The quickest way to bruise your brand

September 16, 2010

USA-RETAILSALES/

Corporate dollars and political campaigns are like oil and water for well-established retail brands.

Despite the troubling flexibility provided by the Supreme Court case Citizens United, which allowed more direct corporate and union contributions to political campaigns, this freedom can be perilous.

Target learned first-hand how political donations could damage its brand. A public relations disaster followed its contribution to a group backing Tom Emmer, a Republican candidate for Governor in Minnesota, where Target Corp. is based.

According to a study by Brandweek, a trade publication, Target’s reputation was hurt in early August when the donation was revealed — and still hasn’t recovered. The publication’s BrandIndex report showed the company lost one-third of its “buzz” score in 10 days last month, recovered modestly, then fell again during a media backlash. Target’s stock price fell to under $51 a share by Aug. 30, but has since recovered to close above $53 recently.

Not only did the contribution result in a blizzard of op-eds, blogs and negative publicity, it seeded a boycott campaign from the well-funded progressive organization MoveOn PAC.

Brand damage can be severe when corporations muddy their image by backing campaigns.

In Target’s case, shoppers who liked their clean, well-lit discount stores generally expected Target’s image to be apolitical. You don’t have to wander far from a Target checkout to see how the company supports a wide variety of community non-profits. Overt political leanings alienated an untold number of customers.

Direct political funding is bad for business because high-profile retail brands are expected to project this welcoming, multi-cultural image devoid of any agenda outside of free enterprise. They want your business, but they need to do it without a partisan message.

While we wouldn’t be surprised to see a gun manufacturer supporting a pro-second amendment politico, we would be appalled to see a fast-food chain back a pro-life or pro-choice candidate. It’s a horrible fit and sullies a company’s marketing message.

That’s not to say corporations can’t deliver their political dollars in other opaque ways. There are still more than 10,000 lobbyists on Capitol Hill and thousands more in state capitols. They can cloak their donations through trade groups, “527″ organizations or “Astroturf” groups that appear to be grassroots, but are seeded and organized by corporate dollars.

Jane Mayer’s recent New Yorker piece shed light on the Koch family’s various political groups and libertarian promotions.

Have consumers of Koch Industries’ Georgia-Pacific products such as Quilted Northern bath tissue and Brawny paper towels resented the Koch family’s funding of anti-Obama campaigns? Their right-wing bankrolling has largely flown under the radar of mainstream media, yet is constantly monitored by groups such as Sourcewatch.org.

No matter how many watchdog groups there are, corporations have far more money and ways to evade an ever-dimming media spotlight. Corporate-funded “Super PACs” are raising hundreds of millions for mid-term Congressional races.

Super PACs feature groups like American Crossroads, run by former George W. Bush adviser Karl Rove. The group has raised more than $17 million and includes donors like Dixie Rice Agricultural Corp.

Meanwhile, money keeps pouring into campaigns like a breach in an old dam. Political fundraising — now exceeding $2 billion in this cycle — according to the Associated Press, will probably break records this year.

In addition to unions such as AFSCME, IBEW, Laborers and SEIU, the “heavy hitters” in political contributions are AT&T, National Association of Realtors and Goldman Sachs. These groups represent more than $355 million in political donations, based on data through August 22, according to OpenSecrets.org.

As it stands now, it’s unlikely Congress will do anything to dampen the impact of the Citizens United ruling before the November election. Yet open disclosure of direct and indirect special-interest funding is essential, something the proposed Disclose Act attempts to mandate.

No matter what brand of politics you subscribe to, you should know which corporations are backing candidates and why. Corporations already have more than enough lobbying muscle – and those efforts should be fully exposed.


John Wasik is also the author of “The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream.”

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