By Glyn Atwal and Maya Kaiser
The Covid-19 pandemic represents both challenges and opportunities for brand marketing. Spreading rapidly around the globe, the novel coronavirus affected every level of society and nearly every facet of everyday life, imbuing everyday activities with a sense of fear and uncertainty, but also instilling a renewed concern with solidarity and altruistic values. Meanwhile, confinement measures and shifts in consumer behavior forced many businesses into hiatus and vastly limited their ability to reach their target market. Consumers evinced a shift in priorities: for many, the pandemic led to a re-evaluation and a desire to return to fundamental values.
What this has meant, for organisations, is a knot of marketing challenges. Few have ignored the crisis entirely. Some were reduced to marketing in absentia, reassuring customers of their continued existence. Others struggled to strike the right tone between their typical brand voice and the need to show a concern about the crisis. Many companies chose to show visible support for coronavirus relief efforts, with positive results: companies distributed masks, donated to worthy causes, or switched to manufacturing PPE and other essential supplies. Luxury companies in Europe elicited positive media coverage by providing direct support to health services: in March 2020, when the WHO declared Covid-19 a global pandemic, LVMH announced that it was devoting its perfume production lines to making hand sanitiser for French hospitals; Prada manufactured 80,000 medical overalls and 110,000 masks to distribute to healthcare workers in Italy. Other efforts, however, have been met with public backlash: Adidas and Primark are among the brands that faced a negative response when their contributions to relief efforts were deemed hypocritical. In all cases, ‘marketing as usual’ was not an option.
Crisis marketing represents a clear opportunity for brands to stand out through positive ethical engagement. Companies can deploy social marketing strategies as they integrate “good citizenship” within their corporate governance model (Maignan and Ferrell, 2000); their moral commitments can enhance their perceived value as well as their economic value creation (Pies et al., 2009). Yet crisis marketing also entails risks, as brands may be perceived as opportunistic, inconsistent, or insufficiently engaged. How companies respond to crises can become defining moments in their public image.
This is particularly the case because of the increasing speed and amplitude of public responses via social media. Consumers can now instantly take to Twitter or Instagram to denounce brands for not living up to their stated values. Social media can amplify positive responses, but it can also create a social media backlash, as “call-out culture” empowers consumers to share critical responses whether or not a company’s actions directly affects them.
We stress the need to understand which types of social purpose marketing lead to negative vs. positive stakeholder responses. We identify key dimensions that shape stakeholder opinion concerning companies’ actions in response to Covid-19. When initiatives are perceived to be on the positive or neutral side of any of these dimensions, they are likely to benefit the company’s public image. When actions are on the wrong side of one of these dimensions, however, companies run the risk of being perceived as instrumentalising their actions to manipulate public opinion — what Ferrón (2020) describes as “coronawashing”. This has ramifications not only for crisis communications but for “good citizenship” more generally, which is becoming increasingly essential to business practices as a younger generation of consumers expects companies not to stand back from social issues.
Beyond the moral cause
Social purpose marketing provides an opportunity for companies to develop “competitive agility” (Accenture 2018a, p.3), standing out to stakeholders through positive social engagement. While this kind of marketing is valuable at any time, it can provide a number of performance advantages at times of crisis, when companies may be under increased scrutiny as well as having immediate and evident opportunities to make positive contributions. Companies that employed social purpose marketing in the two months after Covid-19 was declared a pandemic are likely to see performance advantages across several categories, with both short and long-term implications.
- Brand affinity. This is, in a broad sense, an emotional connection a customer feels towards a brand. In extreme cases, this can extend to powerful feelings of brand love (Carroll and Ahuvia 2006). Corporate Social Responsibility (CSR) has been shown to have a positive effect on brand love (Vlachos and Vrechopoulos, 2012), suggesting that social purpose marketing in the context of the pandemic could elicit positive feelings of brand affinity. As the Covid-19 outbreak worsened and health workers had to work long hours in dangerous and difficult conditions, often with insufficient personal protective equipment (PPE), numerous companies found ways to engage in initiatives supporting and honoring healthcare professionals, like Budweiser’s “One Team” in support of the American Red Cross. Pepsi and Global Citizen sponsored a livestreamed concert organized by the WHO to support healthcare workers and aid organizations, “One World: Together at Home”. Brand initiatives sometimes had immediate measurable effects: after General Motors (GM) announced a partnership with Ventec Life Systems to produce and supply ventilators on March 27, 2020, GM’s BrandIndex Buzz score (also known as the Net Sentiment score, a metric to gauge the intensity of brand affinity calculated by asking respondents if they have heard anything positive or negative about a brand and subtracting the percentage of negative responses from the percentage of positive responses) rose by 50 percent in just over a week (7 April 2020) (YouGov, 2020).
- Purchase Intention. Positive brand attitudes are likely to translate to consumer behavioural intentions, meaning that consumers will favor companies that took positive action against the pandemic. According to YouGov Direct data, 60% of Americans are more likely to purchase from a company that has aided in the Covid-19 pandemic (YouGov, 2020). In France, a PWC study found that 62% of consumers plan to support businesses that suffered or took positive action during the confinement (PWC, 2020). Similar findings emerged from a twelve-country online survey, where 65% of respondents agreed that how brands respond to the coronavirus crisis will have a significant impact on future purchase intention (Edelman, 2020). Interestingly, this was higher for China (88%) and India (79%), suggesting that consumers in emerging markets are more likely to reward or punish companies for their coronavirus-related marketing initiatives.
- Investor sentiment. Investors are increasingly using criteria such as the environmental, social and governance (ESG) rating system to determine investment decisions. According to Firestone (2020), more than one third of global equity assets use some form of ESG screening in their investing practices. A reasonable inference is that companies which invest in coronavirus social initiatives may benefit from a higher ESG rating and better investor sentiment. A Reuters Events Survey (2020) of asset managers, asset owners and other stakeholders found that 74% of respondents claimed that the Covid-19 situation has hastened the adoption of ESG into mainstream investment policy, suggesting that social purpose marketing during the coronavirus pandemic is likely to have a long-term impact on investor sentiment (Stoxx, 2020).
- Employee Engagement. Cause-related marketing has been shown to enhance employees’ admiration for their company, which in turn promotes engagement, sense of purpose, and identification with a company’s mission (He et al., 2019). Brand love can be a motivating factor not just for consumers but for employees as well, with positive behavioural implications (Wang et al., 2019). In a global online survey, 63% of respondents said employee engagement had increased during the Covid-19 crisis (The Institute for Public Relations, 2020). It was reported that a contributing factor was a sense of ‘we are in this together’. During the coronavirus pandemic, a number of companies engaged in social purpose marketing directed towards their workforce: for instance, companies like Walmart, Microsoft, Apple, and Lyft announced that they would continue paying US hourly workers during the initial weeks of the lockdown. CSR and ethical initiatives of this kind also have broader implications for organisations to attract and retain talent, as millennials expect employers to have a social purpose (BCG 2019).
- Trust capital. This can be defined as consumer confidence in the integrity and responsibility of an organization to deliver promises of value to stakeholders (Light and Kiddon, 2015). The willingness for companies to invest in coronavirus social initiates can be viewed as a longer-term strategy to preempt reputational loss in the event of a crisis. Companies which deliver a social purpose benefit from greater robustness in the face of crises: their trust capital makes it more likely that consumers will forgive them for future ethical transgressions. However, as we show below, this could be deemed ineffective when the ethical transgressions coincide with the positive actions.
A double-edged sword
Although the business case for social purpose marketing strategies is apparent, it is not without risks. Companies which engaged in social actions during the initial months of the Covid-19 pandemic were not universally praised: some faced harsh backlash for actions perceived to be hypocritical, insufficient, or ill-judged. As Buck (2020) warned about acting during the crisis, “The rewards for good behaviour in febrile times are likely to be considerable, but so are the risks for companies that fall foul of the public mood.” The perception of what Ferrón calls “coronawashing” led to increased scrutiny of some companies and necessitated swift corrective action to reduce reputational damage.
Coronawashing
The concept of “coronawashing” describes “the biased disclosure of information on the company’s actions developed to address issues related to Covid-19” (Ferrón, 2020). Drawing on earlier notions of CSR-washing, it includes the deployment of solidarity initiatives to change image perception during the crisis. Zatoński et al. (2020) provide the example of tobacco companies which “ostentatiously behave like model corporate citizens in their CSR efforts around the coronavirus crisis, [while] behind the scenes they aggressively push back against emergency public health actions to reduce coronavirus transmission.”
We define coronawashing as an opportunistic strategy for companies to capitalize on the coronavirus crisis to leverage positive stakeholder impressions whilst failing to deliver ethical coherence. Coronawashing need not result from deliberate deception or attempts to mislead stakeholders, but emerges from perceived moral contradiction.
Two examples of companies that faced backlash for their social purpose marketing during the pandemic are particularly instructive.
Primark
Primark is one of the leading fast-fashion retailers in the UK, with outlets around the world. Shortly after the pandemic was declared, the company donated 400,000 of its products to frontline workers, volunteers and patients globally, including 74,000 products delivered to the NHS Nightingale Hospital in London (Primark, 2020). Despite generating positive stakeholder impressions, the company was criticized in the media as one of several high-profile companies which made no commitment to pay in full for orders completed and in production (Workers Right Consortium, 2020).
Adidas
In March and April 2020, nationwide confinement measures in Germany resulted in the temporary closure of non-essential retail stores. As a result, German sportswear group Adidas, which had reported almost €2bn in net profit in the 2019 financial year, decided to suspend rental payments on its own-brand retail outlets. Although the decision was deemed legal, the company came under severe criticism. Separately, Adidas had introduced a number of coronavirus-related initiatives, offering free premium access to its training and running apps (March 2020) and collaborating with Carbon to produce 3D-printed face shields (April 2020). The contrast between these initiatives and a perceived attempt to raise profits at all costs led to negative public responses. Adidas subsequently reversed its decision and announced that it would pay rent on its stores.
Behavioral Outcomes
What these examples suggest is that CSR should be reframed beyond the traditional economic, social, and environmental categories to include a holistic focus on the impact and perception of their actions. Brands which act unethically or irresponsibly may be accused of corporate social irresponsibility, leading to anti-consumption, when individuals consciously make the decision to reject a specific brand or organization.
This supports research findings that moral or ethical factors can trigger an anti-brand reaction to various degrees of animosity. Thus, the perception of coronawashing could have lasting implications on a company’s public image, the emotions it evokes, and its relationships with consumers, employees, investors and other stakeholders.
- Brand avoidance is defined as “the incidents in which consumers deliberately choose to reject a brand” (Lee et al., 2009, p.170). If coronawashing leads to a breach of trust, brand avoidance will be an inevitable outcome. This is not an abstract problem: in a study of over 7,000 companies, Accenture (2018a) found that so-called trust events had a direct impact on future revenue losses of US$180 billion in total. That coronawashing should be a cause of concern is evident in consumer responses: an Edelman survey found that 71% of respondents agreed with the statement, “Brands and companies that I see placing their profits before people during this crisis will lose my trust forever” (Edelman, 2020).
- Brand retaliation is to attack or take revenge on a brand (Gregoire et al., 2009), an escalation of negative sentiments which can result in boycotts, call-outs, and other anti-brand behavior. A 2017 Edelman Earned Brand survey of 14,000 people in 14 countries found that 57 percent of consumers claim they will boycott a brand solely because of its parent company’s perceived position on a social or political issue (Edelman, 2017). Significantly, the most valuable brands attract more anti-brand hate attention online than less valuable brands (Kucuk 2008). Brand retaliation was a factor in the case of Adidas and its response to the coronavirus pandemic: calls to boycott Adidas (#BoykottAdidas, #niewiederadidas) trended on German social media, and a German member of parliament even filmed himself setting an Adidas shirt on fire.
- Negative Word of Mouth (NWOM). The term “amplification” has been widely used in a social media context to define “an inherently social motivator that spurs broader engagement and sharing” (McKinsey & Co., 2012). Negative attitudes are more likely to be disseminated through social networks (Allsop et al., 2007). Fan et al. (2014) found that angry emotions spread more quickly and broadly on Chinese social media network Weibo. This type of response can be particularly toxic to brands as it gains momentum on social media. This was likely accelerated during the pandemic as social distancing and confinement measures meant consumers had few other ways to share opinions about brands. Edelman (2020) found that 33% of respondents agreed with the statement, “I have convinced other people to stop using a brand that I felt was not acting appropriately in response to the pandemic.” Significantly, this was higher for China (76%) and India (60%). Consumer calls to boycott Adidas were amplified by German politicians, celebrities and columnists taking a position either to openly criticize or boycott the company.
Conclusions and Managerial Implications
There is strong evidence that consumers globally want companies to take a stand on social issues, aligning their own personal values and beliefs with those of the brands they buy (Accenture, 2018b). Edelman (2018) has identified 64% of consumers in an eight-country study as so-called “Belief-Driven Buyers”. The far-reaching consequences of the pandemic meant that ignoring it was hardly an option.
Coronavirus marketing initiatives provide an important marketing opportunity for companies to demonstrate their purpose. However, brands are under greater stakeholder scrutiny and authenticity evaluations provide a mechanism to explain the perception of social marketing initiatives. Inauthentic evaluations as in the case of coronawashing which can be perceived as “a shortcut to brand self-awareness and vague corporate caring” (Rickett, 2020) can result in reputational damage and impact business performance. This raises the question: how can companies avoid becoming a victim of its own social marketing strategies?
To avoid accusations of “coronawashing”, executives can consider the following guidelines of best practice: i) Alignment. A perceived lack of alignment between a company’s actions and social responsibility can be considered as a critical gap. Perceptions of profit-seeking at all costs can cause long-term stakeholder resentment; ii) Usefulness. Aid initiatives such as fashion brands manufacturing gowns and face masks were coherent with their core activities. Coronawashing accusations may result when actions are perceived as being irrelevant, unnecessary or ‘vanity’ actions; iii) Integrity. The perception that companies are shirking responsibilities can lead to a negative perception. Actual commitment and engagement are core to all social marketing activities.
Natural disasters and tragedies in the past decade have increasingly attracted CSR efforts, as companies rush to support aid efforts, donate money and materials, and make other visible contributions. Hurricane Katrina, the Notre Dame fire, and more recently, shortly before the Covid-19 pandemic, the Australian bushfires, were all times of increased CSR visibility. Yet it is not enough to do something, and to be seen to do it: the perception of alignment, usefulness and integrity all contribute to the way stakeholders evaluate social marketing initiatives, and the company’s social reputation as a “good citizen”.
Moral authenticity needs to be the cornerstone of any purpose-driven marketing campaign. At its most extreme, coronawashing may be viewed as a breach of a moral contract between business and society. Managers therefore need to ensure that there is consistency between core values and social actions. A failure to deliver authentic integrity is a failure to demonstrate purpose.
About the Author
Glyn Atwal is an Associate Professor of Marketing at Burgundy School of Business, France. He conducts research on brand management and is co-author of Luxury Brands in China and India (Palgrave MacMillan).
Maya Kaiser is a digital anthropologist based at the Burgundy School of Business, France, whose research looks at influence and emotion in politics, marketing, and social media. She is currently writing a book on social transformations in China.
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