How Brands Can Navigate the New Era of Politics

T H E 2 0 2 0

S U R V I VA L G U I D E

1 Introduction

2 The Role of Brands in Politics What consumers expect from brands and their role in American society

3 Consumer Activism How Americans will respond when a brand gets involved in politics

4 Taking a Stand The issues that brands should champion, and the ones they should avoid

5 How2020CandidatesCanAffectConsumerViews Who consumers say they’re most likely to listen to when it comes to boycotting

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TA B L E O F C O N T E N T S

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When Nike brought on Colin Kaepernick as a spokesperson in the fall of 2018, they were welcoming a political firestorm. A Morning Consult report conducted a month ago found that kneeling during the national anthem was the single most hazardous political issue for brands to support, even more than abortion or guns. The explosive response – shoe-burnings, boycotts, online tirades, a drop in stock price – confirmed the survey’s findings.

While the immediate backlash was severe, it was hardly the end of the story. Nike’s calculation was that the audiences who will define their future would ultimately respond positively, even if other groups were aggrieved in the short term. Over the course of the last year, it’s become clear that gambit paid off as Nike’s stock hit all time highs on the back of strong earnings reports. Last year, when Morning Consult asked Americans to think of an ethical company and name the first one that came to mind, Nike was the 26th most frequently mentioned brand. When we asked again this year, after the Kaepernick campaign, they were the 4th most mentioned.

Nike’s story is a potent example of how it’s possible to wade into controversial political waters, be comfortable taking a hit, and come out the other side stronger. By understanding their audience and leaning in on a high profile issue, Nike nurtured its reputation as an ethical leader.

However, it’s also the case that Nike’s pre-meditated campaign is not indicative of how most brands engage with politics these days. More often, brands are reacting to the latest political flare-up on an ad hoc basis. And the results from this study indicate that, despite the potential for windfalls from political engagement, it’s more likely to present issues for brands.

Most consumers don’t particularly want brands getting involved in politics. When brands do get involved, people are more likely to boycott than buycott, and negative responses are generally more pronounced than positive ones. For most brands, most of the time, it’s safer to stay out of politics.

Of course staying out of politics isn’t always possible. In this environment, brands are regularly forced into political predicaments where silence is a response in its own right. In these scenarios, brands need to have a clear-eyed understanding of the terrain, and how that aligns with larger business goals.

This year, Morning Consult has joined forces with Advertising Week to create a new roadmap for brands as they navigate 2020 and this new era of brand politics. We will walk you through the key issues, what stances are safe, which groups are most likely to boycott, which Democratic candidates are the most influential with consumers, how to engage with Trump, and how to think about generational divides.

I N T R O D U C T I O N

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M O R N I N G C O N S U LT

Named one of the fastest growing technology companies in North America, Morning Consult is revolutionizing ways to collect, organize, and share survey research data globally to transform how leaders in business and government make decisions.

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A D V E R T I S I N G W E E K

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H O W W E C O N D U C T E D T H I S R E P O R T

The primary results in this report stem from a survey conducted between August 13-August 15, 2019 among a national sample of 4,200 Adults, including an oversample of 1,000 millennials and 1,000 Gen Z’ers. The interviews were conducted online and the data were weighted to approximate a target sample of Adults based on age, educational attainment, gender, race, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.

On page 17 and 18 the results come from a separate survey conducted from August 21-23, 2019, among a national sample of 2,200 Adults. Results from the full survey have a margin of error of plus or minus 2 percentage points.

R E P O R T AU T H O R S

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C O N S U M E R S S E E B R A N D S G E T T I N G M O R E P O L I T I C A L A N D L E S S I N TO U C H

53 percent of adults say corporations have become more political in recent years - a much higher share than those who say brands have become more responsible, charitable, or in touch with average Americans.

A M E R I C A N S A R E T W I C E A S L I K E LY TO B OYC OT T A S T H E Y A R E TO B U YC OT T

29 percent of consumers say they have stopped purchasing from a brand because of a political stance. Just 15 percent say they’ve spent money to support a brand because of a political stance.

G E N Z A N D M I L L E N N I A L S E X P E C T B R A N D S TO P L AY A L A R G E R R O L E

On a question relating to corporate involvement, 31 percent of Gen Z and 27 percent of Millennials agree that “Corporations play an important role in this country, and they should use their influence to impact political and cultural issues.” Just 16 percent of Gen X and 13 percent of Boomers say the same.

H O W E V E R , AG E I S N ’ T A M A J O R D I V I D I N G L I N E W H E N I T C O M E S TO H O W C O N S U M E R S I N T E R AC T W I T H B R A N D S P O L I T I C A L LY

Younger Americans have different political beliefs than older generations, but there isn’t a dramatic difference in how they interact with brands over these beliefs. For example, Gen Z and Millennials aren’t more likely to boycott brands over politics.

W E A LT H Y, W E L L- E D U C AT E D L I B E R A L S A R E T H E C O N S U M E R G R O U P T H AT B R A N D S S H O U L D B E M O S T C O N C E R N E D A B O U T

When it comes to boycotting and taking other actions around political issues, education, income, and political ideology are the biggest drivers of engagement.

I M M I G R AT I O N I S A M O N G T H E M O S T G E N E R AT I O N A L LY D I V I S I V E I S S U E S

If a brand were to advocate for stricter immigration policies, 48 percent of Boomers would have a more favorable impression of the brand, compared to just 22 percent of Gen Z.

E N G AG I N G W I T H T R U M P I S S T I L L A C O M P L I C AT E D T I G H T R O P E F O R B R A N D S

Issuing a statement about Trump - whether positive or negative - is likely to draw a major backlash. But among brand activists the reaction is likely to be stronger if the statement is positive.

S A N D E R S A N D T R U M P ’ S B R A N D C R I T I C I S M S A R E T H E M O S T I M PAC T F U L

When Trump criticizes a brand, 9 percent of Americans say they would definitely boycott it, and 7 percent say the same about Sanders.

K E Y TA K E AWAY S

L I V E : 2 0 2 0 S U R V I VA L G U I D E F O R B R A N D S

Join Morning Consult for a live presentation at Advertising Week 2019, featuring additional insights on the new challenges and opportunities brands are facing ahead of 2020

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C O N S U M E R S S E E C O R P O R AT E A M E R I C A G E T T I N G M O R E P O L I T I C A L , A N D L E S S I N TO U C H W I T H T H E P U B L I C

53 percent of consumers say that brands have become more political in recent years, and just 24 percent say they’re more in touch with the public. 30 percent of Republicans think brands have become “much” more political, compared to 21 percent of Democrats.

53%

Say corporations are becoming more political

Say they’re more in touch with the American public

Say they’re more ethical

24% 23%

Additionally, 22 percent say corporations are becoming more accountable for their actions, 26 percent say more charitable, 43 percent say more environmentally friendly, and 27 say more value-conscious.

Last July, when Morning Consult asked this question, 64 percent of consumers said that corporations were becoming more political – a signal that this sentiment is softening.

A N D T H E P E R C E P T I O N I S T H E Y ’ R E B E C O M I N G M O R E C U LT U R A L LY L I B E R A L I N T H E P R O C E S S

Consumers are 16 points more likely to say corporations are getting more culturally liberal than conservative. Among consumers who identify as conservative, the divide is particularly pronounced - a 34 point gap toward becoming more culturally liberal.

In recent years, would you say corporations in America have become more or less:

39%

23%

13%

14%

27%

25%

22%

38%

Culturally liberal

Culturally conservative

More No change LessDon’t know/No opinion

T H E R O L E O F B R A N D S

G E N Z A N D M I L L E N N I A L S E X P E C T M O R E F R O M B R A N D S T H A N O L D E R G E N E R AT I O N S

The youngest consumers have grown up watching brands engage with political and cultural issues – and they’re more likely to see that as an important role. Older Americans are far more skeptical as the graph below shows. Just 43 percent of Gen Z think corporations should stay out of politics, compared to nearly three quarters of Boomers.

31%

27%

16%

13%

43%

50%

63%

72%

Gen Z adults

Millennials

Gen X

BoomersGrey bars are the share who say don’t know or have no opinion.

Corporations play an important role

in this country, and they should use

their influence to impact political

and cultural issues.

Corporations should stick to

what they do, and generally not

get involved in political or cultural

matters.

T H E R O L E O F B R A N D S+

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H O W E V E R , YO U N G E R C O N S U M E R S D O N ’ T AC T UA L LY E N G AG E W I T H B R A N D S D I F F E R E N T LY O V E R P O L I T I C A L M AT T E R S

Yes, younger consumers see brands playing a different role in society than older generations. It’s also the case that younger consumers have different political priorities, as detailed on page 14. But when it comes to how they interact with brands over political issues, younger Americans aren’t that different, as the tables below show.

The share who say they pay “a lot” of attention to political and ethical matters relating to brands:

9%15% 16% 13%

Gen Z adults Millennials Gen X Boomers

The share who say they are willing to overlook political and ethical issues relating to brands,

iftheyotherwiselikewhatthebrandoffers:

50% 51%45%

51%

Gen Z adults Millennials Gen X Boomers

The share who say they stopped buying the products or services of a company because of

a political action or stance it took:

28% 26%31% 30%

Gen Z adults Millennials Gen X Boomers

T H E R O L E O F B R A N D S

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T H E P E R I L S O F TA K I N G A S TA N D : C O N S U M E R S A R E N E A R LY T W I C E A S L I K E LY TO B OYC OT T A S T H E Y A R E TO B U YC OT T

M O S T A M E R I C A N S H AV E N E V E R TA K E N A N Y AC T I O N I N R E S P O N S E TO A P O L I T I C A L S TA N C E A B R A N D TO O K

47 percent of consumers say they have taken one of the below actions or buycotted or boycotted. The flipside - a slim majority (53 percent) has never taken any such action.

Share who say they have done any of the following:

Told family and friends to stop buying the products or services of a company because

of a political action or stance it took

Posted something to one of your social media accounts about a company because

of a political action or stance it took

Signed a petition against a company because of a political action or stance it took

Posted something to an online forum about a company because of a political action or

stance it took

Protested in person, such as during a march or outside a storefront, a company because

of a political action or stance it took

21%

16%

16%

13%

6%

C O N S U M E R AC T I V I S M

29%

Stopped buying the products or services of a company because of a

political action or stance it took

15%

Spent money to support a company because of a

political stance

Boycotters Buycotters

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W E L L- E D U C AT E D, L I B E R A L , A N D W E A LT H I E R A M E R I C A N S A R E M O S T L I K E LY TO B OYC OT T

Each dot represents the share who say they have stopped buying the products or services of a company because of a political action or stance it took. For example, 50% of post grads say they’ve boycotted.

Generation

15% 30%20% 35% 45%25% 40% 50%

Ideology

Race

Gender

Income

Education

Community

Conservative

BoomersMillennials

Black

Under 50k

Moderate

Female

<College

Rural Suburban Urban

Bachelor’s Postgraduate

Male

Liberal

White

50k-100k 100k+

Hispanic

Gen Z Gen X

D E M O G R A P H I C B R E A KO U T: G E N E R AT I O N A N D I D E O LO G Y

Millennial and Gen X liberals are the most likely groups to boycott, while Gen Z moderates are the least likely. For example, 35 percent of conservative Boomers say they’ve boycotted, compared to just 23 percent of millennials.

C O N S U M E R AC T I V I S M

39% 47% 48% 42%

18% 24% 26% 21%

28% 23% 36% 35%

Liberal

Gen Z

Moderate

Millennials

Conservative

Gen X Boomers

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L I B E R A L S A N D C O N S E R VAT I V E S H AV E A N OTA B LY D I F F E R E N T R E L AT I O N S H I P W I T H B R A N D S

One of the key demographic trends that emerged from this survey is the gap between how liberals and conservatives understand their relationship with brands, particularly when it comes to politics. Consistently, political ideology is a bigger dividing line on key political brand issues than other central demographics, like age, gender, and race.

The data indicates that liberals are more likely to believe corporate America will be responsive to their interests. This shapes how they interact with brands, and what they expect in return.

Liberals say it’s

more common for

corporate political

stances to align with

their views.

5 9 % of liberals say that when corporate brands take political

stances, they often or sometimes align with

their own views. 41% of conservatives and 42% of moderates say the

same.

Liberals pay more

attention to political

issues relating to

brands.

2 1 % of self-described liberals say they pay

“a lot” of attention and another 46% pay some attention to political and

ethical issues relating to brands. Among

conservatives, 14% pay a lot of attention and 37% pay some. Moderates

pay even less attention.

Liberals are more

likely to take actions

like boycotting.

4 3 % of liberals say they’ve boycotted a brand for political

reasons, compared to 32% of conservatives,

and 22% of moderates.

C O N S U M E R AC T I V I S M

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T H E M O S T A N D L E A S T C O N T R O V E R S I A L I S S U E S F O R B R A N D S TO C H A M P I O N , BY I D E O LO G Y

If a company advocated or supported one of the following, this is the share of consumers who would have a more favorable impression, minus the share would have a less favorable impression.

Dark green indicates stronger support for the issue, and dark red is stronger opposition.

TA K I N G A S TA N D

60% 48% 66% 76%

23% 62% 32% -13%

20% 60% 22% -17%

46% 72% 49% 31%

22% 54% 26% -6%

0% 40% 5% -40%

-4% 44% -1% -49%

49% 60% 55% 44%

23% 62% 32% -10%

9% -43% 10% 53%

27% 53% 30% 10%

21% 60% 20% -17%

-4% -51% -6% 28%

-7% -50% -15% 33%

All adults Liberals Moderates Conservatives

The U.S. Military

Reforming the criminal justice system

The #BlackLivesMatter movement

The rights of racial minorities in America

The rights of transgender people

Affirmative action

Stricter immigration policy

Gay rights

The campaign of a Democratic lawmaker

Stricter gun control

Stricter policies preventing abortion

The #MeToo movement

The right of protestors to kneel during the national anthem

The campaign of a Republican lawmaker

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I M M I G R AT I O N I S A M O N G T H E M O S T G E N E R AT I O N A L LY D I V I S I V E I S S U E S F O R B R A N D S

By a net 18 point margin, Gen Z is opposed to companies advocating for stricter immigration policy. Boomers, on the other hand, are overall supportive of this stance by a net 23 point margin. That generational divide between Gen Z and Boomers is one of the largest on the 15 issues tested below.

If a company advocated or supported one of the following, this is the share of consumers who would have a more favorable impression minus the share who would have a less favorable impression.

Dark green indicates stronger support for the issue, and dark red is stronger opposition.

TA K I N G A S TA N D

60% 34% 45% 66%

23% 35% 23% 20%

20% 26% 22% 11%

46% 42% 41% 42%

22% 29% 23% 15%

0% 8% 13% -8%

-4% 21% 10% -8%

49% 35% 43% 46%

23% 21% 19% 17%

9% -18% 2% 16%

27% 17% 23% 24%

21% 33% 24% 15%

-4% -17% -7% -2%

-7% -16% -7% -7%

77%

18%

16%

50%

20%

-5%

-18%

56%

33%

23%

39%

14%

-2%

-3%

All adults Gen Z Millennials Gen X Boomers

The U.S. Military

Reforming the criminal justice system

The #BlackLivesMatter movement

The rights of racial minorities in America

The rights of transgender people

Affirmative action

Stricter immigration policy

Gay rights

The campaign of a Democratic lawmaker

Stricter gun control

Stricter policies preventing abortion

The #MeToo movement

The right of protestors to kneel during the national anthem

The campaign of a Republican lawmaker

R U L E S O F E N G AG E M E N T

B R A N D S S H O U L D G E N E R A L LY AV O I D E N G AG I N G W I T H T R U M P

Issuing a statement about Trump – whether positive or negative will draw more backlash than benefit. But among Brand Activists* the reaction is likely to be stronger if the statement is positive.

35 percent of Brand Activists say they would have a much more unfavorable view of a company that issues a positive statement, double the share who would have a much more favorable view.

If a brand issues a positive statement about Trump, here’s how consumers respond:

14%

18%

25%

35%

All adults

Brand activists

Much more favorable

Don’t know/No opinion

Somewhat more favorable

Somewhat more unfavorable

No differenceMuch more unfavorable

If a brand issues a negative statement about Trump:

16%

22%

21%

26%

All adults

Brand activists

T H E T R U M P C O N U N D R U M

* Brand Activists are adults who have taken one of the following actions for political reasons: stopped purchasing from a brand, spent money to support a brand, told friends or family members not to buy from a brand, protested a brand in person, posted something about a brand to a social media account or online, or protested a brand in person. This group comprises 47% of U.S. adults.

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C O N S U M E R S C LO S E LY T I E C E O S W I T H T H E B R A N D T H E Y R E P R E S E N T, B U T D O N ’ T F I N D T H E M TO B E PA R T I C U L A R LY E N D E A R I N G F I G U R E S

When executives take political stances, this survey indicates most consumers will understand them to be speaking for the larger brand. Seventy-five percent of Americans say CEOs represent the views of a company either a lot or some - that’s more than for the board of the company, a large group of organized employees, or other high ranking executives.

However the survey does not suggest that having this human face represent the brand provides a clear upside.

CEOs are trusted about as much as politicians (not much)

How much trust do you have in the following to do the right thing?

Politicians

16%

6% 5% 7% 6%13% 11% 15%

23% 22% 27%

36%45%

48%

CEOs of major

corporations

Government Corporate brands

Religious leaders

Community leaders

Non-profits

A lot Some

Conservatives are more likely to think CEOs are in touch with average Americans

How much do you think CEOs of major corporations represent the opinions of the average American?

All adults

Conservative

Moderate

Liberal

A lot Don’t know/No opinionSome Not too much None

7%

7%

8%

5%

21%

26%

21%

20%

13%

8%

10%

6%

39%

42%

42%

44%

20%

16%

19%

25%

TA K I N G A S TA N D

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T R U M P A N D S A N D E R S A M O N G T H E M O S T I M PAC T F U L W H E N I T C O M E S TO I N S P I R I N G B OYC OT T S A N D S H A P I N G B R A N D P E R C E P T I O N S

When President Trump calls for a bran boycott, 10 percent of consumers overall say they definitely would. An additional 27 percent say their perception of the brand would be impacted.

When it comes to inspiring boycotts, newcomer Alexandria Ocasio-Cortez has as much clout as progressive leaders like Bernie Sanders and Elizabeth Warren.

Donald Trump

Nancy Pelosi

Joe Biden

Kamala Harris

Mitch McConnell

Bernie Sanders

Alexandria Ocasio-Cortez

Elizabeth Warren

Charles Schumer

Kevin McCarthy

10%

8%

7%

6%

6%

6%

5%

4%

4%

3%

27%

30%

18%

23%

26%

22%

18%

15%

12%

9%

H O W 2 0 2 0 C A N D I DAT E S C A N A F F E C T C O N S U M E R V I E W S

Share would definitely boycott if each political called for it

Share who’s perceptions of a brand would be impacted by each politicians criticisms

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T H E M O S T I M PAC T F U L P O L I T I C I A N S BY D E M O G R A P H I C : T R U M P L E A D S W I T H O L D E R A M E R I C A N S , B E R N I E W I T H YO U N G E R O N E S

Overall, 30 percent of consumers say that their perception of a company would change if Bernie Sanders were to be critical of it. But among Gen Z and Millennials, that jumps up to 40 and 38 percent respectively,

meaning brands with an eye to younger consumers should be particularly mindful of his ire.

Share of adults who say their opinion would shift if the following elected official criticized the company:

H O W 2 0 2 0 C A N D I DAT E S C A N A F F E C T C O N S U M E R V I E W S

GEN Z MILLENNIALS GEN X BOOMERS

Bernie Sanders Bernie Sanders Donald Trump Donald Trump

40% 38% 26% 27%

UNDER $50K $50-100K $100K+

Bernie Sanders Bernie Sanders Joe Biden

29% 31% 29%

LESS THAN COLLEGE COLLEGE GRADUATE POST-GRADUATE

Donald Trump Elizabeth Warren Bernie Sanders

27% 36% 37%

LIBERALS MODERATES CONSERVATIVES

Bernie Sanders Joe Biden Donald Trump

54% 27% 43%

INC

OM

EG

EN

ER

AT

ION

ED

UC

AT

ION

IDE

OLO

GY