The Notebook: Ian Whittaker on brand activism, the price of streaming and why you should give the 5am wake-up call a try
Where the City’s movers and shakers get a few things off their chest. Today, it’s leading City analyst Ian Whittaker
Why businesses now have another worry on their list: the politics of their consumers
The story of Bud Light is set to become a textbook classic of marketing courses everywhere. For those who are not up to speed with the details, Bud Light launched a marketing campaign in April with transgender activist Dylan Mulvaney to promote its beer. Within days of the campaign, a conservative-led boycott began, which has led to a 25 per cent year-on-year drop in sales and Bud Light losing its number 1 position as America’s best-selling beer. So far, there are no signs of a recovery in sales or trends.
Bud Light has been held up as an example of how the culture wars are now becoming major business issues for companies. Others have been hit. Target has seen its share price – and sales – impacted by a consumer boycott in response to its Pride month campaign. Meanwhile, Disney has been in the firing line of Florida Governor, Republican Ron DeSantis.
The general rule of thumb used to be that consumer boycotts were generally ineffective, didn’t last long and only had a marginal (if that) impact. There is still evidence to support that case. Nike also used Dylan Mulvaney in an advert for sports bras, received criticism but did not see an impact on its sales. However, the rise of social media, the polarisation of politics (particularly in the United States) and the rise of cultural wars seems to be changing the dynamics.
Will this trend continue? The combination of a presidential election and the success (in terms, to some) of the boycotts is unlikely to cool the temperature. Those most at risk would be those ‘everyday America’ brands with clear substitutes. I think there is less chance in the UK but, as the Natwest debacle over Nigel Farage showed, political concerns – and reactions – are rising here too. It’s one more thing for businesses to think about – as if business was not complicated enough.
The price of streaming
The penny is dropping: the continual growth in video streaming subscriber numbers is slowing down. The focus has switched from increasing the number of customers to trying to extract more money from existing ones, whether that be by direct ways in the form of price increases, or indirect ones, such as a crackdown on sharing passwords. In a cost of living crisis, it will be interesting to see how that works.
Consumers already look to be adapting their behaviours – a recent Deloitte survey found 44 per cent had cancelled their service in the past six months with 24 per cent then renewing their service, suggesting a propensity to switch on and off when it came to watching. Could there be mergers on the horizon for unsustainable businesses?
Interest rate rises aren’t always the right tool
There is a natural inclination for central bank policy makers to reach for interest rate rises when they hear the word inflation – but it’s hard to see how raising interest rates offsets rising commodity costs caused by the war in Ukraine or issues with global supply chains.
Yes, asset prices certainly boomed during the free money era, but the central banks generally seemed quite content with that type of inflation. Central bank policy makers are not only using a blunt tool but also one that both seems ill-equipped for the job and impacts poorest households the most. There is a case post-crisis to take a long hard look and consider not leaving such decisions to economists alone.
Give the 5.15am wake-up call a go
One of the more benefits of working in the City for 20 years is the habit of waking up at 05:15. I have continued that post-City life and there are very few feelings better than getting to 8am and already having accomplished much during the morning, whether that would be exercise, things to do or even just plain going for a morning coffee and contemplating the day. I recognise it is not everyone’s cup of tea but if you do not do it, try and see what you think.