GSG study: brands must tread carefully on hot topics

NEW YORK: Most US adults believe businesses should address societal issues, but not weigh in on political topics that do not relate to their industry, according to a study from Global Strategy Group released Wednesday.

NEW YORK: Most US adults believe businesses should address societal issues, but not weigh in on political topics that do not relate to their industry, according to a study from Global Strategy Group released Wednesday.

GSG's “Business & Politics: Do They Mix?” report examined the trend of businesses taking a stance on social and political issues such as same-sex marriage, the Affordable Care Act, and the national debt.

The study is based on an online survey of 806 adults between November 26 and December 3 of last year, with the demographic sample matching that of the US Census.

According to the survey, Americans have clear reservations about corporations straying too far into politics.

Seven of ten respondents (72%) say it is important for businesses to take action to address important issues facing society. Meanwhile 78% of respondents believe it is appropriate for companies to take a stance on political issues facing their industry. 

However, just more than half of respondents (56%) think it is inappropriate for a company to take a stance on political issues that are not related to their business. Less than one-third (31%) believe it is appropriate to take a stance on sensitive social issues, such as abortion or same-sex marriage.

Despite this, the study shows there is a disconnect between what the respondents think is appropriate in theory and what is appropriate in real-world practice.

For example, just under a third (31%) agreed it is appropriate for companies to take positions on same-sex marriage. But double that number (68%) thought that Nordstrom's support of same-sex marriage and partner rights was appropriate.

Alan Sexton, EVP of communications at GSG, said the report shows that Americans are in “two or three minds” when it comes to corporations taking a public stance on major political and social issues.

“There is a general comfort level with corporations being active citizens, but when you get more specific, opinions change,” he explained. “Whether they like it or not, companies and big brands have a political identity in the minds of Americans.”

Sexton added that it is vital a company understands its stakeholders' stance, and in particular is in step with its employees' views before taking a public stand on a political or social issue.

The study also examined the effects that taking a political stance have on corporate reputation, finding that corporate political identity correlates to brand favorability.

It found that brands perceived to be strongly partisan have lower favorability ratings than those placed in the middle of the political spectrum, such as Microsoft and Coca-Cola.

For example 74% of respondents characterized MTV as Democratic-leaning. At the same time, of all the corporate brands tested, MTV had one of the lowest favorability ratings (28%).

Similarly, on the other side of the political spectrum, 71% of respondents characterized Wells Fargo as Republican, but 35% perceived it favorably.

Favorability dropped by an average of 42 points among people who disagree with a corporation's stance, and there was no significant statistical change in favorability rating if they agreed with a company's position.  

Overall, the study found that consumer awareness of companies' political stances is very low, generally 29% or lower.

An exception to this trend was the 66% of respondents who were aware of Chick-fil-A CEO Dan Cathy's position opposing same-sex marriage.

“We are seeing a huge shift in public opinion on big issues, and companies need to be very careful to stay in tune with this,” said Sexton. “While there is an opportunity for a reputational boost from taking a stance, if you end up out of step and the public opposes you, it can have a really significant impact on your favorability.”

He said social media offers brands a window into real-time conversation on big issues. Along with primary research, it can also serve as a “very good barometer” of public opinion.

“Partly because of the gridlock in DC and the impact that political issues such as immigration and same-sex rights are having on businesses' bottom lines, we will continue to see big brands acting more like citizens and CEOs and big companies weigh in on issues they are passionate about,” he said. 

For example, several reports emerged this week about Facebook CEO Mark Zuckerberg's plans to form an advocacy group to promote immigration reform that would give overseas high-tech workers visas to work in the US.

Sexton added that given the risks involved in taking a political stance, brands should gage reaction and plan for scenarios that could happen when going public with their views.

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