NEWS AND INSIGHTS

Last month, I wrote a piece for World Trademark Review on polarization and its implications for brand managers and corporate leaders. I republished the first half here, Polarization and Public Relations. The second half is below.

The full column examines four truths to consider when assessing one’s reputation:

• The median consumer is more likely to approach a controversy with preconceptions about its main actors.

• It is more challenging than ever to persuade someone to change their mind.

• Online reinforcement of one’s worldview often leads to unchallenged groupthink offline.

• The nature of debate – and its implications for corporate reputation – is as unpredictable as ever.

Points 2-4 are addressed below.

Note: WTR is a British publication, so they swapped out all of my z’s for s’s and added random u’s to some of my words. I apologize for the haughtiness.

###

Culturally educated consumers

Consumers of goods and services are increasingly consumers of biased news. That is not the standard indictment of the mainstream media and certainly not an endorsement of the overused and often offensive slur of so-called ‘fake news’ that is thrown at reporters, editors and producers of all shapes and sizes. I mean that, more than ever, that news is delivered with a layer of commentary from friends, family and influencers online.

News – whether about business, politics, entertainment, sports or even the weather – comes in the form of a Facebook post or a tweet, coupled with a value judgment from the individual posting it. Chelsea Football Club did not just win last weekend, they won while cloaked in the shame of their ousted Russian oligarch owner. Disney did not simply oppose a law that the company viewed as economically detrimental to its home state, it did so because it is run by race-baiting socialists. It is not just going to be hot and humid this weekend, the weather is the fault of humans because of our fossil fuel consumption. And so it goes.

It is impossible for the average consumer to independently research the facts and circumstances surrounding every news item or controversy they encounter. In the past, we relied on impartial news outlets to tell us the facts, and then we would make our own decision about whether we liked or disliked what we were hearing. This simple process would drive opinion formation, voting habits, buying choices, brand loyalty or disloyalty and our general approach to right and wrong.

Now, news increasingly comes with those value judgments attached, validated by people in our online networks. We tend to follow and trust those influencers who we feel have earned our attention. Some of these are self-selected – the people we choose to follow on Twitter because they have proven their opinions and analysis to be reasonable and thoughtful. Others are algorithm-selected – those inserted into our online feeds based on AI-driven calculations about what we may engage with.

And our opinions are not just driven by those we like. Most people follow others they disagree with but respect, as well as people they despise. The key takeaway? The very appearance of your brand in the news is likely to engender an immediate reaction based on how it is presented to the consumer, rather than the actual news value of the content.

The erosion of trust and the challenge of persuasion

In politics, there is an old axiom that applies to reputation now more than ever: if you are explaining, you are losing.

Add to this the somewhat contrarian observation I made in this space six years ago, regarding the crisis PR trope that begs communicators to get ahead of the story: “Eager to tell your side of the story? Understand that sometimes your side of the story is neither compelling nor helpful.”

Anyone that cares even a little about their own reputation – individual, corporation, institution and so on – tends to believe that they are doing the right things for the right reasons. There is an overwhelming desire to tell that story, in the misguided belief that you win arguments with facts, not emotion.

A certain prominent US conservative commentator has coined a popular phrase on the right: “Facts don’t care about your feelings.” I could not disagree more. In the current media and cultural landscape, feelings are everything. And the gatekeepers or validators of those feelings – again, the influencers and outlets of choice that exist in Ansari’s algorithm – provide instant analysis of a controversy or scandal and signal to their audiences how best to feel about it.

Reactions to important news used to cut down familiar, binary ideological breakdowns. An individual either loved capitalism or hated fat cat CEOs, for example. A messy unionisation drive at Amazon, had it taken place in the 1990s, would have been adjudicated in the public conscious in a predictable way. Audience segmentation and targeted messaging would have been fairly straightforward.

Today, the diagnosis of public reaction to a contentious labour dispute is much more difficult. Someone who loves capitalism may hate the tech sector for its perceived wokeness. Someone who loves unions may loathe attacks on a progressive company that provides same-day contactless delivery. Where there were two prominent schools of thought on a given company, CEO or sector, today there may be dozens of ways to segment your audience.

Then there is the additional challenge of persuading multiple publics that respond to different incentives and are almost instantly entrenched in a position, based on how information is presented to them. Analysing audiences, predicting how they will react to information and delivering relevant, persuasive information to them is what I do for a living; it has never been more difficult to do so efficiently and effectively.

Online communities and offline behaviour

Brand managers are not immune to the algorithmic groupthink we see online. I would write this five times in a row if I thought my editor would allow it. It is an extremely important, albeit often uncomfortable, truth.

I do not think anyone arguing in good faith can deny that the push for greater diversity at the highest levels of corporate America is a net positive for humanity. We have unlocked untold talent and innovation by broadening the universe of talent available to C-suites, as well as middle management and rank and file employees. Brands are able to better understand their customers, care for their employees and address long-ignored societal challenges as a result.

Diversity of thought may have suffered, though. As a thought exercise, I often challenge corporate communicators or boards of directors that I counsel to offer their opinions on controversies of the day. Who are the good guys and bad guys? What caused this to happen? What is the proper remedy? What is the most efficient pathway to reputational restoration?

More and more often, this tends to devolve into a competition between executives over who can be the most strident in their argument that more diversity, equity, inclusion, transparency, sustainability and community are needed. They talk about leaning into their corporate values to get ahead of the story.

I am not opposed to any of the buzzwords listed above. However, I am opposed to their ubiquity in corporate America and the ease with which they are thrown about, often with little follow through. More importantly, I am concerned that while the majority of the public agrees on a broad level with diversity and inclusion as concepts, they reject preachy implications that certain people are not committed enough to the cause. That could be half of your potential customer base, with hardened opinions and instant negative reactions to your reputation management work.

I am worried about what this means about my clients’ internal communications efforts; are they assuming that the line workers and hourly employees on their payroll agree with certain diversity, equity and inclusion (DEI) talking points that begin on Twitter and in the pages of The Atlantic, and find their way to regular inclusion trainings happening across the Fortune 500 today?

I am also concerned that the further brands stray from selling their goods and services on their merits, rather than on the reputation of the company and its leaders, the more they risk alienating consumers who care about underlying drivers of product value including reliability, efficacy and safety.

Many who have climbed the highest rungs of the corporate ladder adopt these soft drivers of reputation because they truly believe in them. That is great; I am for an all-of-the-above approach to determining the components of reputation and how to maximise the value of each. But, more and more, we see those who value the other components take the path of least resistance and go all in on what is uncharitably described as wokeness. I do not believe in the “go woke, go broke” trope but I am concerned that brand managers are neglecting everything else to be on the cutting edge of new DEI fads, which I think is a mistake.

C-suites need to understand that they have their own self-reinforcing biases because of their own algorithms and the communities they have cultivated. There is nothing wrong with that, but there are massive blind spots as a result. As Michael Jordan famously said: “Republicans buy sneakers too.”

Backlash is unpredictable

At the time of writing, Disney is on the back end of a massive multi-week controversy over its opposition to a new law in Florida that restricts sex education in schools and imposes new liabilities on teachers who comply. I do not live in Florida and am uninterested in litigating the merits of the law in this space. But the components of the reputational crisis largely chime with what I describe throughout this piece.

Disney made a series of strategic errors, in my view. First, the company publicly stated it would not take a position on the legislation. Then quickly buckled under pressure from activists inside and outside the company, who described Disney’s lack of opinion on the matter as an implicit endorsement of anti-LGBT policies.

Then, a series of videos featuring Disney employees calling for more LGBT representation in its children’s films was leaked by a conservative outfit. Opinions on both sides of the issue were instantly hardened, politicians both for and against became vocal and Disney found itself to be the key player in the most contentious piece of legislation passed in a US statehouse in 2022.

The ultimate outcome: not only did the legislation pass, Florida lawmakers came after Disney hard. The company lost a special taxing district that had allowed it to operate a quasi-government entity in the state for decades. One-third of the business’s market capitalisation vanished as a result.

Setting aside the merits or evils of the legislation in question, there is a lesson here. Wading into public controversies that are outside a company’s core mission is extremely risky. Usually, an action like this is a non-story or even a net reputational benefit. We have counselled clients for years about the possible downsides of getting out over their skis on cultural issues. With Disney, we finally have a tangible example of what can go wrong.

Those responsible for growing brand value are, by their very nature, true believers, in the brand and its power to create value for society. They often view themselves not as agents of profits but agents of progress and change. In my view, it is a very healthy way to position oneself in the world. But when you seek to communicate your values, remember that not everyone shares them, either outside the company or within. And if a controversy unpredictably catches fire, the massive destruction of shareholder value is absolutely on the table.

Takeaways for brand managers

Given that opinions are formed instantly, persuasion is more difficult than ever, implicit corporate bias obscures accurate audience segmentation and backlash is impossible to predict, how are we supposed to deal with controversy and crisis? Should brands focus solely on the audiences that reflect their values, and ignore all others? Is creating separate Nike brands –  one for liberals and one for conservatives, the answer?

One tangible step that companies can take is to silo DEI from marketing and communications. DEI should be an internal function that ensures the workplace is safe, welcoming and comfortable for employees of all backgrounds. While companies must absolutely take into account the views and beliefs of all employees when creating DEI programmes, these initiatives should serve the workforce, not seek to influence consumers.

That is not to say that brands should not lean into cultural change as part of their ongoing marketing and reputation management efforts. But look before you leap. And I mean, really look. Market research and survey work are key – dig deep into audience attitudes on these issues. You will probably be surprised by what you learn.

And, finally, focus on the product. Communicate its value. That is what consumers are here for, in the end. 

###