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Tuesday, October 22, 2019

Corporate America Discovers the Limits of Political Posturing as a Marketing Tactic

By J.D. Tuccille - October 22, 2019 at 10:20AM

After years of companies gilding themselves with virtue by associating with causes popular among some customers (and implicitly telling folks with different politics to take a hike), Apple, Blizzard Entertainment, and the NBA find themselves torn between the values of an open society and pleasing the authoritarian Chinese government and the vast market it controls. It's a no-win situation that was inevitable once companies took to exploiting political posturing as an opportunity to appeal to favored factions.

"Political discourse is finding its way into the brand world. Or, to be more accurate, brands are joining the political discourse," Patricio Robles of marketing firm Econsultancy noted two years ago. But there are risks to that strategy. "It's simply not possible for brands to craft simple messages around [political topics] that aren't bound to offend large numbers of people who hold reasonable but opposing views," the piece went on to warn.

Many companies have been willing to risk offending large numbers of people in hopes of winning over even more. The NBA, for example, has happily enjoyed the gloss of players and coaches who denounce racism and police brutality and take stands on other issues—some of them explicitly partisan, such as when the Golden State Warriors met with former President Obama rather take the traditional meeting at the White House with current President Trump. Apple's Tim Cook attached himself to calls for racial justice and against police brutality. Nike gambled that dumping Betsy Ross-themed shoes over dubious allegations of racist connotations would play well with more customers than it alienated.

A legion of companies and corporate executives align themselves with the gun control movement out of a perception that they'll curry more favor with Americans fearful of violence—even in a period of declining crime—than they'll lose from those who favor self-defense rights.

Netflix backed out of filming in North Carolina over the state's requirement that people use bathrooms that correspond with their sex at birth, and national retailer Target slapped at the same law.

If those companies please more customers than they offend, it can be a successful strategy, at least in the short-term. But an adopted aura of virtue can be easily dissipated if you run up against somebody who can render it very unprofitable, or simply put you in an impossible position.

For the NBA. that somebody turned out to be Chinese officials and consumers who expressed their displeasure after Houston Rockets General Manager Daryl Morey tweeted support for Hong Kong's pro-democracy protesters in their struggle against the Chinese government. The team's owner promptly distanced himself and his team from Morey. The NBA itself groveled in a press release noting that Morey's personal statement in support of demonstrators almost universally seen throughout the free world as the good guys "deeply offended many of our friends and fans in China, which is regrettable." Among other brand-name players, LeBron James of the Los Angeles Lakers, no stranger to political statements of his own, ripped into Morey as "misinformed" and failing to consider "the consequences and ramifications of the tweet."

Earlier statements about domestic politics may have worked as outreach to customers who share those takes on the same issues. But Morey's tweet in favor of protesters demanding recognition of the rights available to the residents of free countries posed a very expensive threat to the NBA's plans to expand in China.

Similarly, concerns about police conduct end at the border for Apple's Tim Cook. He and his colleagues briefly agonized before deciding they didn't want Hong Kong residents tracking abusive cops with apps made available by his company. "Apple initially rejected HKmap.live from the App Store earlier this month, then reversed its decision a few days later. Now it has reversed its reversal," reported The Verge. "The app and accompanying web service has been used to mark the locations of police and inform about street closures during the ongoing pro-democracy protests." Apple then dumped the app for Quartz, a news service that closely tracks Hong Kong protests, claiming its content is illegal in China.

Concerns about Chinese reactions also weighed heavily on video game company Blizzard Entertainment, which banned and briefly confiscated the winnings of Hong Kong-based gamer "Blitzchung" after he voiced support during a livecast for pro-liberty protesters in his city. The company later returned the purse and reduced the ban—only to punish an American University team for similar pro-Hong Kong sentiments. Unsurprisingly, Blizzard is expanding in China and worries that the wrong politics will be a problem.

Blizzard has less of a history than Apple or the NBA in terms of political marketing, but the company does have a plaque on its campus promising that "every voice matters"—which was covered by outraged employees in protest of management's conduct.

Apple, the NBA, and Blizzard would have run up against China's censoriousness, no matter what, while doing business there. But a history of political posturing makes Apple's and the NBA's stroking of the world's largest police state that much harder to stomach. For its part, Blizzard's first major foray into political expression is one that explicitly supports an authoritarian regime and violates its own stated values.

The impossible situation and the reaction it engendered was predictable; once companies started down the path of favoring one political position or faction over another, they were guaranteeing conflict and just hoping that they'd picked the winning side. Even before these firms ran up against the impossibility of finding a political position that could please both pro-democracy protesters and thuggish authoritarians, companies were discovering the downside of alienating some people in order to win the favor of others.

For example, Target's opposition to North Carolina's bathroom law sparked a backlash among social conservatives who, like other customers, also have money to spend. Starbucks had to respond to push back from customers who saw the company's pledge to hire refugees as conflicting with its earlier promise to hire veterans. Neither reaction gained much national notice, but they should have been taken as indicators that companies enter a minefield by politicizing their brands.

How do businesses navigate a world in which people hold opposing views on many issues and different interpretations of right and wrong? There's no clear and easy answer but submitting to the demands of an authoritarian government will always be a bad look, rendered that much worse if you've made a habit of cloaking yourself in assumed virtue by embracing political causes.

As an alternative, businesses could respect the free speech rights of employees and customers and keep the businesses themselves as free as possible from political entanglements that just alienate potential customers.

"Brands should also consider that there's a huge difference between true values and political positions and consider how their statements, initiatives and decisions can unnecessarily conflate the two, dividing their customers and turning themselves into political props in the process," Econsultancy's Robles cautioned in 2017.

In the weeks and months to come, Apple, Blizzard, the NBA, and lots of other companies may have to reconsider the choices they've made about politicized branding for their efforts.


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