Do all brands with purpose outperform the market?

An unusual point of view about the political bias of the advertising industry is presented by Steve Harrison in his recent book ‘Can’t sell, won’t sell- Advertising, politics and culture wars. Why adland has stopped selling and started saving the world’

Harrison has an unique argument to explain why creativity is in decline: it is not only due to the increased importance of digital, which allowed short-termism to replace long-term brand building, but also due to brand purpose serving more the needs of the advertising industry rather than its clients’.

Here is a summary of his thesis: the advertising industry gave up selling and is instead on a mission to save the planet. “Brands are no longer to be promoted on the fact that they clean your whites whiter, but on their power to make your conscience cleaner. Being a force for good is the new purpose of brands and those who market them to the public. Creatives know that they have little chance of winning a Lion unless they submit a purpose-driven piece”.

His main argument is that trust in advertising is in long term decline because of a decline in creativity, which is due primarily to the fact that the advertising industry is creating ads for themselves: social purpose is based on the assumptions and needs of the advertising and marketing industry. Advertising main role is not anymore to sell; purpose became the main reason of advertising, instead of remaining a secondary, supporting reason to buy. He gives the example of the advertising alliance with XR (Extinction Rebellion), an anticapitalistic movement that promotes degrowth, or demand reduction, the opposite of what advertising is supposed to do. “To halve CO2 emissions, we will have to unsell society as we know it. An austerity in the name of the planet.” Degrowth will bring an end to progress itself- the steady expansion of freedom for all humanity.

The liberal left no longer shares the economic and social interests of the people for whom it used to speak, providing conservatives with more evidence that their mores, values and traditions are under attack.

This created the ‘woke washing’ trend - when the connection between social purpose and brand idea is not credible. Why do advertisers do that? Because strong campaigns are difficult to do: you need to do research, write the brief, come up with a creative idea and execute it properly. What if the consumers realize that the brands are only adopting these causes because their research tells them to? On the other hand, as brands struggle to find a cause that hasn’t been already adopted, they miss the fundamental objective of differentiation and distinctive assets.

But do brands with purpose really outperform the market? On one hand, we have hugely successful brands and companies like Nike, Apple, Adidas, Red Bull, Procter&Gamble, to name just a few, which have a cause and effect relationship between financial performance and their ability to connect with fundamental human connections, hopes, values and greater purposes.

On the other hand we have Volkswagen dieselgate case: VW cheated carbon dioxide emissions in US and got away with it, its market share growing again.

We also have we have Benetton, Body Shop, and Toms.

Toms (which popularized the one-for-one business model by giving away a free pair of shoes to poor children for every pair sold) is out of fashion. According to the Economist, handing out aid in kind could suck life from local markets, and foster a culture of aid-dependency.

L'Oreal sold Beauty Shop, after its 11-year ownership, for the same amount it bought it, after a lacklustre performance of the ethical skincare brand.

Benetton, an Italian brand famous for its “United Colors” ad campaign of the 80s and 90s, was amongst the first to address diversity and multiculturalism head on. It won the Press Grand Prix award at the Cannes Ad Festival for its UNHATE campaign, which featured political and religious leaders like the Pope, Barack Obama, and Hugo Chavez kissing each other; but its sales are in decline for many years as the group became trapped in a style no man’s land, too costly to be classified as fast fashion and not glamorous enough to be luxury. In the same time, the shock ad campaigns started to look pointlessly provocative.

Perhaps having a brand purpose is not enough: a solid strategy, combined with distribution power, consistent advertising that combines both short and long term, great execution and, last but not least, a great product will greatly enhance the chances your product will succeed in the market place.