The culture war has arrived in Corporate America. More than ever consumers are voting with their wallets, rewarding or punishing companies for their stance on controversial issues ranging from social justice to sustainability.
With a divisive election year ahead of us, how are board rooms to properly navigate this minefield and, just as importantly, should they actually bother?
The short answer is yes, but brands hoping to stand out in a crowded marketplace should resist the urge to capitalize on fashionable trends if the bridge is too far for their core audience.
Anheuser-Busch found out the hard way when it paid transgender influencer Dylan Mulvaney to promote Bud Light, prompting demand for the lager to collapse.
Other companies finding themselves in the crosshairs of social debate notably include retailer Target, entertainment giant Disney and Elon Musk’s own Twitter, now rebranded to X.
Even Ivy League universities like Harvard and the University of Pennsylvania are now locked in an ugly debate with wealthy donors over their free speech policies.
“The landscape has changed significantly this year,” says Linda Tuncay Zayer, chair of the marketing department at Loyola University Chicago’s Quinlan School of Business.
“Now companies are refining their message, if not pivoting away entirely on campaigns they were enthusiastically crafting even just six months ago,” added Zayer, whose research focuses on the confluence of issues like gender and social media in advertising
In a seminal moment for the consumer-branded goods industry, for example, the new head of Unilever said he would not “force fit” every brand with some grand social message.
“The debate around brands, sustainability and purpose has arguably generated more heat than light,” CEO Hein Schumacher said during an investor call at the end of October, arguing “the topics have been conflated and the business case has got confused.”
It’s a remarkable admission given his Dove brand launched the landmark 2004 campaign for real beauty featuring everyday women instead of airbrushed models, one of the earliest examples of purpose-driven marketing.
Backlash against ESG and DEI led by Elon Musk
Nowadays policies like Diversity, Equity and Inclusion, which seek to promote underrepresented minorities, or even the once widely-accepted Environment, Social and Governance have become weaponized to the point where these three-letter acronyms are tantamount to four-letter words among many right-wing voters.
Even the left is quickly tiring of DEI and ESG overload.
In October, consumer research group Gallup reported only 41% of Americans support businesses taking a public stance. The drop from the 48% recorded in the previous year occurred across the board, but it was most pronounced among Democrats.
“We’re moving to another stage in this era of polarization where some brands are even questioning if it’s too risky to enter into the conversation at all,” Zayer says.
But it’s not unusual for corporations to find themselves on the front line of politics.
Donald Trump may have become the Republican nominee in 2016 because of his plan to build a wall, but he won the election by pledging to bring manufacturing jobs offshored to China and Mexico back to the Rust Belt.
What is unusual is the degree to which critics are willing to spin a bizarre narrative at the expense of a company to further their agenda.
The collapse of Silicon Valley Bank in March has been blamed on its ESG policies rather than its failure to hedge interest rate risk or diversify its depositor base.
Even the choice of movies has become a partisan issue, with Jim Caviezel’s Sound of Freedom becoming the sleeper hit of the summer thanks to an outpouring of support from conservatives and evangelicals. Trump even hosted a special screening in a blatant bid to ride its wave of popularity.
“Companies will have to do more of a cold risk-reward calculation going forward," public relations doyen Richard Edelman told Fortune in August, “because the world has become so politicized.”
Leading the effort to keep left-leaning ideology out of the boardroom has been none other than Elon Musk. The entrepreneur has already come down hard against ESG, calling it “the devil”, and he’s now received moral support in his campaign from Wall Street’s Bill Ackman.
The hedge fund billionaire has mounted a campaign to unseat Harvard’s first black female president, labeling her a diversity hire unworthy of the position.
Musk has now called for a complete end to the practice: “DEI must DIE. The point was to end discrimination, not replace it with difference discrimination.”
It was Anheuser-Busch’s first-ever female head of the Bud Light brand who partnered with Mulvaney in April to shift perceptions from what she called a “fratty” mainstream appeal and give it a more inclusive image for younger audiences. The ensuing debacle proved this year’s biggest cautionary tale for Corporate America.
“It really scared a lot of brands and marketers,” recalls Emma Ferrara, chief business development officer at Viral Nation, an agency that seeks to pair brands with influencers. “Some of them still wanted to pursue their social aspirations, but were unsure of how to do so. Having the right partner that really lives and breathes everything on the social side is imperative to help you navigate those waters.”
Key is consistency, authenticity and commitment
Zayer and Ferrara argue the answer for boardroom directors is not to turn inward and cede the ground to rivals.
That’s because the average consumer is more spoiled for choice than ever, so brands need to remain top of mind in order to survive.
Nowadays it takes little effort to order online from companies drop-shipping goods found on Alibaba or other popular e-commerce sites in Asia. So at the end of the day, a business must be where its customers are most found, and for coveted younger demographics that’s platforms like Instagram and TikTok.
“These days consumers want more than just to be sold a product,” says Ferrara. “They want to know more about what brands stand for and who they support.”
She argues Anheuser-Busch made some glaring strategic mistakes.
Not only was Mulvaney less than a convincing customer of Bud Light, but when the backlash did occur, management swiftly disavowed the collaboration and cut the influencer loose without so much as inquiring about their wellbeing.
This gave the appearance that Anheuser-Busch was insincere—despite 25 years of being active in the LGBTQ community—and the promotion purely transactional in nature. The beer brand ended up alienating all parties in the process.
Ferrara predicts next year could see a shift away from such one-off posts with major influencers like Mulvaney to more lasting partnerships with unique voices addressing specific needs.
If chosen wisely, content creators can be highly effective brand ambassadors, precisely because they earn their daily bread by cultivating a close connection to their audience and understanding what will appeal to them.
The key is a campaign must be perceived as organic, rooting in a considered analysis of the values consistent with a brand. The message crafted has to be nuanced since any stance will likely have valid arguments for and against, and the tone struck appropriately to avoid unnecessary offense in this charged political atmosphere.
And perhaps most important of all, executives must not waver in their commitment to it once a strategy is adopted.
“A superficial attempt at alignment is not advisable, as brands will be perceived as inauthentic,” Zayer warns.
In other words, brands just have to thread the needle. Otherwise, the culture wars could claim its next corporate casualty.
