The days of products being purchased exclusively for their utility are over. Modern consumers look beyond goods and services to the brands and companies behind them, seeking to understand their values. Communicating values has rightly become a major part of branding – as the rainbow flags, LGTBQ content and community engagement during pride month by major brands can attest. But while there is great value in values, there is great reputational danger in being perceived as inauthentic. If you position yourself as an ally in June, you had better be an ally in February – or risk the consequences.

The spring and summer of 2023 found two large companies in hot water around well-intentioned public actions related to Pride Month. ChangeMakers’ reputation experts examined these cases and the data behind them to determine how these initiatives could have been executed differently to ensure less reputational risk.

Bud Light & Dylan Mulvaney

In April 2023 Bud Light launched an influencer campaign partnership with Dylan Mulvaney, a transgender TikTok star. A limited amount of beer cans with Dylan’s image were distributed and though the campaign was limited in scope, designed to speak to Dylan’s social following, it was picked up by national media, and a massive controversy ensued.

Bud Light’s sales plummeted more than 25%, and it was knocked from its thrown as the best selling beer in US. The backlash to the partnership was harsh, and many conservatives pledged to boycott. But this was only half of the brand’s problems. Bud Light’s CEO issued only vague statements in response, neither wholly apologizing nor concretely standing by the partnership. This led to a second round of backlash, this time from liberals angry that Bud Light seemed to cave to pressure. Dylan herself put it best: “For a company to hire a trans person and then not publicly stand by them is worse than not hiring a trans person at all because it gives your customers and others permissions to be as transphobic and hateful as they want.”

Bud Light managed to offend social conservatives and then failed to support Mulvaney individually, as well as the broader transgender community leading the Human Rights Campaign (HRC) to revoke Bud Light’s “Best Places to Work” distinction.

The impact to the brand was devastating because the gulf between values and strategy was laid bare.

Target and Tuck Friendly Bathing Suits

That year, retail giant Target added new merchandise for Pride month, including tuck-friendly bathing suits for transgender women. A public backlash ensued and the retailer quickly removed the product. In response to the flurry of criticism, Target’s CEO Brian Cornell defended the merchandise, saying selling them was “the right thing for society.” But many noticed that the product was still removed from most stores, again sparking and additional round of backlash and criticism as supporters questioned whether the company’s commitment was truly authentic. If it was the right thing for society, why were they removed? If removal meant that Target was wrong, why did the do it in the first place?

Target lost more than $10B in market capitalization in the span of 10 days, with shares of stock plummeting to their lowest levels in more than three years.

Two Big Misses

Together, Target and Bud Light lost an estimated $28B in market capitalization during Pride month 2023 alone. Though the stock and reputation did eventually rebound, the sales and reputational losses were felt deeply at the company. It’s clear that neither Bud Light nor Target had a sophisticated communications strategy in place when planning for these progressive and inclusive initiatives, as well as campaigns. Their ham-fisted approaches left them unprepared for a crisis they should have seen coming in our politically and socially divisive society. And worst of all, it alienated shareholders and stakeholders alike.

So, does that mean companies should abandon their efforts to promote and live their values entirely, and never fight for social change? No. It’s still vitally important for companies to have, and deliver on, their values. What is important though, is that it remains authentic.

Two Upheld Promises.

Two companies in particular – on competing ends of the political spectrum – execute on their promises seamlessly, leaving consumers with full authority to buy what they are selling. Or not.

Chick-fil-A, widely known for its conservative and Christian values, has consistently and proudly expressed its beliefs throughout its brand identity. Their purpose is clear for all to see: “To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come into contact with Chick-fil-A.” Despite facing controversy and boycotts through the years – primarily around which charitable organizations the company gives to— Chick-fil-A has remained steadfast in its position while growing exponentially. Owning their values and staying true to company beliefs have been crucial to continued success, even if it means facing challenges from opposing viewpoints along the way.

Similarly, in 2022 the beloved Ben & Jerry’s brand announced that their ice cream would no longer be sold in occupied Palestinian territories, citing concerns about violations of human rights and international law which went against their stated values and commitments to social justice. This decision sparked both support and criticism including concerns for economic impacts to Palestinians, double standards for not stopping sales elsewhere, and belief that it was too politically motivated. A legal battle ultimately changed the companies stance, but Ben & Jerry’s ultimately stayed true to their values and remained clear and consistent on their stance, maintaining their strong and loyal customer base.

Value Authenticity.

Chick-fil-A and Ben & Jerry’s have an inherent advantage — the positions they take are nothing new to their consumers. It’s who they’ve always been. Many liberals eat at Chick-fil-A and conservatives buy Ben & Jerry’s despite disagreeing with certain aspects of their political views. Why? Because it’s not a surprise. In many cases, it’s also not “in your face” as the central focus of national marketing campaigns. It’s truly authentic. And if these organizations are questioned, they respond quickly with statements and actions that lean into their corporate values. Consumers respect companies who are true to themselves and do not appear to be cashing in on a particular social or political movement.

Bud Light, on the other hand, has generally strayed from seemingly political issues because they were “above” the noise, as a “beer for everyone.” Target is similar in its appeal to families who want reliable clothes and products at a reasonable price point. But instead of playing into their strengths, both brands “jumped the shark” with firm positions that forced their customers to take a side on one of the most divisive issues in society today. To make matters worse, their subsequent backtracks jeopardized the support of the very audience they were trying to reach and respect.

Our team at ChangeMakers counsels corporate clients who want to express their values in a way that supports their business goals, whether that means expanding market share, increasing employee engagement, building customer loyalty, or advancing shareholder interests. The reality is, no matter what a national or global survey says is “best practice,” every company is different.

There is not one-size-fits all approach.  That’s why we typically adhere to the following core principles when advising our clients:

• Know your corporate values. It seems simple, but executives in marketing departments and executives in finance don’t always share the same priorities. This is especially true considering the left-leaning groupthink that is prevalent in marketing. What are the values that bond your C-Suite, employees, and customers together? Is it truly authentic or is it forced? If it’s diversity and inclusivity — that’s terrific. But the resulting tactics to express that must resonate with all stakeholders in a way that strengthens market share and advances the company’s core goals.
• Look in a mirror first. Diversity, equity and inclusivity work starts inside your organization. A corporation and its employees can be genuine allies without the public fanfare. Often more effectively than a business that hangs a rainbow flag June 1 and takes it down June 30. Will your actions be viewed as performative by your employees, their families and those you are saying you stand by?
• Know your customers. Again, this may seem simple, but the backlash in the Bud Light and Target example was predictable. ChangeMakers proprietary Data Intelligence software does just that: analyzes customer, industry and other data that helps form a successful marketing and communications strategy that still achieves corporate goals (in the case for Target and Bud Light, supporting the transgender community). Here are two examples:
  • Online audiences were resonating with content that suggested Bud Light is for “manly” men. A TikTok with over 25K likes from May 2022 that continues to circulate today shares two friends singing a song about their preference for Bud Light over seltzers. To the tune of Ice Ice Baby by Vanilla Ice they sing: Don’t be a pansy…. Sh*t ain’t manly…Bud Light, Baby. These lyrics coupled with the high-level engagement shows a broad audience of users expecting Bud Light to be enjoyed by someone who is “manly”. The high engagement should have been a red flag for Bud Light—in their current landscape and based on their audience’s current mindset—a transgender female at the forefront of an online campaign would come as a surprise to these users.
  • Red states were driving Bud Light related activity. Demographics of those discussing Bud Light before the Mulvaney partnership show Texas City/Texas as the leading region, accounting for more than 10% of activity the 12 months prior. During this time, Texas lawmakers passed bills banning puberty blockers and hormone therapy for transgender kids, restricted college sports teams trans athletes can join, and expanded the definition of sexual conduct in a way that could include drag performances. Users from Florida, a state passing similar types of legislation, accounted for the fourth largest share of Bud Light mentions, approximately 7%. 
  • Combined, these two conservative-leaning states drove almost a fifth of the worldwide Bud Light activity in the past year. This should have been another consideration—are they comfortable sparking criticism from a notable portion of their online supporters by partnering at this time, and in this way, with Mulvaney?
• Doing nothing is an option. Contrary to many marketing and communications professionals who tend to always recommend action to justify a high retainer, sometimes doing nothing – or doing it with a lighter touch – is the most strategic option. Warren Buffett’s famous quote applies here: “Rule number one is to never lose money. Rule number two is never forget rule number one.” While this is easier said than done in investing, it’s also easily applicable in communications. Always examine the downside before becoming too enchanted with the potential upside. Reputation now accounts for roughly 70% of corporate value. Nothing is more important than protecting it.

ChangeMakers works diligently to understand our clients’ corporate goals and then help achieve those objectives through the most sophisticated data, strategy and tactical execution possible. But above all, we help foster authenticity as the best way to protect reputations and grow your brand and market.

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Let’s get REAL is a series where ChangeMakers provides quick and actionable insights for protecting your reputation in a rapidly-evolving risk landscape. 

We’ll begin by evaluating a reputational RISK for businesses, exemplified through a news EVENT. Then we will provide an ANALYSIS of the reputational impact, citing findings from ChangeMakers Data Intelligence team and close with LESSONS (together, R.E.A.L.) that leaders and organizations should consider. 

The pandemic caused a boom in at-home services – from streaming to food delivery to exercise equipment. Peloton, the machine and the company, may be the best exemplification of this phenomenon. It’s meteoric rise and fall has captivated our team which continually looks to it as a case study in self-inflicted wounds and reputational harm.

RISK

It should go without saying that consumer and public safety must be the top priority for companies, especially when safety is threatened. When the unimaginable happens, companies need to react and do so quickly, expressing genuine sympathy and regret, and putting safety above all else. 

Companies who fail to apologize, who refuse to own it and fix it as an integral part of their strategies risk losing trust, reputation and in the end, market share. 

Let’s look at how Peloton’s failure to do just that has impacted their ability to fully recover years after the recall of their treadmill. 

Event

After a pandemic boom when many of us hopped online to order exercise equipment, including a few of our team members, reports were emerging of injuries related to the Peloton treadmill. This culminated in March 2021, with the tragic death of a young child. 

On April 17, the Consumer Protection Safety Commission (CPSC), issued a safety warning and advised consumers to stop using the treadmill, sharing a disturbing video of a child being trapped under the belt. Peloton’s reaction was swift and aggressive, calling the warning ‘inaccurate and misleading’. There was no humility, self-reflection or nuance.

So, unsurprisingly, the outrage and the pressure continued. Finally, on May 5, Peloton announced the recall of 125,000 treadmills along with an apology from CEO John Foley, admitting not only the risk of the product, but also their “mistake in our initial response to the Consumer Protection Safety Commission’s request that we recall the Tread+”. 

This continued Peloton’s painful 2021 which included a June security breach involving user information and the death of beloved TV character Big on HBO’s Sex in the City reboot. 

Analysis 

In the span of a few weeks, Peloton’s decisions completely altered the course of their brand’s reputation for years. From March to May, the volume of media coverage increased. Following their recall announcement, they saw an average of 1.3k daily mainstream hits, 85% higher than the 700 daily hit average they had in the first three months of the year. Needless to say, the coverage was overwhelmingly negative. 

In the 18 months after the initial recall notice, mainstream and social media continued to trend high, souring the digital environment for this cult-like brand. Conversation has been consistently negative, and the brand has struggled to get back to their values and ethos of combining health+ wellness with community. 

The impact has had a huge financial impact, with Peloton shares plummeting and never recovering. 

Lessons

• Own it up front and put safety first. Peloton came out swinging, but ultimately looked extremely defensive. They then had to do a public about-face with an apology from the CEO and a recall – and let almost two months elapse in between. By failing to address some of the key concerns of consumers and aspects of the recall in the earliest days, the company prolonged its problems and caused potentially irreparable reputational damage. 
• Don’t lash out at the regulators. Peloton came out looking heartless in response to the death of a child and the CPSC’s warnings. They were subsequently fined $19 Million for failing to report the hazard, reinforcing the impression that the CPSC was the body taking care of consumers and Peloton was the bad guy. 
• Stay true to your brand values. The response was a complete contradiction against Peloton’s brand – community focused and wellness-oriented. The contrast between the company’s values and how the recall was handled compounded reputational damage.
• Turning the tide gets harder over time. Peloton is now faced with a digital environment, largely driven by direct consumers, that has been mostly negative for a prolonged period of time. Even years later, righting that ship to reactive brand champions and advocates is still difficult.  
• The pile-on-factor can hurt your brand. Peloton was not ready for the next wave of negative events, putting itself in a deficit position for the other incidents it faced including the data breach and SITC, both of which would have been manageable issues if it were not for their response to the treadmill recall.
• Stay Humble Peloton was on such a meteoric rise due to their market-leading product that they fell into the trap of thinking they were the only game in town. Peloton faced these issues as newer, cheaper competitors were coming online, giving consumers choice yet they were still acting like they were the only option for interactive, live streamed fitness programs. Just as we’re seeing Netflix struggle with the same attitude, brands who feel impervious to losing equity will soon come face-to-face with the hard truth.

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Pharma ads aren’t trying to be clever – just compliant

My son’s hockey team was down 1-0, and the third period was drawing to a close. I sat in the stands watching anxiously, trying to focus on the game. However, I couldn’t help eavesdropping on the parents next to me talking about pharmaceutical advertising. As someone who’s worked in pharma advertising for years, my ears perked up.   

“What I don’t get is why they won’t tell us what the drug is for,” said the parent. “It’s all just, ‘See your doctor.’ I mean, What’s with the mystery?!” 

“Well, I’m sure there’s a good reason,” said the other parent, oblivious to the score. “Maybe they are trying to be clever.” 

I’m grateful there was a youth hockey game to distract me because every fibre of my being longed to leap out of my seat and shout at the top of my lungs: “We’re not being cute! We’re being compliant!” 

To those who aren’t well-versed in the complexity of pharmaceutical advertising in Canada, pharma ads can seem purposefully vague and mysterious. No mention of what the drug actually does and what condition it treats. Just a cryptic “talk to your doctor” at the end. What many people don’t understand is that in Canada, direct-to-consumer, or DTC, marketing is subject to Section C.01.044 of the Food and Drugs Act, which states that if advertising a prescription drug to the general public, only the brand name, the price and quantity of the medication can be referenced.  

It is quite literally against the law to mention the therapeutic use of a prescription drug in Canadian consumer advertising. Additionally, all pharmaceutical content undergoes rigorous internal reviews – by Medical, Regulatory and Legal Departments – and external evaluation by Ad Standards Canada. 

This makes marketing pharma very different from marketing other products; imagine trying to create an ad for paper towel where you can’t mention it cleans up spills! But, DTC is vital because there is a need for pharmaceutical communication and brand building. Canadians need encouragement to speak with healthcare professionals about disease care. Canadian patients want to be educated and empowered with the tools to engage their healthcare providers in dialogue about their health. Pharma ads are an important part of that education. 

For example, look at a common – and growing – disease like diabetes. According to Diabetes Canada, there are millions of Canadians living with prediabetes and type 2 diabetes (T2D) who don’t know it. T2D is one of the fastest growing diseases, with more than 60,000 new cases diagnosed annually. And the effects of T2D can be debilitating. Encouraging Canadians to speak with a healthcare professional, which is what advertising and communications do, is vital to our health.  

DTC that connects 

Because the stakes are high, research-based pharma would love to be more direct with Canadians. But strict regulations require a different approach. So how can pharma engage their audience in a compelling way while navigating the complexity of the regulations? Some best-practices our award-winning team at ChangeMakers has used: 

• Memorable creative – As with all advertising, you need content that gets noticed. And because the content will be light on details, there’s room for exciting creative. Compelling images, quirky dialogue or a catchy jingle can help grab attention. Also, develop an emotional connection to the viewer by depicting realistic scenarios that speak to shared experience. It all serves to create something memorable for consumers and helps encourage them to start a conversation in their physician’s office. 

• Surround sound and inclusivity – Don’t approach your audience from just one direction. You need an appropriate mix of out-of-home, print, digital, video and in-clinic mediums. Community and multicultural papers and websites are also great places to meet your audience. But don’t just translate copy for diverse audiences, develop new – culturally appropriate – creative and taglines for commonly spoken languages across Canada like Hindi, Italian, Mandarin, Punjabi and Spanish. 

• Earned media – When there’s compelling creative, business and marketing reporters will often take interest. Marketing trades, dailies and online news sites can profile the strategy and creative insights that drive DTC development. In fact, the restrictions on advertising often make stories about campaigns that much more compelling. Through compliant editorial engagement, you can support disease understanding with consumer health reporters who are interested in addressing complex conditions impacting Canadians.   

• Evaluate and course-correct as required – As with other campaigns, you must have a clear measurement plan to assess the success of your DTC initiatives. Stay flexible to allow for adjustments to the media buy to drive key performance indicators. 

Sometimes being in a restricted environment prompts innovative thinking. Some of the best campaigns I’ve worked on were pharma – not in spite of regulations, but because of them. Necessity is the mother of invention, and being hemmed in can bring out the best in creative and strategy. 

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We find ourselves in the teenage years of the dominant social media platforms – Facebook is 20 years old; Instagram is 14; and 18-year-old Twitter has angrily changed its name to X. As with any teenager, volatility is the norm. Recent years brought us the mountainous rise of TikTok, the faltering of Twitter, the birth of Threads, the rise and fall of the metaverse, Bill C-18, Apple’s app tracking transparency, and generative AI for all. There’s been a tremendous amount of change. 

Constant change and disruption are woven into the fabric of the digital landscape. So how do communicators and marketers navigate these rapid transformations of technology, norms, and tastes? There are really only two choices – radical change every quarter or create a long-term, stable social strategy. The former is going to consistently get you into trouble, the latter will set you up for success for years to come.  
 
Just because platforms are volatile doesn’t mean brands have to be. Amidst the chaos, the smart move is to create integrated strategies that bring together social, creative, media, and web teams to curate moments and create ownable content focused on measurable goals.  

If users don’t win, everyone loses  

We are in the midst of a fierce battle for attention. Consumer ability to jump toward shiny new platforms is forever shifting how social media properties operate. As communicators, we should be rooting for more success, not failure. A healthy, competitive social media ecosystem is better for all of us as it incentivizes communicators to create compelling messaging.   
 
Meta’s platforms, along with TikTok’s, increasingly suffer from a proliferation of out-of-touch and socially disconnected ads. A surge in poorly crafted – and often auto-generated messaging results in user disengagement; they post less frequently, see less of what they want, and before you know it, you’re in a platform death spiral. This cycle creates a worse environment for users, contributing to declining diversity, doom-scrolling and deteriorating mental health – which is a lousy environment for organizations to communicate in with users.    
 
No one should add to this deterioration. Marketers and communicators must be thoughtful about what we bring to the party. Audiences want to be seen and acknowledged, and they crave relevant content. Brands who lead with authenticity and demonstrate they understand the diversity of their customers’ values will continue to flourish.  

Paid and organic: BFFs  

Organic reach is dead. But that doesn’t mean organic efforts should be abandoned. It just means that paid campaigns and organic publishing shouldn’t operate in silos, and certainly not with distinct teams behind them. Organic and paid should be part of the same strategy conversation – with creative and media at the table. Paid and organic can complement each other strongly. Organic audiences are engaged supporters, driving content views, comments and organic website sessions. Organic content nurtures and informs those who know your brand or your perspective. These audiences are your most loyal, and insights from their actions and interests will inform your paid audience targeting, and your next round of creative content planning. On the flip side, within your best-performing social media content – that’s tested across millions of targeted impressions and dozens of AI-powered creative treatments – lies the spark for your next most engaging organic content.    

Bigger! Better! Fewer!  

Face it, very few are waiting for your organization’s next social media post. You should be communicating when you have something relevant to say. It’s more effective to focus your integrated social media efforts within your brand’s own schedule. Find your most meaningful and most impactful moments. Pick your times to speak, and break through with meaning, authenticity, and the weight of a focused ad spend to drive higher exposure for the moments that matter (to you and your audiences). Less is more!  
 
Bigger moments are more likely to align with strategic outcomes. And social media outcomes should be a means to an end, aligning with actual business objectives. Your organization is not powered by impressions and likes. Calibrate your conversions and turn on an ecosystem that is fine-tuned to nurture first-party customer data – data from which you can grow more meaningful relationships. Engaged audiences are more likely to connect through to your websites, your ecommerce shop, your CRM initiatives and your physical assets.    

Embrace platform formats  

The smartphone is the TV of today. And vertical video is its 22-minute sitcom. XDR screens and 5G networks have made social media feeds the perfect place for vertical video entertainment. Steve Jobs dreamed of an entertainment and communications device for the park bench, the bus and the bathroom. And now we have it, full-screen and lightning fast. Today, content carrying your message needs to resonate with your mobile viewer within just 2 seconds. This is why your creative and social media teams should integrate from the start, so that possibilities are never missed. Your content planning and production stream can be designed to incorporate native platform truths, from the start. The format is vertical, short, and quickly engaging – with branding and key message right up front. 
 
Because social media is so volatile, we as marketers need to be extra-focused on stability. When users, platforms and policies ebb and flow, integration and cohesion are our secret weapons. Increase the proximity between social, creative, media and web teams. Lead with authenticity. Embrace and test new platform formats. These are the efforts that enhance immediate success during these platform teen years and prepare us for weathering the expected volatility ahead.  

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