Deep Connections Through Purpose

The following is republished with the permission of the Association of National Advertisers. Find this and similar articles on ANA Newsstand.

Brands continue to sharpen their focus on millennials, 80-million strong, as they enter their peak earning and spending years. Not far behind, with roughly 166 million people in tow, are gen Zers, who are starting to enter the workforce and generating more disposable income. These two segments share similar characteristics, from their comfort level interfacing with new technologies to their heightened awareness of social issues. They expect a modernized, mobile-friendly, frictionless shopping experience. Perhaps most important, both generations seek deeper, more authentic connections with brands whose mission transcends making money.

More than any other consumer groups, millennials and gen Zers support brands that take a stand on the issues of the day. Both generations have an enhanced social awareness, prompted by an unprecedented access to information online.

Brands eager to connect with these younger audiences need to go beyond creating social media accounts and developing commercials touting unique product and services. Activating the enormous buying power of millennials and gen Z consumers is dependent on developing a consumer-first shopping experience while demonstrating how brands are making a positive impact on society.

The Meshing of Millennials and Gen Z

Millennials have an enormous amount of consumer clout. They have as much as $200 billion dollars in buying power, per Forbes.com, and make up nearly a quarter (1.8 billion people) of the global population. Millennials, who are between the ages of 22 and 38, also account for 21 percent of consumer discretionary purchases, or nonessential spending on things such as meals at restaurants and entertainment.

According to Nielsen’s 2018 Millennials on Millennials study, 70 percent of consumers indicated being more likely to purchase from a brand if it handled a social issue well. The study, which surveyed 1,058 millennials on the importance of corporate social responsibility, also found that nearly 37 percent of millennials are more willing to make a purchase from a company if it supported a cause they believe in, even if it means paying a premium.

Gen Z, which follows millennials, already accounts for $143 billion in consumer spending, even though people from the gen-Z cohort were born between the relatively short window between 1996 and 2012. This segment makes up 27 percent of the current population, and is extremely diverse, with 48 percent of Americans born since 1996  identifying as non-white minorities. More than any generation that precedes them, gen Zers expects brands to reflect their values and function as a force for good.

Despite their similarities, there are some key differences between the two demographics that brand managers need know before attempting to engage them. Gen Zers, for example, are not teenagers of yore; they don’t drink or smoke much while drug abuse and teen pregnancy is much less prevalent compared to previous generations.

A confluence of seismic events, such as the March for Our Lives, the election of Donald Trump, and the Black Lives Matter and MeToo movements, have had a great deal of influence of gen Z’s worldview. Consequently, gen Zers look for brands that provide more than lip-service and actually join consumers to tackle the issues they’re passionate about.

Channeling Social Media for Good

Instant communications made possible by social media, combined with the proliferation of smartphones, has transformed the way people interact with brands. Unlike previous generations, both gen Zers and millennials can use their social channels to advocate on behalf of brands (or criticize them).

Millennials and gen Zers share similar characteristics, from their comfort level interfacing with new technologies to their heightened awareness of social issues. They expect a modernized, mobile-friendly, frictionless shopping experience. Perhaps most important, both generations seek deeper, more authentic connections with brands whose mission transcends making money.

While previous generations talked on the telephone and mailed letters to contact customer service representatives and brand executives, younger people can simply pick up their smartphones and send a direct message via Instagram or voice their criticism in a Facebook post.

Although criticizing brands via social channels is open to most anyone, gen Zers and millennials often use these platforms to encourage — and sometimes demand — brands to be more socially and environmentally responsible.

At the same time, businesses can leverage these channels to be more transparent, assess their consumers’ needs, and show how they use their resources to drive meaningful change.

Brands are increasingly being held accountable for poor business practices and, conversely, embraced for innovative programs that facilitate positive change. They’re also thinking of new ways to create initiatives that connect with their customers values and trying to manifest the adage that companies can do well by doing good.

Research

Brands that Take a Stand

“Brand Purpose” was voted the ANA’s 2018 Marketing Word of the Year. It is what makes a brand necessary; not what the brand provides but why it exists beyond turning a profit. Having a brand purpose is increasingly crucial for companies and organizations of all stripes, as younger consumers no longer make decisions exclusively based on product selection or price.

Amid a global pandemic, reckoning over systemic racism, political dissent, and myriad other social and environmental issues, brand purpose is more critical than ever. Millennials and gen Zers not only expect brands to use their platforms to advocate for meaningful change but to put some skin in the game.

Companies that foster trust and loyalty between the brand and consumers are often rewarded with business growth. According to Kantar Consulting’s 2020 Purpose report, purpose-driven organizations have seen their brand valuation increase by 175 percent during the past 12 years.

When executed carefully, purpose-driven campaigns can play a key role in transforming passive shoppers into loyal customers and brand ambassadors. The 2018 Edelman Earned Brand study, for example, reported that 64 percent of consumers globally make purchases based on where a company stands on political or social issues they care about.

Showcasing brand principles sparks consumer purchasing just as much as messaging focused on product features, perhaps more. According to the Edelman study, while 44 percent of consumers expressed purchase intent after viewing products, 43 percent of respondents expressed purchase intent after watching branded content focusing on advocacy for certain issues.

More important, taking a stand drives consumers to advocate for an organization more than product-based communications, with 32 percent of respondents expressing their intent to advocate for a brand after engaging with a cause-related campaign. In contrast, only 26 percent of people said they would advocate for a brand after watching a product-based commercial.

Best Practices

Cultivating Brand Purpose

Marketers agree that cause marketing must be baked into the brand. Establishing a brand purpose and activating it in a way that affects consumers remains a challenge across the media landscape.

Although 78 percent of marketers said their company has established a clearly defined brand purpose, 82 percent expressed a desire for more assistance in how to bring it to life, according to a 2018 ANA study. Unfortunately, there is no one-size- fits-all solution to reaching consumers by appealing to their various passions and what makes them active.

From the language used for a mission statement illustrating brand goals and values to the development of community-based programs designed to help people in need, communicating brand purpose is a major undertaking that requires buy in from every level of the organization.

For marketers, the journey to discovering brand purpose begins by looking at the past and understanding the company’s heritage. An organization’s history can help to inform brand purpose. Looking back enables brands to assess how their tradition and values have helped consumers’ lives throughout the years and continue to be relevant today.

Refining brand purpose requires a great deal of listening. Surveying external stakeholders, employees, and customers can provide companies with valuable feedback that can serve as the foundation for their brand purpose. Marketers need to engage employees, past and present, and listen to shareholders and customers in an effort to refine messaging, assess business objectives, and determine which values people care most about. Here are two important tips.

Be Genuine. Establishing brand purpose is easy. Communicate that brand purpose in a way that transforms skeptical shoppers into loyal brand advocates is the hard part. In order for brand purpose to drive business growth, marketers need to show how their companies are having a positive impact on society.

Mission statements and press releases condemning racial inequality aren’t enough to attract millennials and gen Z consumers, who see right through insincere attempts to exploit a sensitive issue for the benefit of generating some new revenue.

To truly distinguish the brand from competitors — and reap the benefits of purpose-driven marketing — brand purpose needs to be integrated throughout the entire organization, informing business decision and inspiring campaigns that result in meaningful changes.

Be Inclusive. For companies struggling to define their brand purpose, encouraging inclusion regarding employment and media representation is an effective springboard.

Inclusivity initiatives can range from adding captions and audio descriptions to content so people with hearing and visual limitations can interact with branded content to launching recruiting programs as a vehicle for diversifying an organization’s workforce.

Companies have put a growing emphasis on diversity and inclusion in the workplace for the past few years. But the fight to empower minority groups such as African-Americans, women, and people with disabilities, must be fought on multiple fronts. For instance, brands need to build a diverse network of employees, partners, agency partners, and influencers and strive to include more diversity across their creative assets.

According to a study by The Female Quotient and Google, 77 percent of millennials and 76 percent of teens said they are more likely to consider purchasing product after seeing an ad they considered to be diverse or inclusive.

The study also found that minority groups are more likely to take action after watching advertisements they felt accurately reflected their cohort.

For example, 69 percent of Black consumers said they were more likely to purchase from a brand who’s advertising positively reflects the diverse complexities of African-American culture. Similarly, 71 percent of consumers who identified as LGBTQ said they were more likely to interact with an online ad if it authentically represented their sexual orientation.

Ignoring these underrepresented consumer segments prevents companies from unlocking their massive buying power.

According to a 2018 report from the American Institutes for Research, people with disabilities have purchasing power of nearly $500 billion dollars, while Black Americans and Hispanics have a buying power of $501 billion and $582, respectively.

Nike Connects with Culture

One way to connect with consumers purposefully is by identifying cultural events and macro trends that people care about. Brands that take a stand tend to benefit when their position on a certain issues aligns with the values of their customers.

For example, Nike partnered with former NFL quarterback turned civil rights activist Colin Kaepernick after Kaepernick took a knee during the national anthem in 2016 to protest racial injustice and police brutality. Two years later, Kaepernick starred in Nike’s 30th anniversary “Just Do It” ad, accompanied by copy: “Believe in something, even if it means sacrificing everything.” Despite being a polarizing figure — and the brand incurring a bit of a backlash — Kaepernick helped strengthen Nike’s reputation, especially among younger customers.

While the partnership resulted in a #BoycottNike hashtag, and caused the company’s stock price to dip 3 percent, online sales increased 27 percent, thanks to customers eager to support Kaepernick’s cause, and Nike responded in kind, collaborating in 2019 with Kaepernick to create the “True to 7” shoe. According to Nike, the $110 sneaker sold out in the first day of its North American release.

When a spate of senseless killings of unarmed Black people — including Ahmaud Arbery, Breonna Taylor, Elijah McClain, and George Floyd — dealt a collective blow to the Black community, Nike responded with more than just an anodyne statement declaring its alliance with Black Americans in their fight against systemic racism. The company puts its money where its mouth is, pledging to invest $40 million throughout the next four years to support organizations focused on social justice, education, and economic empowerment, such as the NAACP, Black Votes Matter, and Black Girls Code. In addition, Jordan Brand, a subsidiary of Nike, made an additional $100 million commitment for the next 10 years focused on addressing racial inequities.

Nike also pledged to step up its own efforts related to diversity and inclusion, establish a more diverse workforce, and demonstrate its commitment to making a positive impact on the world. Had Nike simply collaborated with Kaepernick, made a sneaker and turned a profit, consumers would rightly see such a sponsorship as a play for additional revenue.

However, by taking a chance on a controversial figure — and committing resources to help fund the fight against systemic injustice — Nike was able to connect with people who are also passionate about racial equality in a genuine way.

The company’s appeals for racial justice have been particularly appealing among millennial and gen Z consumers. A 2018 survey by Ybrands, a youth brand tracker, found that Nike’s influence, trust, and relevance among consumers between the ages of 13 and 36 years old improved after the debut of its 30th anniversary campaign featuring Kaepernick.

Nike’s history of taking a stand has paid dividends that are just as valuable as their bottom line. According to the Ybrands study, which took the pulse of more than 27,000 millennial and gen Z consumers, Nike is the second most trusted brand (and the most trusted brand among millennials).

Black Lives Matter

After police shot Jacob Blake in Kenosha, Wisc., Edelman conducted a survey to assess America’s sentiments on racial injustice. The shooting, which left Blake paralyzed, sparked massive social protests, and the global communications firm decided to augment the initial study with additional questions.

The study, titled “The Fight for Racial Justice in America,” found that 76 percent of Americans believed systemic racism exists in the U.S., while 57 percent supported nationwide protests sparked by the shooting. Edelman found that between the two events, those numbers increased by 5 and 9 percent, respectively.

The survey also found that 44 percent of respondents believe brands have “done very little” to address systemic racism, 52 percent believe companies “owe it to their employees” to take a stand against racial inequality, and 41 percent think corporations should take a stand on such issues to attract and keep customers.

Indeed, a growing number of brands are leveraging their platforms to support Black communities across the United States, building affinities by repositioning their companies as a force for good.

Case Studies

iHeartRadio Celebrates Homecomings for HBCUs

With large gatherings discouraged due to the pandemic, iHeartRadio moved to connect HBCU (historically black colleges and universities) students and alumni with their favorite musicians, influencers, entertainers, and entrepreneurs virtually.

In concert with brands such as McDonald’s, Pepsi, and Ulta Beauty, the streaming radio platform highlighted numerous historically Black colleges and the many politicians, civil rights leaders, and innovators who attended these schools.

The program, which premiered on November 12, featured virtual performances from R&B singers H.E.R., and Khalid, and four of the most prestigious HBCU marching bands in the country.

The virtual event was the culmination of a month-long initiative to honor the history and cultural impact of some of the county’s most notable HBCU alumni through a series of podcast episodes called “iHeartRadio’s HBCU Homecoming Celebration.”

Mondelēz Drives Diversity Initiatives

In early September Mondelēz, a multinational food company whose brands include Oreo, Jell-O, and Sour Patch Kids, published its diversity and inclusion goals.

These goals include doubling the representation of Black people throughout its U.S. management, spending $1 billion annually with minority owned and women-owned businesses by 2024, and creating a new position of global chief diversity and inclusion officer.

Mondelēz also plans to honor Martin Luther King Jr. Day and Juneteenth as paid holidays (in the U.S.) and partner with the Boys & Girls Clubs of America to create a college scholarship program for underrepresented youth.

State Farm’s Neighborhood for Good

State Farm provides another salient example of how brands drive meaningful change. The insurer, which works with more than 7,000 nonprofit organizations and donates $50 million+ annually to charitable causes, has for the last several years encouraged people to help build stronger communities through volunteer work.

In 2017, the company launched Neighborhood of Good, a website dedicated to helping people find local volunteering opportunities. In 2018, the State Farm brought the effort to life, attending various music festivals such as Bonnaroo and Lollapalooza and setting up different “houses” to help fight hunger and support music education and at-risk youth.

Each house provided participants with an opportunity to engage in a micro-volunteering activity that would benefit local communities. For example, festivalgoers who went to the “house” focused on food insecurity, helped package food kits with non-perishable items that would subsequently be donated to local food banks. The initiative resulted in more than 25,000 acts of goodwill and the distribution of 26,000+ important items, such as food kits and musical instruments.

The program brought the company closer to the 18- to 34-year old demographic it hoped to reach, with 91 percent of house participants saying that the program had a positive impact on their opinion of the company.

What’s more, 81 percent of festival attendees who participated in “an act for good” said the experience increased their likelihood to consider State Farm for their insurance needs.

Wavio Helps the Hearing Impaired See Sound

Wavio, a software company that provides services for people who are hearing impaired, is a terrific example of brand purpose focused on inclusivity and accessibility.

The company leveraged AI-powered machine learning technology to listen for common household sounds, such as fire alarms and children crying for help. Once registered, the technology delivers a notification to a user’s smartphone.

The software, called “See Sound,” enables millions of people with hearing loss to access sound with their eyes. By capturing more than two million human-labeled 10-second sound clips made available by Google Audio Sets, Wavio’s See Sound unit is able to identify noises with a high level of accuracy, giving people hard of hearing crucial access to sound.

Source Information

“Marketing to Gen Z and Millennials: Driving Brand Love in the Age of Sustainability.” Jeff Fromm, Partner at Barkley, 5/6/20.

“Nike’s brand burnished by its affiliation with Colin Kaepernick.” Andy Uhler, Reporter at Marketplace, 6/25/20.

“Nike’s online sales surge in days after Kaepernick ad debut.” Sarah Whitten, CNBC.com, 9/7/18.

“Nike Inc. Statement on Commitment to the Black Community.” 6/5/20.

“How Do Gen Z & Millennials Really Feel About Nike’s Kaepernick Ad?” YPULSE, 9/12/18.

“Why Accessibility is Smart Business — The Hidden Size and Purchasing Power of People with Disabilities.” Juliana Blackett, Accessly, 5/10/19.

“See Sound.” 2019 ANA Multicultural Excellence Award Grand Prize Winner, People with Disabilities. Brand: Wavio. Lead Agency: Area 23, An FCB Health Network company, 1/15/20.

“The Power of Purpose In A Post-Digital Age.” ANA, 6/10/20.

“Four Ways Marketers Can Best Engage Gen Z.” ANA, 8/22/19.

“How to Plan and Deliver More Inclusive Media.” Google, 2020.

“How Gen Z Will Save Us and Their Impact on Business.” Appy Hill, Senior Content Strategist at Moxie, 6/3/20.

“Brands Take A Stand.” Edelman, 10/2/19.

“How Brands Can Promote Racial Justice.” ANA, 6/4/20.

Source

“Deeper Connections Through Purpose.” Insight brief compiled by Dominick Fils-Aimé, Manager, Marketing Knowledge Center. Designer: Amy Zeng, Marketing and Communications, ANA. Editor: Matthew Schwartz, Senior Manager of Marketing Communications, ANA © Copyright 2020 by the Association of National Advertisers, Inc. All rights reserved.