Does Brand Activism Impact Earning Potential?

Public outcry grew quickly as news broke about Georgia’s voting law upheaval earlier this year, and many major American corporations grabbed headlines by joining the fray. Several companies were quick to condemn the passing of the bill, though some key players remained on the sidelines rather than try their hand at brand activism. This begs the question: Do companies have an obligation to weigh in on socio-political issues? And furthermore, does it affect their profitability? If so, how?

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The Origins of Corporate Brand Activism

Brand activism grew out of the practice of corporate social responsibility; the idea that companies should do what they can to better society and play a positive role in their communities. Classic corporate responsibility is generally apolitical, cultivating an image of an engaged organization, outwardly supportive of non-controversial groups and causes.

 

What do consumers expect from businesses?

Research in this area is growing and points to the fact that consumers do expect businesses to speak out on societal problems. The 2021 Edelman Trust Barometer study shows that 86% of consumers expect CEOs to address societal challenges. They don’t just want a statement, either. The majority of consumers expect CEOs to actively support societal issues that the government doesn’t address, believing that CEO’s should take the lead rather than waiting for government direction.

Consumers placing value on a company’s social positions can have a real impact on business outcomes. According to the Edelman Earned Brand Study, 64% of consumers worldwide now make purchase decisions based on beliefs. These belief-driven buyers will either buy, boycott, or switch brands based Israel Phone Number on the company’s stance on societal issues.

And this doesn’t just apply to young, trendy consumers. The study shows that belief-driven buyers make up a majority in all large markets worldwide. In addition, across all age groups, and even all income levels. Therefore, the way a company addresses social issues can have a big impact on business outcomes. In addition, either by attracting a wider range of customers or alienating their key market.

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Getting brand activism right

Just because consumers want brands to speak out on social issues doesn’t mean all companies should, at least not without careful consideration. Authenticity is the primary factor. Whether it’s a CEO statement or a large-scale campaign crafted by a digital marketing agency, authenticity in the message is paramount.

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