Why Companies Should Split Their Purpose in Two

It’s been a season of disquiet for Target and Bud Light. The retailer and beer brand have seen sales decline in recent months due to boycotts over their respective LGBTQ+ merchandise and marketing efforts. Each company’s reaction to the backlash—Target stopped selling certain products; Bud Light didn't voice support for its transgender brand partner Dylan Mulvaney—only made things worse, upsetting consumers on the other end of the political spectrum. So far this year, Target’s share price has underperformed compared with the S&P 500. The same goes for Bud Light’s owner, Anheuser-Busch InBev. Events like these have made many marketers pause to think about their approach to brand purpose. The topic was certainly on people's minds at Cannes Lions, where even AB InBev’s chief marketing officer Marcel Marcondes took a few minutes out of his presentation on how creativity drives growth to address Bud Light’s troubles. “When things get divisive and controversial so easily, I think it’s an important wake-up call to all of us marketers to be very humble,” Marcondes said before a full theater in June. Given the capricious nature of social media and its power to influence what people do, it's unclear which brand a segment of the population might choose to boycott next. Meanwhile, consumers are showing less enthusiasm for brands weighing in on social issues, according to a survey published in the Wall Street Journal. https://twitter.com/libsoftiktok/status/1691576613165785229 Purpose evolves For Mark Sinnock, global chief strategy, data and innovation officer at Havas, the latest happenings are a sign it's time for brand purpose to grow up. Risk of a social media-fueled boycott aside, consumers are skeptical of the marketing tactic. About three in four U.S. adults believe brands only take a stand on sociopolitical issues to generate more sales, according to a recent survey. If revenue begins to decline, most shoppers expect these brands to reverse course. At the same time, however, people do want companies to be good citizens. They want corporations to treat employees with dignity and protect the environment. Thanks to the internet, information is available to find out who is and who isn't. The best way to embrace all of this, according to Sinnock, is to redefine purpose as two distinct strategies, then assign one to the brand and the other to the brand's parent corporation. Here's how it works: A brand's purpose is to make the individual customer's life better. That can mean providing fun and entertainment through humorous memes about gum. It can mean helping someone feel confident with stylish boots. It's about offering surprise and delight, comfort and security. Caring and selling are two different things.—Mark Sinnock, global chief strategy, data and innovation officer, Havas According to research from Havas, 71% of consumers around the globe think brands should be doing more to improve and support people’s health and well-being. The brand's parent company, in contrast, should tackle the complex social issues. It should establish a sustainable supply chain and pursue diversity, equity and inclusion in the workplace. It should donate money to causes it cares about, whether that involves advocating for reproductive rights or building an ice skating rink for families in the local community. Unlike a brand's purpose—which the public hears about through ad campaigns—a corporation should not make a big show of its purpose. Most people have a cynical reaction to these announcements. Businesses should therefore choose taking action over broadcasting promises. Consumers interested in learning what a company stands for can look into it on their own time. "People want to know businesses are doing the right thing for the planet and for people, but they don't necessarily want that advertised to them," said Sinnock. As he put it, marketing is for selling products, not for showing shoppers you're concerned about the state of the world. "Caring and selling are two different things," he said. "We're starting to mix them up a bit." Brand purpose under scrutiny In recent years, the conventional notion of brand purpose has come under fire in other ways. As consumers continue to pay higher prices for everyday goods and services, figures from McKinsey & Company suggest people's priorities are shifting from purpose to value. In October 2020, 34% of U.S. shoppers said they tried a new brand because it was purpose-driven. In February 2022, that number was cut in half. Value-driven purchases, meanwhile, have increased from 58% to 67% during the same time period. Investors have also expressed discontent. Unsatisfied with Unilever's performance, investment management firm Fundsmith rebuked the consumer goods manufacturer in a 2022 letter to investors for being "obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business." Fundsmith didn't stop there. It also scolded Unilever for giving its condiment brand Hellmann’s a new mission to reduce food waste. "A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot," the letter reads. "The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches)."

Brand Purpose

Why Companies Should Split Their Purpose in Two

A new approach would separate corporate from brand, caring from selling

Paul Hiebert

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Paul Hiebert