Are Brands Playing It Safe During Elections? (Part 2) | Americus Reed

How Does Social Media Affect Brands During Elections?

Dan Loney: We’re with Wharton marketing professor Americus Reed, diving deeper into how brands are playing it safe during elections. What’s the expectation? Does it get easier or harder to be able to do this? Because social media keeps that tribalism front and center almost on a daily basis right now.

Americus Reed: Maybe a little bit of both. In some senses it’s easier because people are now self-selecting their information from their various ecosystems where they get their news and their entertainment and things like that. They can just go to exactly where everything they want to believe is reaffirmed. That helps the brands that want to be there, messaging to them. It’s harder in the sense that, like anything else, the more companies that are doing this, the less differentiation it creates. If everyone’s doing it, then it doesn’t really make you stand out as a brand, product, or service organization.

Loney: We have to bring up the component of what it ends up meaning within the walls of the company. Think about some of the stances that Google was taking and how it was being perceived and reacted to by the people that were working for the company. We saw some of the protests out there as well.

Reed: You’re pointing to something, again, that’s the hornet’s nest here. It’s the double-edged sword. On one hand, taking a political or ideological viewpoint is good on the employee side because it communicates what you stand for and the type of employee you’d like to attract to that organization. From an organizational culture point of view, it can be a very good thing. You’re creating the potential for happier employees, because they believe they’re going into an environment where their values are reaffirmed and shared by like-minded others.

On the other hand, that also has a potential to squash diversity. You do want different points of view, different perspectives. That’s part of decision-making so you can get the totality of the efficacy of making really good market decisions, because you’ve got a lot of perspective. So again, a double-edged sword here.

Loney: We also need to talk about it from the business side. For a lot of these companies, they’re going to end up making bottom-line impact decisions. It brings us back to that element of what we believe a company should be in and around the social component and the values component, compared to what the company wants to see on that bottom line, and the success and the profit that they want to see every quarter.

Reed: Yeah. I love that point. That is the tension that exists here, Dan. We’ll go back to the point we were discussing earlier. The idea is that, net net, I might lose some people. But the people I gain should be more valuable, because they are coming to the tribe not just because of the stuff. They’re coming to the tribe to be affirmed. They’re coming because what I’m doing, the brand, product, service, organization, is now identity-relevant in a very important way.

So, that customer lifetime value ought to be a lot higher for that type of person. Which then should translate, in the long game, to higher profits, more value that’s being added. Harder to take those customers away because they’re super loyal to you on the base of these political, ideological viewpoints.

Loney: But the company also has to be very aware of social media. They believe they have a fairly safe haven to be able to send a message forward, but they don’t because of how the platform is bringing forward the message of other companies and their advertising or their promotion.

Reed: That’s right. This happened on X recently, where you might have different sorts of political, ideological viewpoints showing up in a feed. And that has impact, like you said. Companies have to be OK with giving up some of this control if consumers are going to be sort of out there as consumer vigilantes with that little cellphone in their pocket. they’re taking pictures and doing stuff, sending stuff around the world. And you just have to live with that, you have to manage it. If you’re doing it right, and you’re customer-centric, and you’re involving them in the process, you’re able to self-regulate some of that activity.

Loney: But that’s something that’s very hard for companies to give up.

Reed: It’s very difficult. It takes discipline. Because we, as marketers, have loved the old model where we stand on the mountaintop and we shout down to the people. Traditional advertising, there you go. But now they talk back to us and say, “No, that’s BS.” Or they say, “We want to know what you stand for. Tell us.” Now you have to fill that silence.

Loney: The focus for the companies has to be even tighter as they move forward, in terms of that messaging and delivery, because everything is out there in the open.

Reed: Yeah, everything is transparent. That’s the beautiful thing about the today’s day and age, Dan. You said it. The cost of search is zero. You can understand anything you want to understand. The Google machine, it’s out there. And you can just pull whatever you need to know about a company, and all of that. Companies have to be very careful now on, what are you saying in what channels? Because it’s all out there, and it is easily observable and easily searchable and findable. That’s just part of that tension that the C-suite is going to have to get used to dealing with, because I don’t think it’s going away. It may even get more amplified in the future.

How Do Brands Strategize in a Highly Politicized Environment?

Loney: The presidential election is once every four years. There would be a ramp up to that election eight, nine, 10 months beforehand. Now we’re in a world where everything’s politics. It seems like there’s no break in that cycle. There’s no time for a company to deliver a message and not having the potential of political backlash.

Reed: I love that point because I think we do live in this highly politicized environment right now. Even the political parties themselves are creating opportunities that brands can respond to. I’ll give you an example of this. Tim Walz was in a store getting Doritos for Vice President Harris. That’s an opportunity for Doritos to say something, or not.

JD Vance said, “Hey, don’t mess with my Diet Mountain Dew.” It’s an opportunity. You have a choice now, because you’re part of the story, as to whether or not you want to make some sort of connection, jump on some little trend that happens, get a little bit of bump up. Or if you stay out, that’s a decision as well.

Loney: It’s one of those cases where the company, the brand, may have more rules that they have to consider than the politician who is looking to get any connection with the media, social media, or whatever.

Reed: I think that’s 100% correct. The difficulty is you have all of these things that are going on in the C-suite. You have the marketers. You have the lawyers who say, “What can we say, not say?” You have the constituents. You have the folks that are involved with the stock. There’s all these different groups that have to be managed. These are opportunities that come up, and you just can’t go out and do something. You have to understand how all these dots are connected and what you can do that will avoid potential backlash.

Loney: How has it changed for marketers?

Reed: The role of the chief marketing officer is totally different now. We used to never see these people. Now, you better be camera-ready, man. You better be ready to go out there and talk. What’s your position? Why are you doing certain things? All these things. How are you helping customers? And you have to almost be on the ground with customers, sort of in their domain, living the lives with them, understanding how they’re using your products in ways that can facilitate your ability to regulate the messaging that you want to give to them with respect to some of these issues that you may want to align with.

Loney: What’s the message you send to the corporate world about the time we’re in, the thought process that they have to enact, in order to best serve a lot of different individuals?

Reed: I love that question. It’s what is the strategy? Well, the strategy is this: Know your customer. That’s point No. 1. Understand who they are and their particular ideological viewpoints that are inherent in their internal identities. If you’re going to make a decision to do this, I think you have to do it all the way. And live or die with that decision calculus that says that it’s more important for us to stand by these values than it is to try to manage incremental sales on the margin. We’re just going to go with this because we believe in this.

If these are your values, and these are authentic pillars of how you define who you are as a brand, product, service, or organization, then they are what they are. And you live or die by that, and you’re willing to go out there and be that in an authentic way. If you’re right, and if you’ve done it, and you understand your customer, this will pay off in the long run. Because you’re going to harness all of that value for these very identity-loyal types of individuals.

Loney: Until you make that investment and you get burned on it.

Reed: Yeah. And then you start over. Then you walk it all back. You say sorry, and you try it again.