Does An Agency's Advocacy Risk Losing Accounts?

Agency CEOs have a distinct challenge in politically fraught times — do they take clear positions on the key issues of the day? Or do they avoid alienating clients or potential clients with specific political stances?

It varies by CEO.

Both MDC Partners' Scott Kauffman and Interpublic Group's Michael Roth wrote letters to their teams after protests in Charlottesville, Virginia last summer to remind them there is a place in the world for positive change.

Conversely, TDA_Boulder is not likely to land Hobby Lobby as a client after the agency and Sir Richards Condoms launched a social media campaign to provide free condoms to any Hobby Lobby employee who requested them.

The move came four years ago — after the Supreme Court ruled that companies do not have to cover their employee’s contraceptives under the Affordable Care Act.

While a growing number of high-profile CEOs, like Apple's Tim Cook and Bank of America’s Brian Moynihan, are speaking out about political matters, ad agency CEOs often exercise restraint, since their portfolios include conservative and liberal clients.

“This direction of greater political influence concerns me,” one ad executive told MediaPost. “It feels that companies are already way too involved in politics.”

In a time of hyper-partisanship, there is no clear playbook on how to navigate CEO activism. For every Kauffman, whose recent tweets include "Nobody does hate-mongering and race-baiting better than Steve Bannon" and "No, Trump is not fit for the office of the President of the United States of America," there is someone like United Collective CEO John Gallegos.

He never uses the agency or client efforts as a platform for his personal or political opinions. Gallegos United agency works with conservative-leaning Chick-fil-A.

“We’ve found them to value inclusiveness, honesty and trustworthiness, which align with what we strive for at Gallegos United,” he says.

While many brands approached by MediaPost did not specifically link any account changes to the beliefs of their agencies, it is possible CEO activism could impact an agency relationship, given public pressure and increased visibility. Clients are not seeking baggage when it comes to their agency partners, quips one PR executive.

For instance, digital agency Giles-Parscale is credited with helping Trump win the presidency. But it didn’t help the agency. There has been a massive social media push demanding that the agency be charged with aiding Russia's meddling in the election.

Last August, the San Antonio, Texas-based shop decided to separate its political work and sell its traditional design and online services to ecommerce service provider CloudCommerce for $9 million.

As a noted PR executive observed, this deal was necessary. The Trump visibility likely would have made it hard for Giles-Parscale to land new clients when the agency’s actions may result in a backlash.

More than three-quarters of World Federation of Advertisers members plan to review their agency rosters in 2018. Consumers’ new demands on brands and agency economics may determine the extent of their political activism.

Consider how AOR Saxum handled the Hobby Lobby controversy.

In the January/February issue of the Harvard Business Review, David Green, founder and CEO of Hobby Lobby -- a family-owned chain of crafts stores -- cited his religious beliefs when opposing the Obamacare requirement that employee health insurance include the morning-after pill. His beliefs form the basis of his corporate decisions.

AlthoughSaxumdeclined to address Hobby Lobby specifically, a Saxum spokesperson says the conversation over CEO activism arises with many of its clients. To address it, agency executives developed a “defined position that covers everything we do.

“We respect boundaries and conflicts when it comes to taking on new work, [so] we align our clients with team members who are comfortable supporting their issues. We aren't afraid to say no to clients or work that doesn't align with our values,” he adds.

Individual staffers at the agency are free to express their respective thoughts “on their own time. We support their efforts to make our communities stronger, safer, more diverse and more inclusive.”

Still, anti-Trump voices are often heard in the ad world.

Industry conferences are filled with speakers advocating more liberal-learning causes. Several agencies have consistently shown their left-leaning support through public-facing projects.

For example, TDA Boulder's new campaign with restaurant Hapa Sushi takes Trump’s actual words to illustrate the coming apocalypse with the "Eat Well Before It Ends" message. “We are from Boulder, and people assume we are liberal," says Jonathan Schoenberg, executive creative director, TDA Boulder. "And to some degree, they are correct."

Similarly, Pittsburgh advertising agency Brunner produced 84 Lumber’s controversial 2017 Super Bowl spot “The Journey Begins,” which portrayed a Mexican mother and daughter’s travels through Mexico to a U.S. border wall that resembled Trump’s proposed border.

This project, says Steve Radick, Brunner PR director, helped increase company awareness across the industry. “Our existing clients told us they were proud to be working with an agency that worked on something that made such a global impact," he says. (Caveat: 84 Lumber’s owner and president, Maggie Hardy Magerko, is a Trump supporter and did not consider their Super Bowl spot to be “anti-Trump.”)

Walton Isaacson's Martin Cerri helped to develop the “Turn Ignorance Around” campaign that flipped the script on racist stereotypes, with dual-sided T-shirts that revealed the true stories about their wearers.

“If you call standing up for LGBTQ rights and against hate speech and racial stereotyping political — then we have been political before,” said an agency spokesperson.

However, Accenture cautions about an emerging trend called "unintended consequences" that highlights the need for organizations to confront the unexpected impacts of their products and services, business strategies and actions.

TDA_Boulder admits that political messaging carries both positive and negative ramifications.

“We recently got a project based partly on the anti-Trump video we did pre-election," says Schoenberg. "At the time, it was just a chance to stand up for what was right. I don’t think anyone then thought Trump would be President.”

Yet the company did part ways with another client. “Our collective political and social views may have played a role,” he admits.

Most of the time, however, he says their actions fall more into a grey area without an absolute consequence. “A senior executive at a company we work with got very agitated about social posts my business partner was making. He made it clear, in writing, that he was offended and wanted an explanation," says Schoenberg. “He never got one — and we still work together.”

Aaron Chatterji, associate professor at Duke University’s Fuqua School of Business, addressed CEO activism in the Harvard Business Review article. He believes CEOs need a playbook in this new world. They should select issues carefully, reflect on the best times and approaches to get involved, consider the potential for backlash, and measure results.

Chatterji also recommends that CEO activists understand there are key moments when speaking out might make a difference. The chance to block a particular policy is typically better than reversing legislation.

It may also be smart, in some instances, to enlist a coalition in a key cause.

More than 160 CEOs and business leaders chose to sign a letter by the Human Rights Campaign opposing the North Carolina bathroom law. In doing so, they mitigated the risk of consumer backlash and amplified the newsworthiness.

“Collective action can also make it more difficult for critics to target individual corporate leaders, and thus can be perceived as less risky. But it is slower by design and is likely to be less effective in associating a particular leader and corporate brand with a particular cause,” he writes.

CEOs also may choose not to weigh in.

Some leaders feel that they do not understand the issue well enough or hold an unpopular view. But they should be prepared when employees, the media, and other interested parties question their silence.

It’s also sound policy to ensure internal stakeholders are aligned with CEO activism—or at least aware of it ahead of time, recommends Chatterji. Not all CEOs consult with their directors or employees before taking public stands, which may imperil their efforts.

Key reminder: CEOs may be speaking for themselves, but their statements will be associated with their companies. “Given that, we advise setting up a rapid response team composed of representatives from the board, investors, senior management (including the Chief Communications Officer), and employees to act as a kitchen cabinet on CEO activism,” he writes.

As Millennials increasingly wield spending dollars and behaviors based on a company's social, environmental and political policies, a CEO's stance reflects not only the brand message but the ethos of an agency.

There are no easy answers, particularly during divisive times. Agency leaders may want to ensure their workplace includes liberal and conservative voices, given client assignments.

It may be wise to remember Michael Corleone’s famous “Godfather” line: “It’s nothing personal, Sonny. It’s strictly business.” Today, in a super-charged environment, all business is personal.

 

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