Unveiling 2023's Marketing Mishaps: Unraveling a Wider Predicament?
2023's marketing fails fuel industry concerns amidst contentious election year and rising backlash against wokeness
In 2023, purpose-driven marketing faced criticism as high-profile brands became embroiled in controversies that negatively affected sales and revenue. This has had a chilling effect on an industry already struggling with economic challenges. While research continues to support the benefits of purpose-driven marketing, these missteps may indicate a broader issue with weak brand-building.
CMOs, feeling pressure to deliver short-term results, have focused too heavily on performance media, resulting in less defined brand positioning and susceptibility to missteps. Additionally, the rise of generative artificial intelligence poses an existential threat to advertisers and agencies, as the lack of distinct brand identities may become a liability. Despite concerns about automation, purpose-driven marketing still requires the human touch to succeed due to its complexity and nuance.
"The need for purpose-driven marketing is more important than ever," noted Margot Acton, a managing partner specializing in brand strategy at Kantar. "Algorithms are targeting consumers, and brands that fail to stand out as important and meaningful in ways that resonate with the audience are at risk."
As the U.S. enters another heated election cycle and inflation remains high, brand-building will face challenges in a delicate environment, with purpose being one of the most vulnerable tactics amidst criticisms of "wokeness." Purpose has varying interpretations but is generally defined as the values a brand represents beyond profit, such as environmental protection or promoting diversity, equity, and inclusion.
This work needs to happen behind the scenes more often than being part of ad campaigns, which demonstrates how purpose should impact all areas of the C-suite, not just the CMO. The end of 2023 may prompt marketers to reflect on hastily adopting a purpose without long-term commitment, which has led to alienating consumers.
"There have been some important principles and ideas that have been overlooked," noted Rosemarie Ryan, co-founder and CEO of Co:Collective, a strategy consultancy that assists businesses with implementing purpose. "There has been some harm caused."
A perfect storm
Purpose-led marketing initiatives faced a multitude of challenges this year, resulting in a decrease in brand-building efforts. The lingering economic uncertainty has forced marketers to prioritize short-term performance metrics. Furthermore, CMOs are hesitant to support initiatives that may attract criticism, as the potential backlash could jeopardize their positions.
Brandon Rochon, the head of creative at independent ad agency Hothouse, stated that there is currently a lack of freedom to express oneself, reflected in the increased political divisions and heightened tensions heading into the 2024 election. The online space feels unsafe and uncivil, with a reported rise in hate speech on X, previously known as Twitter, due to relaxed moderation rules ordered by Elon Musk. Musk has faced criticism for his controversial statements and support for antisemitic conspiracy theories after acquiring the platform last year.
“When things blow up, the data gets buried. We look at the immediate reaction and not the longer-term implications.”
Rosemarie Ryan
Co-Founder and CEO, Co:Collective
Toxicity isn't confined to just X; disinformation is still spreading on social media, fueled by concerns about AI and deepfakes. At the same time, premium publishers are struggling, with some even closing due to a weakened advertising market. Marketers have been avoiding controversial topics like abortion and climate change in their campaigns under the pretext of brand safety, which has undermined genuine news and analysis.
Amidst this divided landscape, the concept of purpose has become a target, often associated with corporate skepticism and anti-woke movements. This has become a point of contention, as demonstrated by Bud Light's unexpected backlash from partnering with transgender influencer Dylan Mulvaney. The resulting boycotts caused the brand to lose its long-held status as America’s top-selling beer, and led to the resignation of Anheuser-Busch InBev's U.S. CMO, Benoit Garbe, in November. In Q3, Anheuser-Busch InBev saw a 13.5% decline in U.S. revenue, indicating that the repercussions continue to impact its business. As we enter 2024, advertisers face the fear of being caught off-guard in a similar manner for something that may appear harmless on the surface.
“Brands are becoming more aware of the dedication and strategic focus needed to achieve success,” Acton said. "There is a strong push against the traditional definition of success."
Even companies known for integrating purpose into their brand-building efforts are adapting to increasing investor pressure, changing consumer preferences, and public doubt. Unilever led the way in discussions about sustainability and body positivity in the consumer packaged goods sector. However, the company has recognized that its recent efforts have lacked direction and has suggested that not every brand in its extensive portfolio needs to focus on purpose, especially as it undergoes a leadership transition.
“Our dedication to our purpose is commendable, and it motivates numerous individuals to become part of and remain with Unilever, so we must always maintain it,” stated Unilever’s newly appointed CEO Hein Schumacher during a recent trading update. “However, I believe that we do not promote the value of purpose by trying to apply it to every single brand.”
Off-balance
Brand experts attribute the purpose backlash partially to marketers. Many rushed into the trend without proper preparation and have now gone silent in the tough times. Some also failed to adapt to changing times and continued to rely on outdated strategies from previous years. This has led to a significant pushback against traditional measures of success.
Margot Acton
As a managing partner overseeing brand strategy at Kantar, the lack of internal alignment on the meaning of purpose and who is responsible for purpose-led initiatives has been identified as a significant hurdle for the industry. While CMOs are often the public representatives of purpose, it is essential for all members of the C-suite to be actively involved to avoid communication breakdowns.
"Acton stated that poor execution makes it easy for others to criticize you. The real issue is not the determination to stand for something important, but the lack of proper execution."
In addition to communication errors, marketers have placed too much emphasis on performance media that does not differentiate brands, according to strategists. Retail media is currently a major focus for spending on consumer goods, mainly through sponsored product listings and display ads aimed at driving sales. Companies with a strong consumer image, like Apple or Nike, may find it easier to overcome controversies due to the strength of their brands and their creative appeal, according to Rochon of Hothouse. CMOs may need to shift their focus back to brand-building in order to address today's marketing challenges, whether tied to purpose or not.
According to Kantar's Acton, there is a limit to how much the lower funnel can be pushed. If companies focus solely on pushing sales, they risk neglecting the long-term value and identity of their brand, which can lead to higher costs in the long run. This creates a challenge for many marketers who are pressured to meet short-term goals within their organizations.
Widening ideological chasm
A wishy-washy approach to purpose and flagging brand-building have sparked strong reactions from political factions on both ends of the spectrum, with some individuals fueling the flames of outrage and others feeling disappointed by brands they once considered allies. Target, in particular, felt the sting of the latter, as it scaled back some of its Pride Month promotions last summer in an effort to address employee safety, a move that still managed to upset segments of the LGBTQ community. Feedback on the /r/Target subreddit, which includes employees, highlights a sense of betrayal, with numerous users perceiving the retailer as yielding to pressure and setting a troubling precedent.
It's possible that brands have underestimated the overall weariness of consumers and how that could impact their response to bold brand-building strategies, beyond the influence of activist groups. A recent Morning Consult survey found that less than one-third of U.S. adults (29%) of all ages believe that companies should leverage their power to address political and social issues. This percentage is higher than pre-pandemic levels but lower than those recorded in 2020, with significant variations between different demographic groups.
According to the Morning Consult report, "The U.S. public's interest in corporate involvement in political and cultural issues is similar to that during the 2020 presidential election. However, there is a growing divide based on age and ideology, with Gen Z adults, millennials, and Democrats on one side, and Gen Xers, baby boomers, and Republicans on the other."
Marketing discussions are likely to continue to include the concept of purpose, despite significant challenges. Morning Consult's findings on Gen Z and millennials illustrate this point: Forty-one percent of survey respondents from these groups support brand activism, an increase from 27% in 2019. Younger generations are particularly passionate about corporate involvement in addressing climate change, workplace diversity, and racial issues in the U.S., especially compared to their older counterparts.
In 2024, companies might find that addressing real issues with evidence and action resonates more with consumers, as distinguishing between genuine and artificial becomes more challenging. While the shouting matches of 2023 are likely to continue causing backlash, dialing back on purpose and long-term brand-building efforts could pose an existential risk, despite the appeal of short-term thinking.
Ryan mentioned that when situations escalate, important data tends to get overlooked. He emphasized the need to consider the long-term consequences in addition to the immediate reaction. He also noted that companies are increasingly being drawn into these discussions, and this trend is not expected to diminish.
