The effect of corporate political advocacy on brand perception: an event study analysis

Abstract

PurposeIn recent years, brands have increasingly engaged in corporate political advocacy (CPA; also termed brand activism or corporate sociopolitical activity) by taking positions on polarizing sociopolitical issues. Recent experimental research suggests that consumers respond to CPA based on its alignment with their own values, and that it typically induces an overall negative response. This study aims to provide additional insights by exploring consumer brand perceptions following CPA.Design/methodology/approachAn event study of 106 CPA events and weekly consumer brand perception data was conducted. A regression model was used to investigate the moderating effects of CPA effort, concurrence and the strength of the online protests evoked by the CPA.FindingsThe results show that CPA had a negative effect on consumers’ brand perceptions and that the effect was stronger for customers relative to non-customers. The negative effect was attenuated by CPA concurrence and amplified by effort. Additionally, online protests were driven by the CPA effort and had a strong negative effect on brand perception. Online protests were stronger in the past, and, in turn, the negative effects of CPA on brand perceptions have slightly weakened in recent years.Originality/valueThis study contributes to the existing literature by highlighting the role of online protests following CPA and distinguishing consumer and customer responses. This study also provides converging evidence of the moderating effects of effort and concurrence identified in previous studies.