June 13, 2024

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Today's newsletter is 1,379 words, a 5-minute read.

1 big thing: Rise of brand nationalism

Table showing the Share of adults who say using a brand from a particular country signals approval of that country's government, from surveys of t least 13,800 adults in over 14 countries per year in  2023 and 2024.
Data: Edelman; Note: Indonesia had no change between 2023 and 2024; Chart: Tory Lysik/Axios Visuals

Try as they might, big brands cannot escape global politics.

Why it matters: Consumers are increasingly linking corporate decisions and geopolitical matters with brand reputation.

Driving the news: Edelman surveyed 15,000 people across 15 countries between April 13 and 24, and found that nearly 80% of consumers will boycott a brand based on its country of origin.

  • Those in South Korea, Japan, China and France are most likely to boycott, however consumers in Saudi Arabia saw the biggest increase in favoritism toward local brands โ€” jumping 20% in the past year, according to the Edelman study.

Roughly half of those surveyed believe that supporting a foreign brand signals approval of that country's government.

Of note for American brands: According to a new Pew Research Center survey, global audiences have more confidence in President Biden over former President Trump.

  • Biden averaged a 15-point advantage across the 34 nations polled by Pew, with huge differences in European countries.

Zoom out: Globally, 60% of consumers buy, choose or avoid brands based on personal politics.

  • A majority of consumers in France, Germany, Japan, Mexico and South Korea are are more likely to buy brands that committed to combating climate change, while those in Brazil, Indonesia and Saudi Arabia prioritize brands that are focused on ending racial inequality.
  • Consumers in Canada, India, South Africa, the UAE, the U.S. and the U.K. are more likely to support brands that are committed to improving access to health care.

What they're saying: Political affiliation is a key driver for brand loyalty, which means "all of a sudden, politics is a very important part of the brand marketing consideration set," Edelman CEO Richard Edelman told Axios.

  • "Your supply chain is political. The people you have in your ads is political. The way in which you price your products is political. Everything is now seen through the political lens โ€” and you don't have to rush out to be political, but you have to have a political sense," he added.

Between the lines: Common brand actions โ€” like partnering with influencers, engaging in fads or wading into cultural flashpoints โ€” can be seen as political statements.

  • Bud Light's 2023 social media campaign featuring transgender influencer Dylan Mulvaney was quickly politicized, while Bumble recently found itself in hot water after displaying billboards that positioned celibacy as a bad alternative to online dating.
  • "Politics is part of marketing now โ€” and that's a big statement," Edelman said.

The big picture: High-stakes elections are taking place in more than 50 countries this year, meaning most consumers and employees across the globe are entrenched in politics.

  • The biggest mistake a brand can make is "assume that the brand is so clearly understood that it will be immune to all of the political currents," Edelman said.

What to watch: Companies are grappling with how to communicate around business-related issues that are also linked to politics, like inflation in the U.S.

Case in pointโ€ฆ ๐Ÿ‘‡๐Ÿป

2. Companies combat inflation narratives

Illustration: Sarah Grillo/Axios

Inflation, while gradually easing its peak, is still infuriating American consumers โ€” and corporate reputations are taking a hit because of it.

Why it matters: In preparation for potential political backlash, companies are attempting to manage their messages โ€” and in some cases, set the record straight โ€” when it comes to rising prices.

The big picture: Americans on both sides of the aisle are concerned about high prices, making it a popular talking point on the presidential campaign trail.

๐ŸฅŠ Reality check: Inflation has slowed for second straight month, according to the Consumer Price Index (more on that below).

Yes, but: No company wants to become a political football and get called out from a debate stage or rally podium for its price hikes.

State of play: Communications teams are proactively sharing context about price increases or correcting any inaccuracies online or across social media.

  • For example, McDonald's U.S. president Joe Erlinger recently issued an open letter pushing back against the notion that prices were increasing "beyond inflationary rates."
  • Erlinger also used the opportunity to point to the macroeconomic forces at play, like "historic rises in supply chain costs, wages and other inflationary pressures."

The intrigue: According to this year's Axios/Harris Poll 100, companies like Walmart, Burger King, Costco, Kraft Heinz and Kroger saw a decline in their reputation scores, due in part to inflation.

What to watch: The flurry of price increases for goods and services โ€” from Girl Scout cookies to stamps to streaming subscriptions โ€” could continue to influence consumer sentiment.

  • Inflation frustrations could signal danger for companies. Conservative voters could tie them to the bad vibes associated with "Bidenomics," while liberals could attack them for presumed corporate greed.

The bottom line: Inflation concerns are chipping away at brand reputation.

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3. Yes, but: What is inflation?

The line chart shows the change in the Consumer Price Index from January 2021 to April 2024, as measured both cumulatively since Biden's inauguration and year-over-year. There's a steady increase in cumulative inflation over this period that ends 19% higher than January 2021. Year-over-year change rises sharply and starts to fall in July 2022 before ending at 3.4% in April 2024.
Data: BLS; Chart: Axios Visuals

The meaning of the word "inflation" has changed. It used to mean rising prices; now it means high prices, Axios' Felix Salmon reports.

  • ๐Ÿง  Why it matters for communicators: To effectively manage the message, corporate communicators need to understand how consumers define the term.

Context: Inflation, at least as officially measured by the Bureau of Labor Statistics, has come down sharply from its peak of nearly 9% in mid-2022.

  • It now stands at 3.4%, broadly in line with where it was for the quarter century between 1983 and 2008.
  • Meanwhile, the headline measure of inflation is based on something pretty arbitrary: where prices were exactly one year ago.

Zoom out: A more intuitive concept of inflation is: "Am I paying higher prices for things than I used to?"

  • Under that definition, inflation can be high even when prices are falling.
  • On a literal level, that should not be possible โ€” prices that are deflating can't also be inflating. In quotidian usage, however, it's entirely possible for $4 eggs or gasoline to be indiciative of inflation, even if they were $4.50 previously.

The bottom line: Prices are high, therefore inflation is high. Get used to it.

Go deeper: Subscribe to Axios Markets

4. Communicator Spotlight: Christine Elliott of Moody's

Photo illustration: Axios Visuals; Photo: Courtesy of Moody's

After joining Moody's in 2021, Christine Elliott was given one mandate: "Modernize the communications function."

  • Since then, she has brought together comms, brand, government relations, community impact and sustainability to form a corporate affairs function.

Why it matters: As chief corporate affairs officer of Moody's, Elliott is tasked with managing the message for all the financial services firm's most critical audiences.

๐Ÿ—ฃ๏ธ What she's saying: "It's all the same messaging, but it's our job to tweak it to best reach the different stakeholders," she told Axios.

๐Ÿ“ How she got here: Elliott first worked as a producer for ABC News before transitioning to a career in corporate communications.

  • Prior to joining Moody's, she held comms leadership roles at American Express, S&P Global and Mastercard.

๐Ÿ“ˆ Trend watch: The rise of owned content. Elliott has created a digital content team responsible for social media, podcast and video production.

  • The team's most recent project is a docuseries on financial crime titled "The Infinite Game."
  • "It looks more like Netflix than any financial services content you've ever seen. And the customer reaction has been fantastic because we're not pitching the product โ€” we're talking about what we do," Elliott said.

๐Ÿˆ Content plate: Elliott gets news from the Financial Times, the Wall Street Journal and newsletters like Axios AM, and follows industry trends on LinkedIn.

  • When she's not consuming news, she's watching University of Michigan sports teams โ€” specifically, college football.

๐Ÿง  Best advice: Leaders must be vulnerable.

  • "Everybody talks about candor, and candor is great. But leaders should not forget that within candor, comes vulnerability."

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5. ๐Ÿšจ 1 alarming stat to-go

Fake news outlets outnumber real outlets, Axios' Sara Fischer reports, based on a new report by misinformation tracking company NewsGuard.

๐Ÿงฎ By the numbers: There are at least 1,265 websites identified as being backed by dark money or that are intentionally masquerading as local news sites for political purposes, according to the report.

  • Nearly half (45%) of the sites observed as part of the study were targeted to communities or regions in swing states, according to an Axios analysis of the sites.

๐ŸฅŠ Reality check: As of last year, there were only 1,213 daily local newspapers in the U.S.

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โœ… Thanks to editors Nicholas Johnston and Nicole Ortiz.

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