For several years now, global market research has shown that companies can benefit from staking out positions on social and political issues. Consider, for instance, the widespread corporate support of the LGBTQ rights movement, or the spate of brands targeting “green” and “sustainable” consumers. As the social media age has made conventional advertising less effective, marketers have turned to advocating for causes in hopes that consumers view them as having opinions worth re-sharing.

Now, the recent and ongoing protests in the US sparked by the death of George Floyd in police custody, captured in a graphic video that went viral, have forced a response – and in some cases a reckoning – for many global companies. They may serve as a lesson and a sign of the changing market realities for brands around the world – including here in Southeast Asia. Since many US-based brands operate globally, people around the world are affected directly and indirectly by their messaging and policies. Changing social attitudes in the West are also relevant for export-based Asian companies; imagine if the racist Chinese laundry ad from 2016 came out now from an international brand – massive backlash and boycotts would result. Of course this is an extreme scenario, but any cross-cultural exchange will make faux pas increasingly likely.

In the past, US government regulations and mandates have been required to push companies to meet diversity quotas. But now, the government isn’t the one pushing companies to do the right thing – the people are. Millennials and Gen Z desire to work for companies that are authentic – not just in talk, but in behavior – and the business community is responding to the turning tides.

A recent survey by the data company Morning Consult found that, for majorities of both Black and white consumers, making a statement on the US protests is less controversial than remaining silent in an effort to stay neutral. The most universally appreciated messages were those in support of small businesses, but on other topics there was a significant age gap. Gen X and Boomers preferred statements about the protection of private property and safety of police, while younger demographics preferred those that mention the death of George Floyd and racial inequality in the US. In other words, brands are expected to say something, but the statements that most benefit them depend highly on their target audiences.

That said, Morning Consult also found that shows of support on social media are far less appreciated than concrete actions like helping communities recover and combatting racism in their workplaces.

As Black Lives Matter demonstrations have extended into Pride Month, some have made comparisons to the June 28th, 1969 Stonewall Riots against police brutality towards the gay community in New York’s Greenwich Village. The first Gay Pride parades were held in various US cities a year later in commemoration of the riots, which effectively kicked off the modern LGBTQ rights movement that would come to span the globe and enshrine June as Pride Month.

On June 20th, the Associated Press, the New York-based news agency that reports from around the world and seeds international articles to local and international papers, changed its widely-followed style guide to capitalize the words “Black” and “Indigenous” when referring to persons or cultures, which has international implications considering how often AP articles are translated and re-published – and it’s inspired us to do the same.

Nike sets an example

US-based sportswear company Nike was among the first major companies to respond in support of the protests. In the white text on a black background that has become characteristic of the Black Lives Matter movement, they played on the brand’s tagline, saying “For once, Don’t Do It” – with “it” being pretending “there’s not a problem in America”. The ad rapidly gained traction on social media and was even shared by Nike’s rival Adidas.

Nike’s response was somewhat predictable, given its recent support of the Black Lives Matter movement, but it was not always this way. In the 80s and 90s, Nike was heavily associated with Michael Jordan and the massively popular Air Jordan sneakers. In 1990, when Jordan was asked to support Black candidate Harvey Gantt for mayor of Charlottesville (Jordan’s home city) against the blatant racist Jesse Helms, Jordan declined and quietly donated to the Gantt campaign. As an explanation, he famously joked that “Republicans buy sneakers too,” a quote that has followed him and defined the Jordan brand. That attitude also exemplified Nike’s branding at the time, which focused solely on sports and athleticism sans social context.

But in 2016, Jordan spoke out in favor of Black Lives Matter, and he has since made large donations to related foundations. Nike’s 2017 “Equality” campaign featuring Black athletes followed in 2017, setting the stage for their 2018 campaign featuring Colin Kaepernick, the NFL player who lost his position after kneeling during the national anthem in protest against police violence.

When the ads were launched, #NikeBoycott began trending on Twitter and people threatened to burn their shoes. Nike shares fell 3 percent. But sales increased after the campaign, and investment followed, rising over 30 percent. Its brand favorability followed a similar pattern of dive and recovery, largely driven by the approval of younger and non-white consumers.

However, both Nike and Adidas have been criticized in both social and traditional media for having largely white leadership, in contrast to their statements in favor of Black Lives Matter and dependence on Black consumers and athletes. So have other large companies with Black management below the national average of 8% – which in itself is low relative to the 13% of US workers who are Black. Nike, in fact, is a rarity with its nearly 10% Black vice presidents in 2019, which it claims was a 2% increase from the previous year.

This backlash shows that there are risks in taking a stand, not only in losing “law and order” consumers, but also disappointing those who see brands as hypocritical bandwagon jumpers without policy to back up their statements. These failures can do serious damage. We all know the case of Pepsi’s infamous Kendall Jenner ad, but recent criticism has focused as much on policy as messaging. In one remarkable instance, when the sustainable fashion label Reformation spoke out in support of the protests, its own uncomfortable history was put on display. In a series of Instagram posts, former assistant store manager Elle Santiago – who is Black – detailed the discrimination she faced at the company, being “overlooked and undervalued as a woman of color,” and called out founder Yael Aflalo for permitting a “racist and unsafe” culture. In response, Aflalo issued an apology titled “I’ve failed.” She has since resigned.

Global Brands get on board

Despite the risks, brands that operate in the US have clearly decided that it’s to their benefit to respond to the social crisis. Increasingly, companies are coming to understand that effective policy can be the best PR – and make real changes accordingly. Here are some high-profile examples:

  • Ice cream maker Ben & Jerry’s, which has a history of supporting progressive causes, came out stronger than most, with the statement “We must dismantle white supremacy.” It followed that up with a blog detailing its position, including policy recommendations. It was widely lauded in both social and mainstream media.
  • Starbucks first prohibited employees from wearing items supporting BLM because it violated the dress code policy against promoting political movements, then faced backlash and reversed their stance. They previously exempted clothing supporting LGBTQ rights. Now they have designed and will distribute 250,000+ shirts featuring protest signs, including one that says “Black Lives Matter”.
  • Lego instructed advertisers to remove ads for police-focused sets.
  • Music executives Jamila Thomas and Brianna Agyemang, both Black women, started the Blackout Tuesday movement, which prompted responses in their industry that then spread across social media.
        • Apple Music blocked its For You, Browse, and Radio functions, replacing them with a Beats 1 stream playing music from Black artists.
        • Tiktok removed all playlists and campaigns from its sound page on Tuesday and donated $4 million to related foundations and causes.
        • Spotify blacked out images of many of its popular playlists, included 8 minutes and 46 seconds of silence in them, and matched user donations toward organizations fighting racism.
  • In the big tech realm, Amazon, Facebook, Google, Twitter, Reddit, Airbnb, Nextdoor, and IBM all made gestures of support for the movement. IBM, Microsoft, and Amazon also discontinued sales of their facial recognition software to police, which has often been called biased in terms of race and gender. In the case of Amazon, this policy is in effect until a law has been passed to regulate it, while for Microsoft it’s indefinite, and IBM will stop investing in facial recognition entirely.
  • Led by outdoor apparel companies Patagonia, the North Face, and REI, a Facebook ad boycott is growing among companies both large and small in response to the social media giant’s failure to remove dangerous and misleading posts related to the protests, including posts by US President Donald Trump which are widely perceived (including by Zuckerberg himself) as incitements to violence.
  • Citigroup Chief Financial Officer Mark Mason wrote a raw and personal blog detailing his experience as a Black man and the “reminders of the dangers Black Americans like me face in our daily lives . . . I’m talking about something as mundane as going for a jog.”

However, many of these companies have been criticized for making only token responses that are not relative to their power. Youtube’s $1 million donation, for instance, pales in comparison to its $15.1 billion in annual revenue last year.

In the next blog, we’ll consider the ripple effects of the Black Lives Matter movement on Asian societies – and businesses.