00:00:00
Americus Reed: And it's an interesting
point, Dan. You're 100 percent correct.
00:00:02
There are at least three
reactions that we notice in the marketplace. One is to say
nothing and say, listen, to your
00:00:09
point, I'm not going to get
involved in any of this. Another is to say kind of an approach
that is to elevate. So for
00:00:16
example, you might
see a brand, product, service or organization come out and say,
"Hey, it's important to vote,"
00:00:22
without saying anything
else beyond that. Then you have the companies that are willing
to come out and say, "Listen,
00:00:28
this is our response. We are
aligning with a particular political ideological viewpoint
and/or political party, and
00:00:34
here's why." Dan Loney: Welcome to the Ripple Effect, the
podcast that takes you on a
00:00:38
journey through the minds of
Wharton faculty. I'm your host, Dan Loney, and in each episode,
we'll be diving deep into the
00:00:45
inspiration behind the
groundbreaking research that Wharton professors have
conducted, and exploring how
00:00:51
their findings resonate with the
world today. Loney: Well, we have talked so much about how brand
is so important for companies
00:00:58
these days. So how does this
impact the decision process around advertising for firms,
especially around this time of
00:01:06
the year, when politics are at
the forefront of so many conversations? Pleasure to be
joined by Americus Reed, Wharton,
00:01:13
Marketing Professor here in our
studio. Great to see you again. - It's great to be back, my
00:01:17
friend. - I know that companies
don't like to directly advertise with a politician or such, but
obviously there are elements
00:01:28
that impact them. How do at
least companies think about their advertising at this time
of the year, when you have so
00:01:35
much conversation about
politics? - It's a great question, Dan. I think
that, from my point of view, the
00:01:40
framework is this. The framework
says, why are we doing this if we're going to dip our toe into
trying to make a connection with
00:01:48
political affiliation of some
sort? And the idea is that, you know, when competition gets very
stiff, you have to have some
00:01:55
other way to differentiate
yourself, because you don't want to have a race to who's going to
have the best set of features,
00:02:00
because that's a question of
who's got the better mouse trap. Sometimes what you want to do
is, I'm going to put a little
00:02:06
bit of additional stuff here
that signals value, signals something that I think is more
identity based, and politics has
00:02:13
a really nice component that
allows that sort of connection. So the decision calculus is to
say, I'm -- I have to be willing to
00:02:21
lose some people to the extent
that I'm making a strong, full throated connection with any
kind of political party or
00:02:27
political ideology. But the
thought is that I may lose some, but the people I gain are going
to be so much more loyal, net
00:02:36
net, because they're going to be
connecting with me on something that's inside. And so that
connection will create, in
00:02:43
theory, a much deeper sense of
loyalty. - But there are -- it feels like
there are a lot of companies and
00:02:49
CEOs and executives that are
almost fearful of that right now. They don't want to offend
anybody. They would rather stay
00:02:55
back, let the politics play out,
and at least just be there to serve the consumer, you know, in
whatever fashion that they need
00:03:05
to. -Yeah, and it's an
interesting point, Dan. You're 100 percent correct. There are at least
three reactions that we notice
00:03:12
in the marketplace. One is to
say nothing and say, listen, to your point, I'm not going to get
involved in any of this. Another
00:03:18
is to say, kind of an approach
that is to elevate. So, for example, you might -- you might
see a brand, product, service or
00:03:25
organization come out and say,
"Hey, it's important to vote," without saying anything
else beyond that. Then you have
00:03:31
the companies that are willing
to come out and say, "Listen, this is our response. We are
aligning with a particular
00:03:37
political ideological viewpoint
and/or political party, and here's why." And I think it's
that third category that's
00:03:44
really risky, but potentially
has a huge payoff. - But if you go that route, seemingly,
and you can see this out there
00:03:51
with certain companies, they
have gotten to a point where they have no fear of making that
alignment, because they believe
00:03:58
it is -- as you said before, it is
a core connection that they want to make with that segment of the
population. - That's
00:04:05
correct. And so marketing is
about segmentation, targeting, positioning, messaging. And so
like anything else, there are
00:04:11
very few instances where you see
a mass market approach. You see tailoring. So it fits in well
with the ideology of marketing
00:04:19
itself. But I do agree. I think
that companies that say we're going to go in, and that's the
rule, Dan, if you're going to do
00:04:26
it, you got to go all in.
You got to go all in. And so -- and you got to live and die by
whatever -- whatever the
00:04:31
consequences of doing that is.
And so, but there is this huge payoff that you can observe with
respect to this long term
00:04:40
loyalty, and just the idea that,
you know what, we're going to take a stand as a company.
- What's the
00:04:44
challenge, then, in making that
final determination of which way to go, especially if you're a
publicly traded company, you've got
00:04:51
to answer to a board of
directors as well. 100 percent. Multiple audiences,
multiple constituencies. I think
00:04:57
that it has to start from the
top down. And the c-suite basically has to make this
decision of, these are our
00:05:03
value -- these are our values, and
we're going to live and die by these values. And I think that
there are certain companies
00:05:09
that -- and the other thing that's a
really important point here, Dan, that you made me just think
of just now, it's also
00:05:15
related to your footprint. Like,
what is your history in this space? So if you were -- if you
were Ben and Jerry's and you've
00:05:21
always sort of been dipping your
toe in making some kind of political or ideological
statement, that's fine. You've
00:05:28
got the track record. But for
those that are making that decision to do this for the
first time, they better think
00:05:33
very carefully about that, and
they better be ready for backlash. - Right, and the other component is, is
that not only do you have people
00:05:40
out there who will give you a
backlash for making a statement like that, but you also have the
social component, which we know
00:05:47
is out there right now. If you
don't make a statement, people will give you the backlash. So
there's a little bit of, you
00:05:52
can't win whichever way you go.
- That's 100 percent correct. It's -- it's very,
very tricky. It's, you're
00:05:58
walking the razor's edge here.
And I think you're 100 percent correct, Dan. I think the big question
that is inherent in this comment
00:06:05
you just made is the question
of, when social media starts reacting, when do you panic?
When do you -- and that's my point.
00:06:14
It's like you've got to say,
we're in now, for better or for worse. I think the worst thing
you can do is to go into a
00:06:20
particular political ideological
viewpoint, let's say DEI, let's say, you know, affiliation with
voters rights or reproductive
00:06:27
rights or something, some
particular issue that has nothing to do with your business
model. And then you have to walk
00:06:32
it back, because social media is
putting you on blast and basically yelling at you, and
there's a lot of digital outrage
00:06:38
going on. So the question is,
don't panic. You have to go back to your values. This is what we
stand for. This is what we do.
00:06:45
And you live and die by that.
- And that's the component that,
realistically, you go back 15, 20
00:06:50
years, that was not in the
formula that a lot of these companies had to deal with. And
now this is the adjustment that
00:06:57
all these firms are having to
make right now. - 100 percent. And I think the other important
point that you're pointing to,
00:07:01
which is, why are we seeing more
and more of this? One reason, Dan, is that the leaders of these
companies, the c-suite, who are
00:07:10
these people, and where are they
coming from? Where they're younger people who are evolving
as business leaders in the
00:07:17
context of thinking about the
social impact, the corporate social responsibility, the moral
ethics of what it is that
00:07:25
they're doing. And so they're
walking into the c-suite with these values salient to them,
because they've been thinking
00:07:31
about these things. What do I
stand for? What's my legacy? And all of these things. And those
things intrude in the decision
00:07:37
making in the boardroom that
affects how these brands, product, services and
organizations end up messaging
00:07:43
around these political and
ideological viewpoints. - So I started this all off by
talking and using the word brand,
00:07:48
which has seemingly been, I
think, something that so many companies have focused more on
in the last several years. So
00:07:57
how much then does that thought
process, a brand, have to factor in when you think about a
company and the success that it
00:08:07
has or the potential failure
that it has, in knowing that the brand could have a significant
impact? - Yeah,
00:08:13
that's a great point. I think
what's going on here is that there has been an explicit
decision to say that we're going
00:08:19
to define our brand, at least in
some part, vis a vis these issues. And so if you're a
Levi's, for example, you might
00:08:27
say, "Listen, you know,
we're going to take a stand on some issue, let's say. Has
nothing to do with how we make
00:08:34
the jeans, but someone's made
the decision that we want to make that part of our brand."
Just like Ben and Jerry's, it's
00:08:39
like, they -- there's
milk, cream and sugar in there, but there's also this other
stuff that they're putting in
00:08:45
there. And the whole idea
is that, if -- you know, they're basically philanthropists and
social activists who make ice
00:08:52
cream. So they're like, "Listen,
if you're eating my ice cream, you're affirming some part of
who you are." And that's a very
00:08:58
powerful aspect, because if
competitors show up and say, "Hey, I've got a better tasting
ice cream or it's cheaper," you
00:09:04
will, as a loyalist to Ben and
Jerry's, will say, "No, thank you, because you're asking me to
change who I am and not just
00:09:10
switch a product." Does that make
sense? So that's part of the brand in some -- in some respects.
- So
00:09:15
there has been probably an
element of this attached to companies for a long period of
time. It just hasn't received
00:09:23
the publicity on that
it has in the -- like certainly, corporations give to
different charities, different
00:09:30
organizations, have connections.
Obviously, we know that, you know, a variety of different
executives give donations to
00:09:36
politicians all the time.
But now, going back to something we said before, all of
this is kind of laid out on the
00:09:43
table, and there is no kind of,
you know, under the radar, you know, scenario to this.
00:09:49
- That's 100 percent. I love that point,
Dan, because it points to something that's changed that is
affecting all of this, and
00:09:54
that's the idea, you said it,
social media allows every single individual to be a point of
contact in real time for brands,
00:10:03
products, and services and
organizations. And so they're out there documenting and
interacting with brands, co-
00:10:09
creating brands, and putting
information out there in social media. And so from that point of
view, they're involved in this
00:10:16
entire process, and they're
helping shape that brand. And so they're out there, they can put
you on blast in a half a second.
00:10:23
So, you know, if you're a Bud
Light or a Target, or you're making these kinds of decisions,
you have to understand that this
00:10:29
is the -- this is the consequence
of this, because consumers are part of this conversation now.
And so, you know, that's an
00:10:34
important sort of control you
have to give up as a brand if you're going to dip your toe
into these kinds of things. - So
00:10:39
the Bud Light case, obviously, I think, is
kind of an interesting one, because I don't think many
people were expecting that type
00:10:48
of a campaign from a company
like Bud Light, but they also probably weren't expecting to
see the reaction there was. And
00:10:55
so then the interesting thing
becomes the next step by the company of how they earn that
trust back with the general
00:11:04
public, not just a segment of
the population. - That's exactly right, and that's really
hard, Dan, because again, the
00:11:10
idea of backtracking, walking
back, and basically saying -- almost saying, "Hey, I made a
mistake doing this," is much worse
00:11:17
than just going full throated
and saying, like, "This is what we stand for.And, you know,
take it or leave it." There's a
00:11:23
kind of consistency argument
there. And so, you know, I think the big issue is that, like, how
do you come back from these
00:11:29
sorts of things if they blow up
in your face? And it's really hard, because what we often
observe is that you make it
00:11:36
worse for both sides. So you end
up making both sides not like you, because you're trying to
serve two masters, and that's a
00:11:42
mistake. - We're talking with Wharton Marketing
Professor Americus Reed. So in
00:11:46
your conversations with
students then in the last few years, what are they telling you
about how they view a lot of
00:11:54
this? Because they are the
decision makers, 10, 20, 30 years down the road. - I love that question, Dan. They
are the decision makers. They
00:12:03
also are going to be the people
in the c-suite, to your point, and they're thinking about this.
They tell me all the time.
00:12:09
That's one big difference. I've
been at the Wharton School for 25 years. When I first started
here, there was very little
00:12:14
discussion of legacy impact. It
was all about, let's go to Wall Street and make -- Wall Street and
make a lot of money. Now
00:12:20
it's very different. It's like,
what's my -- what is my moral? What am I going to do? What are my
values? What's my why, to use
00:12:25
Simon Sinekian terms. And then
thinking all about this kind of stuff. So I'm seeing that as
well. I'm also seeing a lot of
00:12:32
students tell me, Dan, that, you
know, if it comes down to two choices, and they're pretty much
the same, that this could be the
00:12:39
difference between -- between
choosing a particular product over another. Because it's sort
of like, hey, there's an
00:12:45
ideological connection here.
This represents my values. I can reaffirm my values. So I'm going
to choose this thing over this
00:12:50
other this other thing that's quite
similar. - And so then that I would assume
plays out in kind of the
00:12:54
political realm as well, which I
guess, to a degree, goes into that tribalism we see play out
in politics right now. - It's
00:13:01
100 percent correct. And I think that
it's -- the political piece is very difficult, to your point, Dan,
because you're literally
00:13:07
making decision of, if you're
going to go into this, you're basically saying, I'm
willing to alienate half the
00:13:13
population in the United States.
And so you better be -- you better have done that analysis
to say, you know your customer
00:13:19
well enough, and this is
something that's pretty important to them in terms of
expressing these values and so
00:13:24
on. I'm going to go back quickly to
your point that you said about the notion that consumers are
involved in this process and
00:13:29
there's open transparency.
This is huge. And I love that point, Dan, because consumers
now can -- there are websites where
00:13:36
you can go and look at all these
companies. Where are they making their donations? So -- right? So
you want to -- it's all out there.
00:13:43
So if you're going to do this,
you have to be super consistent with respect to not only your
history, but like, where's your
00:13:48
money going, all of these
resources that are getting deployed potentially to these
different political PACs and/or,
00:13:54
you know, donation
opportunities. All that's going to be observable by the
consumer. And the worst thing
00:13:59
that you can do is to be caught
where you are, --where it's inferred that you're basically
doing this as a kind of a cash
00:14:06
grab, just rather than something
that's authentic. - So then being upfront
about your beliefs, and the CEO's
00:14:17
beliefs, and the c-suite's beliefs,
that does have a connection to how the company is perceived?
- 100 percent,
00:14:24
100 percent. Here's the other thing
that's interesting, to your point, Dan, and there's some
early research on this that
00:14:30
shows that if you don't say
anything, compared to taking a stance on something, the other
side who's mad at you for taking
00:14:38
a stance actually respects you a
little bit more than not having said anything. Because it's
almost like, you know, you're at
00:14:45
least -- you're allowing me to make
a decision about, do I want to affiliate and align with you or
not. So you actually get
00:14:51
a little bit of credit for doing
this if that makes sense. - And to a degree, at least
you're having the conversation
00:14:57
about it. You're saying, here's
what I believe in, here's why I believe in it, and this is why.
Let's have a conversation about
00:15:05
it, which is something I think a
lot of people would say we don't have enough of in today's world.
00:15:09
- That's 100 percent correct. And I
think, you know, you're pointing to something that's important,
which has made -- this is why it's
00:15:15
such a hornet's nest, because I
think the current political environment is so
tribalistically stuck in an echo
00:15:22
chamber and, like, everyone's mad
at each other, everyone's outraged. It's hard to have
these conversations on policy
00:15:27
and discussions and debates,
because it's immediate -- the tribe. If you're on that side,
you're evil. If you're in my
00:15:32
group, we love you. And so, you know --
and everything is interpreted through that lens. So this is
tricky from a branding and
00:15:39
messaging point of view, because
you're stepping into that, and if you're going to do that, you
better understand what the
00:15:44
consequences are. - Thanks for tuning in to part one
of our special two episode series with Wharton Professor
Americus Reed on branding and
00:15:51
elections. We hope you found the
discussion insightful and engaging. Don't forget to join
us next week for part two, where
00:15:58
we'll dive in deeper. Until
then, stay curious and keep learning. See you in the next
episode. Thank you for listening
00:16:06
to the Ripple Effect. We hope
you found this episode informative and engaging. Don't
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00:16:12
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