The do's and don'ts of ethical marketing

Forrester analyst looks at how brands have tackled ethical marketing and the pillars required for marketers to succeed

Strategy, operations and commitment are critical if brands wish to ensure their ethical marketing approach can cut the mustard with consumers, Forrester principal analyst, Xiaofeng Wang, says.

Speaking at this week’s Forrester CX APAC Summit in Sydney, the analyst shared dos and don’ts when building an ethical marketing approach, including practical examples from brands globally that have tried, succeeded or failed at the task.

Wang noted how commercially impactful an ethical approach to marketing can be for organisations. A case in point: Unilever’s eight sustainable brands grew 69 per cent faster than rest of the FMCG giant’s business in 2018.

“This shows when you do it well, ethical marketing can drive business growth. Companies can do good and do well at the same time,” she said. “It’s very important when marketers start their ethical marketing performance, to balance with financial performance and targets of the company as well.”

It’s not easy, however. Ethics can often end up in a competition with compliance, raising a dilemma for companies. An example she noted was from skincare brand, Nars, which was looking to enter the Chinese market in 2017. At the time, Chinese regulators required animal test for all skincare products. Yet Nars had a cruelty-free stamps across its products and promotions.

“Nas was facing this dilemma: Did they want to enter the market and comply with the regulation, which is not consistent with the company’s ethical marketing values?” Wang asked. “In this case, Nars decided the market was too big and important to overlook, so they decided to comply with animal testing requirement from the local regulator. That caused consumer backlash, who criticised Nars for forgetting about its brand values.”

Calvin Klein is another brand that’s efforts to be more ethical around diversity and inclusion, proved a challenge in the execution, this time in the balance between ethics and aesthetics, Wang said. In wanting to support inclusion, Calvin Klein embraced a broader standard of beauty, featuring a transgender, plus-sized, black model in its billboards. But at the time, mainstream consumers were not ready for that.

“To a lot of consumers who were not ready for these wider standards of aesthetics, it was not the Calvin Klein brand they used to like,” Wang said.

Similarly, Samsung’s 2020 TV commercial in Singapore showing a mum’s support for her drag queen child embraced D&I but got lot of push back from local community, who believed it wasn’t aligned with their religion. When Samsung pulled the ad, it triggered another round of backlash for Samsung, criticising it for not standing firm to support a cause it believed in.

“At a time when brands cannot please everyone, they have to stand firm, to stick to the causes they believe in and embrace consumers who also firmly believe in these values,” Wang said. “Or they please the majority of the audience. There’s a difficult brand decision to be made on their own. Not every brand will make the same decision – no standard answer for every brand.”

Another complex element in the ethical marketing equation is localisation, and Wang pointed out consumers in different markets may share values but perceive the same issue differently. The #blacklivesmatter movement, for instance, was popular in the US and western countries, but not in China. In one case, toothpaste brand, Darlie, which features a black person on its packaging, boasted of very positive sentiment with consumers, who believed black people have great white teeth.

“The rebranding was seen as an overcorrection – consumers liked it to keep the brand name because it showed the brand history as well,” Wang said.

The dos and don’ts

So how do you try and navigate this when starting your ethical marketing initiatives? Wang articulated three key pillars: Strategy, operational process, and community commitment.

Ethical marketing strategy is about defining what is ethical to your company and brand. This needs to encompass teams and other parts of your organisation and connect the dots between marketing and engagement and the wider business.   

“It’s important to stick to your own brand values rather than chase which value is more popular,” Wang cautioned. “Our data shows consumers prefer brands that hold onto their own values rather than chase the trends. For each brand in the same sector, the values they want to highlight in their ethical marketing initiatives or campaigns can be very different.”  

For example, shoewear brand, Toms, supports children in poor countries who can’t afford to buy their shows through a one-to-one product donation campaign. Whereas fellow brand, Allbirds, focuses on sustainable materials and supply chain practices.

Wang also warned marketers to beware of greenwashing – both in their communications, but also in the way sustainability initiatives are perceived by consumers. This is particularly problematic for fast fashion, she said. The nature of the business model means it’s less sustainable. But it doesn’t mean these brands aren’t pursuing sustainability or ethical marketing.

“H&M is using more sustainable materials, and Shein uses AI and machine learning to predict the exact number of items to design to sell to reduce waste material and improve efficiency of the supply chain. These are very effective and important initiatives to support sustainability,” Wang said. “But in terms of marketing messages and campaigns, consumers just don’t buy it.”  

This disconnection is often because the communications brand send out don’t match the actual actions they’ve been doing. It’s for this reason that message and specific actions must be united as well as succinct, Wang continued.

“When coming up with marketing messages, it has to be very cautious. It can’t be a shallow commitment, such as ‘we believe protection of the Earth’. That’s not enough for green consumers, who are very empowered and smart today.

“Your action cannot be deceptive… nor can you just be responsive when environmental support groups criticise you and then you start to react,” she said. “Initiatives have to be very proactive.”

Ethical marketing also has to be operationalised. For that, Wang said marketers need to systematically embed ethics into their marketing process end-to-end. Again, she pointed to Unilever’s efforts to break down stereotypes with structural change across the marketing and advertising ecosystem as well as product development and production as a strong example.

Another brand that’s working towards this goal is Reckitt-Benckiser, which instigated organisation-wide ethical marketing principles training to empower teams with better capabilities. To date, more than 6000 staff have completed the training, from marketing to compliance, legal and product teams.

“You need to truly connect to your ethical beliefs and initiatives. And this needs to be ongoing, rather than limited to special occasions. It’s not just a campaign,” Wang continued.

So don’t do what Alibaba did, which was create a green shopping channel showcasing green appliances, food and clothing on its site only for the duration of a shopping festival. By contrast, Adidas provides sustainable options whenever consumers go onto its site or app in order to search and explore products.

Finally, Wang stressed the importance of showing community commitment. “You have to constantly reveal what you have achieved, as well as mistakes and areas where you can do better,” she advised.

“Then come up ways on how you can improve, what lessons you have learned, how you can do it more effectively, efficiently and how you can interact and attract customers better.”

She highlighted Ace & Tate, a B Corp company, as following this path. The organisation publishes an annual release on sustainability each year reflecting on what they haven’t done well and how to improve. One such case was using bamboo in eyewear cases which are harder to recycle. So Ace & Tate switched to using recyclable plastics for eyewear cases. Another learning was too much insistence on reducing carbon emissions but overlooking water pollution. In response, Ace & Tate set more balanced KPIs for both.

“This shows commitment, and it’s very transparent. And you’ll earn trust and long-term loyalty from customers as well,” Wang added.

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