Choosing a birthday gift isn’t as straightforward as it perhaps once was - because as consumers we now often want to know where did this gift come from, how was it made, is it sustainable, where do the profits go, did its manufacture hurt the environment or other people, will using it hurt the birthday star? Many consumers now really care about the ethics behind the purchases they make, and subsequently the ethics of the brand behind them - and this extends way beyond the gift shop.
Forbes research shows 66% of consumers would spend more on a product from a sustainable brand. A clear example of a company’s ethics driving profits. The big bosses at large brands know this too - with 80% of senior executives recognising their future growth and success hinges on a values-driven mission according to Covestro. Brand purpose matters.
However, some leading brands are now being criticised by their investors for positioning their focus too heavily on brand purpose. Let’s take Unilever, which owns many popular household items - from the Domestos bleach you find under many a sink, to the much-loved Dove soap in bathrooms across the world, to cherished Wall’s ice cream in many a freezer. Unilever’s shareholders aren’t happy. Why? Criticism from leading shareholder Terry Smith, “who controls the £28.9bn Fundsmith Equity Fund” said that “the consumer goods conglomerate has lost touch with its core operations as a result of being ‘... obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business’”, as recently reported by The Drum.
The criticism didn’t end there, with Smith adding, “A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert – salads and sandwiches).” The Drum suggest Smith feels Unilver “has lost touch with its core operations” and with Smith being a lead investor his motivation must surely be that this focus will impact future profits.
You can understand why Unilever has made brand purpose a primary driver in its activity though, with Amy Williams reporting in AdWeek that, “in January 2020 Unilever confirmed it would be doubling down on its investment in the space”. One of the reasons why? “Unilever has repeatedly found that its purposeful brands outperform the rest of its portfolio”, according to Amy’s AdWeek article. It’s not just customers voting with their purchases choices either - top calibre employees are voting with their career choices as well. AdWeek goes on to explain “in 54 out of 75 markets, sustainability is listed as the number one reason why top talent decided to join the company.” The shareholders may not be happy - but in Unilver’s eyes the customers and employees seem to be.
Unilever’s keen focus on brand purpose, which the shareholders are implying is excessive, could arguably be apportioned to the media’s handling of the Institute of Practitioners in Advertising (IPA)’s recent research where IPA “compared and contrasted 47 brand purpose cases with 333 non-purpose cases over the same period” and found that “th[e] “well-executed” campaigns drove 15% more market share growth than standard ad campaigns”, as dissected in this article by The Drum. Behaviour specialist and Choice Factory author Richard Shotton criticised the media for their misinterpretation of this, explaining that in fact, the research acknowledged, “Badly-executed purpose campaigns performed worse than non-purpose brand campaigns.” Did the media mislead brands like Unilever into thinking brand purpose mattered too much?
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Whether a focus on brand purpose is the way to win over customers, employees, and shareholders alike is out for debate but let us not forget that fundamentally, the majority of consumers are making it clear they want the brands they use to be ethical not just appear ethical. And the watchdogs are cracking down on this too, particularly when it comes to greenwashing.
Swedish alt-milk brand Oatly recently got into trouble with the UK’s Advertising Standards Authority (ASA) with their advert claiming “climate experts say cutting dairy and meat products from our diets is the single biggest lifestyle change we can make to reduce our environmental impact” generated “109 complaints from members of the public and the campaign group A Greener World”, The Guardian reports. “The ASA said consumers would understand the claim to be a “definitive, objective claim that was based on scientific consensus,” when instead it was the opinion of one climate expert.” The same Guardian article reports how the ASA also “banned ads run by Lipton, which is owned by drinks giant Pepsi, over misleading claims that all parts of its bottles are made from 100% recycled plastic.” It seems brand purpose without substance won’t cut it.
Hasn’t it become all too familiar an exercise for marketing departments to brainstorm how to demonstrate the brand is ethical, utilising well-thought-out marketing campaigns? Shouldn’t the question be, “How can we be more ethical?” And not just within marketing and HR departments, but across every department of the business.
Ethics needs to be ingrained across the whole business by reviewing how each department functions in relation to ethics and the impact this has on the products, the consumers - and the world at large. Not only to attract customers and employees and boost sales - but because it’s the right thing to do.