The effect of corporate political advocacy on brand perception: an event study analysis

Abstract

Purpose In recent years, brands have increasingly engaged in corporate political advocacy (CPA; also termed brand activism or corporate sociopolitical activity) by taking positions on polarizing sociopolitical issues. Recent experimental research suggests that consumers respond to CPA based on its alignment with their own values, and that it typically induces an overall negative response. This study aims to provide additional insights by exploring consumer brand perceptions following CPA. Design/methodology/approach An event study of 106 CPA events and weekly consumer brand perception data was conducted. A regression model was used to investigate the moderating effects of CPA effort, concurrence and the strength of the online protests evoked by the CPA. Findings The results show that CPA had a negative effect on consumers’ brand perceptions and that the effect was stronger for customers relative to non-customers. The negative effect was attenuated by CPA concurrence and amplified by effort. Additionally, online protests were driven by the CPA effort and had a strong negative effect on brand perception. Online protests were stronger in the past, and, in turn, the negative effects of CPA on brand perceptions have slightly weakened in recent years. Originality/value This study contributes to the existing literature by highlighting the role of online protests following CPA and distinguishing consumer and customer responses. This study also provides converging evidence of the moderating effects of effort and concurrence identified in previous studies.

Differential Response to Corporate Political Advocacy and Corporate Social Responsibility: Implications for Political Polarization and Radicalization

“…CPA has a more positive effect when viewed as authentic. Jung and Mittal (2020) Reviews literature on political identity, including measurement and relationship with outcomes across different stages of the consumer journey Reports perceived political identity of 50 popular brands Offers little evidence that satisfaction with a firm is related to the connection between the firm's and the consumer's political identity Not examined Klostermann, Hydock, and Decker (2022) Shows in an event study that a range of real-world CPA leads to a reduction in brand perceptions (attitudes)…”

BRAND ACTIVISM: A Literature Review and Future Research Agenda

“…First, it is crucial to identify 'who' takes an activist stand. Thus, as analyzed by many scholars (Schmidt et al, 2022;Bhargava & Bedi, 2022;Klostermann et 2020), and can be directed either internally or externally. In the first case, employees exercise pressure within the company to encourage it to take a position on specific socio-political issues; whereas, in the externally directed employee activism, they become the brand's delegates by taking a public stand on certain issues (Moorman, 2020).…”

“…Regardless of its exact definition, brand activism seems to be an intersection between politics and marketing (Jung & Mittal, 2020) where brands intervene and engage in delicate and controversial issues (Klostermann et al, 2022). As underpinned by Schmidt et al (2022), the choice to take a stance could be based on countless reasons: however, brands consider it primarily as an opportunity to differentiate from competitors by creating value for all stakeholders, both shareholders and non-shareholders.…”

“…Consumers are one of the main targets of brand activism and they are also causal variables of it (Preece, 2015), mainly due to their cultural and political ideologies (Flight & Coker, 2022;Klostermann et al, 2022;Neureiter & Bhattacharya, 2021;Hydock et al, 2020).…”

Impact of Global Brand Chief Marketing Officers’ Corporate Social Responsibility and Sociopolitical Activism Communication on Twitter

“…On the other hand, given the divisive nature of sociopolitical activism practices, firms are likely to create a polarized response across stakeholders (Bhagwat et al 2020; Gürhan-Canli, Sarial-Abi, and Hayran 2018; Hambrick and Wowak 2021). Anecdotal examples highlight the mixed views of stakeholders on global brands that take a stand on a controversial sociopolitical issue (e.g., reactions to the Gillette, Nike, and Chick-fil-A campaigns; Vredenburg et al 2020), and recent empirical studies reveal a negative effect on consumers (Klostermann, Hydock, and Decker 2021; Mukherjee and Althuizen 2020) and investors (Bhagwat et al 2020).…”