Is virtue helping or harming your bottom line?

Opinion: 100% Media 0% Nonsense

Ethical practice and profitability are not mutually exclusive, but do advertisers and media owners have enough bandwith to achieve both well?

There was a time when it would have been unthinkable for someone to be rejected a bank account on the basis of their political beliefs. But the recent row between Nigel Farage and Coutts has exposed just that — a recent phenomenon of so-called “woke capitalism” in British business, where companies prioritise social issues over their core purpose of creating wealth and jobs. And advertising and media have become the vanguard of so-called woke capitalism.

Whether you love or loathe Farage — other than being an appropriate question for an IQ test — would simply not have mattered to a business that essentially provides a utility service. There are just some things that everyone in society should have, even the cartoonish demagogues among us.

But something has changed in society whereby media companies and advertisers are not just more comfortable with having purpose or progressive messages as part of their brand or corporate agenda, but are positively committed to being more than just a money-making organisation.

Woke or wealth?

Progressives will celebrate this is a win for modern capitalism: rejoice as the once invisible hand of the market is now warmly jacketed in a glove of conscience. Liberal purists could also interpret this as business responding to the market. According to Accenture, 62% of consumers want companies to take a stand on current and broadly relevant issues like sustainability, transparency, or fair employment practices.

Maybe that’s why, according to a study by Kantar, purpose-led brands have experienced a brand valuation increase of 175% over a period of 12 years before the pandemic, compared to an increase of just 86% for non-purpose-led brands.

But this shift to wokery, if we must call it that, is not cost-free. Aren’t corporations imposing unnecessary restrictions on themselves? It’s one thing to have progressive environmental and social policies, but should it be a central part of their marketing messaging or media-investment decisions? When did it become their job to sort out society’s ills, beyond the ambit of elected governments and regulators?

Turn on your TV during primetime and see this for yourself. Advertisers that produce off-the-wall, funny or joyful ads have been in decline for a long time, and this was made worse during the Covid-19 pandemic. This is not just a UK phenomenon: that 28 of the 32 Cannes Lions Grand Prix winners last year had “purpose” at the core of their marketing message, according to IPA effectiveness director Laurence Green.

We’re also seeing it in the types of agencies that are being launched. Last week saw the launch of The Responsible Marketing Agency – a business that does exactly what it says on the tin: “a new breed of specialist with a mission to help media, digital and marketing clients to realise sustainable growth through responsible and progressive practices.”

It’s not an entirely novel venture: Media Bounty has been around for 15 years and other progressive agencies have launched since then such as Good-Loop (an ad agency that focuses on purpose-driven advertising, and uses ad revenue to support social and environmental causes) and Brand Advance a media-planning agency that focuses on reaching underrepresented audiences in advertising.

Ethical practice and the bottom Line

So I asked Hannah Mirza, the agency’s founder: why do you see it as an advertiser’s place to take a stand on ‘ethical’ issues when they should ultimately be focused on making their business as profitable for shareholders as possible?

Ethical practice and profitability are not mutually exclusive nor incompatible, she argues, describing this current trend as “conscientious consumerism”.

“The rise and rise of social exposure for getting it wrong also presents greater risk to a company’s bottom line,” Mirza warns. “While ethical practice in the past may have been superficial, reputational risk from informed consumers means it’s those who are doing it properly is endemic to their ways of working who are at a tipping point of win-win on both fronts of ethics and profitability.

“Getting it wrong” and “reputational risk” are essentially the products of the Twitterati, as I talked about in my last column about the rise and imminent demise of Twitter. The microblogging platform may have failed to achieve the Facebook-like scale needed for consistent profitability, but its huge societal influence over advertising in the last decade is clear: brands are in constant danger of being mobbed by an angry Twitter mob for whatever “getting it wrong” entails.

You may feel, as Pamco CEO Simon Redican does, that woke capitalism is front and centre in this industry’s trade press, too. Quoting a recent piece about this trend, Redican said: “this rings so true when you visit most advertising and marketing events which feel more preoccupied with solving societal issues than commerce — given we generally encourage consumption it can smack of virtue signalling.”

He later qualified this by suggesting “it’s a question of balance.”

“Some of these issues are critically important but some are outside of the scope of our business to impact and my sense is we focus on them too much when we should be focussing on business outcomes for clients — who are equally responsible,” Redican says.

(Judge for yourself — check out our recently-released agenda for our flagship conference The Future of Media, which is back in October. Too woke? Too wonky? I would love to know what you think.)

Purpose-driven profits

There is always a sense that ESG is only ever a concern of the privileged because they don’t need to worry about rising energy bills and mortgage bills. Jason Brownlee, founder of Colourtext, yesterday cited a recent survey in New Zealand that found that, while many people consider sustainability a concern, they may not be fully committed to, for example, environmental policies when they conflict with other core priorities, such as economics and health.

How fortunate then for agencies like TMS and its ilk that marketers are generally a privileged bunch.

Ultimately Mirza is right: ethical practice and profitability are not mutually exclusive nor incompatible. And maybe media owners should generally be more vocal when it comes to issues that really matter, such as the environment, wealth inequality, or inclusion. But this seems like a lot to ask when businesses should (legally obliged, let’s not forget) to be focused on making their shareholders money.

Because if we’re all singing from the same hymn sheet all the time, how’s a brand going to stand out?

Omar Oakes is editor of The Media Leader and leads the publication’s TV coverage. ‘100% Media 0% Nonsense’ is a weekly column about the state of media and advertising. Make sure you sign up to our daily newsletter to get this column in your inbox every Monday.