October 9 | 2019

Nike, Patagonia and the return of brand purpose: how can you make it work for your brand?

Author: Daniel Vargas Gómez

A recent 300,000 person consumer poll found that people wouldn’t care if 74% of the brands they use simply vanished. The same poll found that people agree that 60% of the content produced by companies is poor, irrelevant or failing to deliver. Earlier this year, billionaire and Bridgewater founder Ray Dalio emphatically stated that capitalism is no longer working. Even during the 2019 World Economic Forum in Davos, one of the biggest headlines was about a Dutch historian, Rutger Bregman, who, in a very Dutch manner, let everyone know how absurd he found the fact that in a meeting gathering together CEO’s of the biggest corporations to talk about the state of economic affairs, taxes were never part of the discussion. Saying it “felt like being at a firefighters’ conference where no one ever mentioned the word ‘water’”.

So, in a world where a company’s sole mission should not be reduced to generating profits for its stakeholders, does it mean that social purpose and sustainability will be placed at the forefront of its business and its brand communications?

Short answer: Yes! But let me address the main point raised by skeptics.

 

Patagonia saw its revenue grow by 30% on the year they ran the “Don’t Buy This Jacket” campaign, while Nike saw a 31% boost in sales thanks to Kaepernik’s Dream Crazy Campaign.

 

“Consumers don’t care about my brand’s social impact so this is all just a money waster”

There is always a gap between what people say they would do and what they actually do. So, while 76% of people say they donate to charity, in actuality less than 61% do donate. If the only reason for a brand to adopt a strong purpose would be the fear of its consumers promising to buy somewhere else, I would indeed tend to agree that such action is not a sane business strategy. However, when it comes to brand purpose, there is plenty of evidence allowing us to evaluate people’s behavior, not just their good intentions: Patagonia saw its revenue grow by 30% on the year they ran the “Don’t Buy This Jacket” campaign, while Nike saw a 31% boost in sales thanks to Kaepernik’s Dream Crazy Campaign.

Purpose, by all empirical measures does pay. So a more relevant line of questioning begins by asking: When does it pay and how can I ensure that my own brand’s purpose pays off?

According to the IPA Effectiveness Awards, which every year judges the most effective advertising campaigns, they argue a strong brand purpose pays in two ways: 1) Purpose boosts brand saliency and 2) Purpose increases lifetime value. A strong purpose can be an effective way to stand above the crowd, driving return on marketing investment; if your product is pretty awesome but your brand happens to be part of a category that is awash with similar aspirational images and messages, purpose will play a big role in creating differentiation and loyalty. As the Nike and Patagonia campaigns show, purpose can have serious impact on revenue.

 

How can I ensure my brand’s purpose pays off?

Your brand’s purpose needs to be authentic. Yes, I know its a buzzword, but wait, unroll your eyes and keep on reading, because that’s not the main point. This is it: the biggest mistake a brand can make is to limit its purpose to simply advertising. Over-hyped claims of universal effectiveness or plain insincerity (eg. greenwashing) are the main pitfall of brands that reduce purpose to advertising. After all brand purpose is a business strategy; not only a communications strategy.

The Togetherness bottle was a parody of ‘feel-good’ advertising created by juicemaker Oasis that perfectly illustrates this point. Taking the topic of “togetherness” to absurdity Oasis pokes fun at how brands can sometimes pretend to be holier-than-thou, while we all can see what the bottom line really is. A video for the pretend campaign begins with a well-known reflective tone, but quickly turns sideways as it shows how ridiculous two people look when trying to drink from one bottle at the same time.

 

 

 

Antonio Achille, McKinsey’s senior partner and global head of luxury at management, explains the need for an authentic brand purpose by reminding us that “the new consumer is very sensitive about increased transparency”: GenZers in particular seem to be especially good at smelling out BS, as Gillete learned through the backlash received after attempting to jump on the ‘woke’ bandwagon. With 1.5M dislikes on YouTube the brand is on its way to the top of the platform’s most disliked videos, next to Justin Bieber’s Baby and Rebeca Black’s Friday.

 

Gillete’s opportunistic message fell flat on the ears of women who knew well what the bottom line really was.

 

 

Can your brand create competitive advantages based on its social impact?

Yes, it can – and should. An eye-opening study from Harvard Business Review stated that companies that implement strong environmental and labor policies, double their market cap in 18 years. Making social impact the end driver of your brand’s purpose is, not only a matter of social responsibility, but it also reflects that your brand understands the positions that millennials and GenZers are taking on social issues. One report after another confirm the sensitivities guiding these new consumers, all clearly showing that purpose and social impact are high up among the factors they consider when making a purchase.

Gen Z and millennial consumers already represent $350 billion of spending power in the US alone and are already the largest proportion of the workforce in many countries across the globe, so it is not surprising that attracting one such consumer to your brand is good business. With a growing number of brands already talking about their purpose the role of marketing becomes as important as ever.

Being able to communicate your purpose with transparency matters, but being able to do so effectively may be even more important: 58% of GenZers said they were more likely to buy from brands that back a good cause—if they know about it.

If they know about it … that’s really the point. With a growing number of ways in which brands are having an impact, communications play a leading role. From reducing carbon footprints, improving labor policies, to fairtrade practices and socially and environmentally conscious investments, a brand’s story of social impact can be both rich and unique. Being able to tell a well-rounded more authentic story, for example, explains why Nespresso chose to replace Jack Black with a Guatemalan cooperative farmer. While Black can be funny, the brand realised that he simply would never be able to communicate a relatable message regarding the efforts the brand is making to ensure that their coffee production is sustainable and fair towards farmers. On the other hand, for the Guatemalan farmer this story comes natural and gives people a true motive to choose for the brand.

Communications, in addition, are no longer reduced to copy or message. They are rather a combination of message, medium or channel and visual perception of the brand. This is the reason why Hewlett-Packard, for instance, reported that greater diversity in its advertising led to an increase in sales. It is in being able to deliver a compelling message across various outputs where marketing strategy needs to make its magic.

So, whether it’s Nike’s nod to the Black Lives Matter movement by supporting Colin Kaepernick, Ikea’s commitment to 100% recycled wood use in 2020 or The North Face taking a shot at Trump’s calls to build a wall in their “Walls Are Meant for Climbing” campaign, all these actions point towards the same direction: the days of skin-deep consumerism are over and the brands of the future will be driven by purpose as much as profit.

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