When brands go woke, do they go broke?

2019 supercharged brand involvement in issues of social responsibility. But as more of these stories come to light, the more polarising these issues can become. Do businesses, of all sizes, risk losing mass reach if they continue to pursue a ‘woke’ strategy?

The phrase ‘Get woke, go broke’ originated after a paper by John Ringo was published online in 2018 (since deleted) that refers to the rise of organisations using politically correct actions as part of their strategy, only for that to result in a massive loss of income because they have abandoned mass reach. It soon gained some cut-through and has been regularly used in online analysis of businesses as diverse as Gillette and Disney, even if it has not quite come up in more mainstream channels.

In 2019, you don’t have to look far to see the discrepancy between what’s lauded and what’s popular. Greta Thunberg may have won Time magazine’s person of the year, but Donald Trump’s approval ratings have held steady. Indeed, sales of numerous creative artists have gone down when they have criticised him publicly and, in America in 2017 at the height of anti-Trump protest in Hollywood, movie audiences hit a record low. Something similar happened our side of the pond, with the ‘Youthquake’ trending on Twitter all of December 12th only leading to a big Conservative majority once all the ballot papers were counted.

So, with this gap between what’s popular and what’s woke, should businesses be looking before they leap into the publicity of purpose? Does such a strategy abandon mass reach and, most importantly, do you really go broke if you get woke?

Failures do exist

Enhancing this narrative is the fact that businesses that have dabbled in this strategy have seen their share prices fall as a result. Only this month, Patrick Stewart’s outspoken comments about Brexit have encouraged a backlash against his new Amazon Prime show, Picard. Though Hollywood actors are often fairly outspoken in the modern age, in the studio era of Hollywood stars were carefully managed not to say anything political, for fear of it affecting their drawing power.

This is something Nike learnt when it aired commercials starring Colin Kaepernick in summer 2018. The commercial has not just been controversial, it has been acclaimed, winning an Emmy in 2019 – the first since 2002 for the giant clothing brand – and gaining the kind of plaudits from industry experts that money simply can’t buy. Nike shares fell nevertheless but it’s important to note that they always saw it as a way to engage with a younger audience; it seems to have done the trick. Prompted the genuine thought of if culturally awareness if simply a long-term strategy rather than a short-term press release.

Gillette are undoubtedly the most famous example this side of the shore, facing genuine backlash when they switched from ‘the best a man can get’ to ‘the best men can be’ and all that entailed. Piers Morgan was the highest profile of a number of, mainly male, critics saying they would never buy the brand again. P&G took an $8 billion non-cash write-down of Gillette last year.

But it’s not the whole story

It would be tempting to say that going woke, if it didn’t make them broke, certainly lost Nike and Gillette some money along the way, but it’s never really that simple. Both companies are battling a market that has changed considerably, and they may still be the big fish in the pond, but there are now other sharks circling. Gillette, in particular, will have to adapt to a world in which we shave less often, and the likes of Harry’s and Dollar Shave Club loom large.

Indeed, Harry’s have arguably done a much better job at looking at toxic masculinity than their big-time rival, creating a long-form video in 2018 that fought gender stereotypes and genuinely sparked conversation around what it means to be masculine in the modern world.

Far from looking like an ill-judged apology for the mass reach of the traditional male, it opened up the purpose of the start-up to being part of the conversation about what it means to be man. So, why did they succeed where Gillette didn’t?

It’s about the brand

There are clear business reasons for your brand to have a sense of purpose, simply because, with research group Futerra revealing surveys that suggested 88% of those polled are disappointed if their brands are not helping them be ethical. And it’s not just customers. According to The Economist, 70% of business executives take social purpose as a significant reason behind choosing a job role. Even if the idea of being woke isn’t yet mass reach, doing something that makes the brand stand out for doing the right thing might well be, and staff undoubtedly like to be involved with something they see to be good.

Pepsi attracted numerous critics for their Kendall Jenner advert, for mixing up the social struggle with someone who, rightly or wrongly, represents a unique form of privilege. Simply put, its wokeness was manufactured and not earned. It’s why Nike is in a better position to leverage their controversy into a stronger long-term brand, whereas Gillette will struggle.

Whilst Nike have ridden the controversy to earn awards, and have reacted quickly when they have made errors, Gillette have had to firefight an advert that, though well-intentioned, bought a political element to a brand that had been largely apolitical to that time. Harry’s may have shifted the narrative of how shaving is advertised, but it was always too big of a risk for Gillette to essentially reverse their previous marketing message – well-intentioned as it might be.

So, do you go woke, go broke?

Woke is, or has become, a loaded political term, as much a criticism of a lifestyle as it is a genuine set of values. Brands should make the distinction between being woke and having a purpose, because it is becoming increasingly clear that potential employees and customers alike value those that make positive choices.

Still, not all companies can be purpose-driven, and those that seek to instigate a purpose against the long-term history of the brand must take all the risks on board, analyse whether this is where their priority should lie and have a clear strategy for the roadblocks along the way. Gillette needs to look at how their market has changed, rather than fixing their advertising, whereas Nike seems to have the flexibility to make their strategy work.

Still, whilst it’s clear that more brands should, and will, pursue a sense of purpose in their strategy, it doesn’t mean they need to shout about it in their advertising. CIM members can read the words said by Piers French, director of client AO Business UK, in the latest edition of Catalyst on finding a sense of purpose in business: ‘Social value is what you do when no one is looking.'

That is something all companies would do well to take notice of.

CIM members can read the latest version of Catalyst online.

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