the opposite.”
Despite a set of steep challenges, purpose will remain within the marketing discussion for the foreseeable future. Morning Consult’s insights around Gen Z and millennials emphasize why: Forty-one percent of surveyed members of those groups are in favor of brand activism, up from 27% in 2019. Young cohorts carry especially strong sentiments about corporations speaking out about climate change, workplace diversity and racial issues within the U.S., the latter subject having the widest gap in support between Gen Z and millennials and their older counterparts.
A brand position addressing tangible problems — assuming it’s backed up by evidence and motion — might resonate as discerning the actual from the factitious becomes tougher in 2024. Companies also have to reckon with the incontrovertible fact that the shouting matches which have animated backlash in 2023 are prone to persist. Pumping the brakes on purpose — and the continued gravitation away from longer-term brand-building work — might make sense with regards to short-term pondering but potentially carries an existential risk.
“When things blow up, the info gets buried. We take a look at the immediate response and never the longer-term implications,” said Ryan. “Whether they prefer it or not, firms are being pulled further and further into these conversations. That isn’t going to go away.”
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