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How political boycotts impact brands

News, 03 August 2017
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NEW YORK: A quarter of American consumers have stopped using products and services due to boycotts, protests, or a company’s perceived political leanings, a study from Ipsos has revealed.

Based on a poll of 2,016 adults in February 2017, the research firm reported that the political preferences of consumers have an increasing impact on their buying behaviour – meaning marketers must be prepared to act in line with these trends.

“Politics and partisan identification is an increasingly central factor of how people see themselves. This trend, combined with social media, means brands can no longer just assume they will not get swept into the political fray,” said Chris Jackson, VP of Public Affairs/US at Ipsos. (For more details, read WARC’s report: How politically-motivated boycotts impact brands.)

More specifically, Donald Trump’s ascension to The White House has heralded a new era in which the tradition of businesses staying neutral (officially, at least) in the public realm has come under threat.

That outcome has resulted as hot-button issues – like immigration or US manufacturing – can spill over into the corporate world, and because the Commander in Chief frequently singles out brands for praise and criticism on Twitter.

In quantifying the impact of such shifts, Ipsos cited a long-term uptick in online search traffic for the term “boycott” – a development that has gained traction since Trump was officially elected to the executive branch in November 2016.

And it also found that the firms with the “highest rate of consumer boycotts” among a broad sample of companies also registered the worst stock market performance between November 2016 and February 2017.

Three of the four businesses that were hit hardest by these protests also logged declines of more than 15% in their market capitalisation.

One of main the perils awaiting brands that become embroiled in politics, voluntarily or not, is alienating swathes of buyers, especially as most large enterprises have a customer base that is split almost evenly between Republicans and Democrats.

“The main risk is losing a segment of your customer base. Ipsos’ research shows that most brands have customers from the right and left,” said Jackson

“With the strength of negative partisan identification [i.e. dislike of the other side], if a brand gets associated with one side, the other will very likely stop using its services.”

Data sourced from WARC

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