PROJECT: SUPERBRAND10 TRUTHS RESHAPING THE CORPORATE WORLD

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ABOUT THE STUDY

TRUTH 1: Your Oompa Loompas Are Going Viral

TRUTH 2: Your Company Is Your Brand

TRUTH 3: Your Values Are Invaluable

TRUTH 4: Mindless Consumption Is So Last Century

TRUTH 5: Heroes Wanted

TRUTH 6: Acting “Local” Pays Big Dividends

TRUTH 7: Together Is Better

TRUTH 8: The “Greater Good” Starts Within Company Walls

TRUTH 9: You’ve Got to Know Your Audience

TRUTH 10: A Strong Leader Is a Strong Asset

CLOSING THOUGHTS

ABOUT THE STUDY

In March 2015, Havas Worldwide partnered with Market Probe International to survey 10,131 people aged 18+ in 28 markets:

Australia, Belgium, Brazil, Canada, China, Colombia, the Czech Republic, Estonia, France, Germany, India, Ireland, Italy, Japan, Latvia, Lithuania, Malaysia, Mexico,

the Netherlands, Poland, Portugal, Saudi Arabia, Singapore, South Africa, Spain, the United Arab Emirates, the United Kingdom, and the United States.

The survey sample was made up of 20% leading-edge PROSUMERS

and 80% MAINSTREAM consumers.

Who are Prosumers?Prosumers are today’s leading influencers and market drivers—and have been a focus of Havas Worldwide studies for more than a decade. Beyond their own economic impact, Prosumers are important because they influence the brand choices and consumption behaviors of others. What Prosumers are doing today, mainstream consumers are likely to be doing 6 to 18 months from now. Learn more at mag.havasww.com/prosumer-report/

Prosumer and mainstream respondents are segmented into the above generations.

In some cases, GLOBAL TOTALS are used to illustrate overall trends.

Note: Some figures do not add up to 100 percent due to rounding.

MILLENNIALS ages 18–34

GEN XERS

ages 35–54BOOMERS

ages 55+

Havas Worldwide has been monitoring the movement toward corporate social responsibility since 2007, when we conducted our Future of the Corporate Brand study in three markets: France, the United Kingdom, and the United States. In the years since, we’ve seen terms such as transparency, sustainability, and purpose beyond profit enter the common parlance and become a focus of business leaders across the globe, as more companies have come to recognize the link between “doing good” and “doing well.”

With our latest Prosumer study, we are seeking to understand how this movement has evolved over the past eight years.

We answered these questions and more—and uncovered 10 overarching truths that dictate how the modern corporation must operate to have a shot at reaching “superbrand” status.

WHAT ARE THE PRIMARY ISSUES PEOPLE WOULD LIKE BUSINESSES TO ADDRESS?

WHAT DO CONSUMERS NOW EXPECT OF THEIR BRAND PARTNERS, AND HOW CRITICAL ARE THESE EXPECTATIONS TO THEIR PURCHASE DECISIONS?

HOW ARE COMPANIES RESPONDING TO INTENSIFIED PRESSURES TO WORK TOWARD THE COMMON GOOD?

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TRUTH 1 YOUR OOMPA

LOOMPAS ARE GOING VIRAL

In the Roald Dahl classic Charlie and the Chocolate Factory, no one outside the forbidding gates of the world-famous Willy Wonka Candy Company had any idea of what went on inside. They happily munched on their Wonka’s Whipple-Scrumptious Fudgemallow Delights, Scarlet Scorchdroppers, Whizdoodles, and Glumptious Globgobblers without giving a moment’s thought to the company’s labor practices, the sourcing of its chocolate and other ingredients, or the impact of those bellowing smokestacks on the surrounding air quality. In the real world of today, such a lack of scrutiny would be unimaginable. Whether a company is public or privately held, people expect broad access and accountability. Churning out the most exquisite confections will offer scant protection against a public intent on answers. This is especially the case in developed markets, but pressures are also intensifying in centers of cheap labor in Asia and elsewhere. Suffice it to say that a labor pool made up of short-statured men with orange skin and green hair, hailing from Loompaland, would not go undetected. (Nor would their messages concerning greed and gluttony be off the mark.)

When did business become…everybody’s business? It was a gradual process, tied in part to increased government regulation and the rise of NGOs, but public interest in the inner workings of corporations was certainly beginning to take hold in the latter decades of the last century. By the time of our 2007 Prosumer study, more than 6 in 10 respondents in the three countries surveyed (France, United Kingdom, United States) agreed that they were seeing more press coverage of business in the mainstream media. And almost as many indicated that they knew more about the companies that made the products and services they bought than they used to.

YOUR OOMPA LOOMPAS ARE GOING VIRAL

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57%

60%

59%

I am paying more attention than in the past to the environmental and/or social impact of the products I buy

PROSUMER

MAINSTREAM

MILLENNIALS

GEN XERS

BOOMERS

56%

73%

(% agreeing strongly/somewhat)

The results of our 2015 survey show that most of our new batch of respondents—including 7 in 10 leading-edge Prosumers—make it a point to find out about the companies that provide the products and services they buy. And nearly 6 in 10 are paying more attention

these days to the environmental and/or social impact of their purchases. In contrast, only around 1 in 4 claim not to care about the businesses behind the brands they buy, and fewer than 1 in 3 say the impact a brand has on society as a whole doesn’t matter to them.

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(% agreeing strongly/somewhat)

I make it a point these days to know more about the companies that make the products and services I use

51%

55%

54%

51%

70%

I don’t care if a brand has a negative impact on society; I’m just looking for the best prices and most reliable products

31%

34%

28%

27%

28%

I don’t care who makes the things I buy

27%

31%

23%

19%

22%PROSUMERMAINSTREAMMILLENNIALSGEN XERSBOOMERS

UNDER THE NEW RULES OF BUSINESS, COMPANIES ARE EXPECTED TO OPERATE OUT IN THE OPEN.

TRANSPARENCY IS NOT OPTIONAL

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Businesses must continue to do all they can to protect legitimate trade secrets, of course—a task that’s especially difficult in the digital era—but on issues related to ingredient sourcing, the welfare of workers, product safety, and the like, a very different set of rules applies. And when the public, the media, or regulators do find something amiss, it may not be just the organization directly at fault that pays. In today’s highly globalized business environment, a factory collapse in Bangladesh had repercussions for the entire textile industry. A series of strikes and suicides at China’s Foxconn factories forced Apple to change its entire iPhone production line, running the risk of cutting off some buyers. Duplicity on the part of Volkswagen cast a shadow on other automakers—particularly those with diesel models—and even on German industry as a whole.

Far more than in the past, the consuming public feels it has a right to hold companies accountable for their bad behaviors. And so transparency has become an imperative for those businesses that seek to earn consumer trust and loyalty. In fact, when we gave our respondents a list of 16 core values and asked them to indicate which five were most important for a brand to possess, “honesty/transparency” nearly tied with “reliability/durability” for second place, behind only “quality.” In some markets, insistence on corporate transparency is even stronger. For instance, an astounding 100 percent of Prosumers in Brazil agreed it’s important for a company to be transparent, a reaction likely tied to the Petrobras corruption scandal, which rocked both the Rousseff administration and Brazil’s national economy.

It is very/somewhat important for a company to be transparent

PROSUMER MAINSTREAM

88% 78%

MILLENNIALS GEN XERS BOOMERS

76% 82% 86%

Looking at the following core values, please indicate which FIVE you think are most important for brands to embody.

69% 57% 56% 41% 33% 32%Quality Reliability/

durability Honesty/

transparency Innovation Authenticity Fairness

31% 19% 19% 17% 14% 13%Originality Simplicity Socially active Vision Passion Generosity

(global sample)

11% 9% 5% 3% 4%Warmth

Fun Playfulness Politically

active None

of these

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It’s also never been easier to find out about a company’s operations. Organizations such as SkyTruth and Air & Space Evidence are using satellite and aerial imagery to uncover everything from illegal dumping to the topographical impact of natural gas drilling. And consumers now have access to all sorts of guides and apps that allow them to quickly see how the products they’re considering rate in terms of safety, sustainability, health, and other measures. Not sure whether that pair of khakis lives up to your ethical standards? If you live in Australia, you can use the Shop Ethical! app to check out the environmental and social records of the companies behind more than 4,000 products. In France, Greenpeace’s Le Guetteur app will tell you whether a particular agricultural brand uses GMOs or pesticides. And wherever in the world you live, you can consult the GoodGuide app to “shop your values”—tapping into the health, environmental, and social performance ratings of more than 250,000 food, personal care, and household products. That means that as you

walk through your local supermarket or discount store, you can compare brands of toothpaste, light bulbs, and frozen pizza to find out which products you’d feel best about having in your home.

It’s reached the point at which companies are actually competing on transparency—eager to show consumers that they have nothing to hide and everything to boast about. In 2013, Chipotle became the first fast-food chain to tag GMOs in its offerings and has now banned them entirely. In Brazil, Coca-Cola countered rumors of dead rats in its bottles by launching Fábrica da Felicidade (“Happiness Factory”) tours to allow interested parties to see how the drinks are bottled. Everlane, a direct-to-consumer fashion brand based in San Francisco, offers information about all its suppliers on its website, even including videos and stories to give customers a better understanding of how and where the goods were made.

“IT’S REACHED THE POINT AT WHICH COMPANIES ARE ACTUALLY COMPETING ON TRANSPARENCY—EAGER TO SHOW CONSUMERS THAT THEY HAVE NOTHING TO HIDE AND EVERYTHING TO BOAST ABOUT.”

TRUTH 2YOUR

COMPANY IS YOUR BRAND

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There was a time when a company could act as if its individual brands were somehow separate from its corporate organization. People would happily eat a bowl of Cheerios or cleanse their faces with Noxzema without giving a thought to who produced them. Now a growing—and oftentimes vocal—segment actively seeks out information on the “who” behind the things they buy. They make a note of it when one brand buys another. And whether it’s Amazon buying Zappos, Unilever buying Ben & Jerry’s, or some other acquisition, they consider how that change of ownership might influence the brands they favor.

People pay more attention to corporate brands today because so many of them are operating on a massive scale. Let’s not forget that more than a third of the world’s largest economies are now corporations, not countries. And with that size and power comes an expectation of responsibility. It used to be heresy to suggest that companies “owed” anything to anyone but their shareholders. Just half a century ago, leading economist Milton Friedman rejected talk of corporate social responsibility outright, saying that businesses had one responsibility only: to increase profits. That’s a point of view that no longer carries much weight. Nearly three-quarters of our global sample—including 84 percent of Prosumers—agreed

that corporations have a responsibility that extends beyond the generation of profits. And a growing number of business leaders agree. On the topic of climate change, Richard Branson, founder of the Virgin Group, noted:

Branson is right about social responsibility making good business sense: In early 2015, the authors of the Project ROI study found that a high-level corporate reputation for responsibility and sustainability can account for as much as 11 percent of a company’s value.

YOUR COMPANY IS YOUR BRAND

“I spend a lot of my time saying to business leaders,‘We are citizens of the world. We cannot just leave things to the social sector and to the politicians to speak up…We have as much clout as they, if not more than some of them, and we have the responsibility to speak out. And it makes good business sense.’”

Companies have a responsibility to do more than just generate profit

Companies have an ethical obligation to operate in a way that does not harm the environment

I avoid buying from companies that have a negative social or environmental impact

(% agreeing strongly/somewhat) PROSUMER MAINSTREAM MILLENNIALS GEN XERS BOOMERS

71% 73%

66%

70% 70%

50%

73% 77% 53%

81% 83% 51%

84% 85%

53%

75% TOTAL

73% TOTAL

53% TOTAL

86%

84%

81%

81%

80%

78%

77%

74%

74%

71%

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So, what exactly is it that the modern corporation is expected to do? We presented our respondents with a list of 10 behaviors and asked how important it is for a company to do each. It’s incredibly telling that every single behavior was considered important by at least 7 in 10 people surveyed. Sure, it’s essential for a company

to offer high-quality goods, but that’s just a start. Most people also think it’s important for companies to take on a variety of responsibilities that Friedman and his ilk would have considered hugely inappropriate, including fighting injustice and improving local communities.

How important is it for a company to do each of these things?

(% choosing very or somewhat important) P=Prosumer, M=Mainstream

Offer high-quality goods and/or services

Improve the lives of its employees

Invest in innovation

Uphold strong values

Be transparent

Improve the communities in which it operates

Offer low prices

Express a vision of a better world

Fight injustice

Drive social change

P: 95 M: 85

P: 93 M: 83

P: 92 M: 80

P: 91 M: 79

P: 88 M: 78

P: 88 M: 76

P: 85 M: 75

P: 86 M: 72

P: 84 M: 72

P: 84 M: 68

For those interested in the behavior of a brand’s corporate parent, it’s easier than ever to determine who has been naughty or nice. Oxfam’s Behind the Brands scorecard assesses the agricultural sourcing policies of the world’s 10 largest food and beverage companies. So you can find out, for example, how the company behind your favorite cookie brand treats its supply-chain producers and the land on which its ingredients are grown. Or if you’re more interested in political influence, you can use the BuyPartisan

smartphone app to scan an item at the grocery store and see the political donations made by the CEO, board of directors, the company’s PACs, and even its employees.

When companies fall short of the new consumer’s expectations, they pay the price. Half of mainstream consumers and two-thirds of Prosumers avoid buying from companies deemed to have a negative social or environmental impact.

“...IT’S EASIER THAN EVER TO DETERMINE WHO HAS BEEN

NAUGHTY OR NICE.”

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TRUTH 3

YOUR VALUES ARE INVALUABLE

So, as long as a business doesn’t break any rules, consumers will support it…right? Not so fast. It’s not enough to adhere to the letter of the law; big businesses are also expected to espouse—and operate according to—a clearly communicated set of values. And consumers are making purchase decisions based on those values. A majority of mainstream consumers and more than 3 in 4 Prosumers

surveyed say they prefer to buy from companies that share their personal values. And around the same percentages say they’re more likely to buy from a company that is doing good things for the world. These numbers are even higher in many emerging markets, including Brazil, China, and India.

How important is it for a company to uphold strong values?

very important somewhat important

neither important nor unimportant

somewhat or very unimportant

58% 33% 8%

42% 38% 19% 2%

1%

PROSUMER MAINSTREAM

YOUR VALUES ARE INVALUABLE

20 / 5 4

How important is it for a company to express a vision of a better world?

very important

50% 34%

somewhat important

37% 38%

neither important nor unimportant

11% 24%

somewhat or very unimportant

2% 4%

PROSUMER MAINSTREAM

A clear set of values helps companies attract and retain the best employees

A clear set of values plays an important role in a company’s success

A clear set of values helps a company be more profitable

I am more likely to buy from a company that is doing good things for the world

I prefer to buy from companies that share my personal values

(% agreeing strongly/somewhat)

61%

63%

65%

65%

79%

56%

60%

60%

57%

77%

68%

70%

70%

74%

84%

68%

69%

70%

74%

84%

63%

66%

65%

68%

80%

PROSUMERMAINSTREAMMILLENNIALSGEN XERSBOOMERS

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Most of us can name companies off the top of our head that communicate strong values in one or more areas. Patagonia + sustainability, The Body Shop + Fair Trade, or IKEA + affordable design, for instance. And then there are the growing number of companies built on a Buy One, Give One model—from TOMS Shoes and Proof Eyewear to Canada’s Mealshare—ensuring that every purchase benefits a person in need. When consumers buy from purpose-driven companies, they feel good about their purchases, because they feel that in some small way they’re helping to make a positive difference.

Whereas corporate values too often used to be meaningless words intended to pretty up one’s mission statement, now they’re a point of differentiation and a builder of loyalty.

“Consumers want brands that stand for something—Ben & Jerry’s and Dove are examples. What we find is [that these brands] grow twice as fast as those who don’t have sustainability at the heart... That’s where the juice is, the pockets of growth...Consumers want brands to be more responsible.”

—JAN ZIJDERVELD, PRESIDENT, EUROPE UNILEVER

TRUTH 4MINDLESS

CONSUMPTION IS SO LAST

CENTURY

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Changes in business are taking place in tandem with shifts in how we consume. In developed markets especially, people are deriving less pleasure from the mindless consumption that started filling up our pantries, closets, and garages in the postwar boom of the 1950s. (For findings from our initial exploration of this movement, download the New Consumer in the Era of Mindful Spending white paper.) People still want bargains, of course, but they’re defining that differently. Instead of throwing their money away on masses of low-cost, disposable goods, many consumers are seeking to find a more substantive value in well-crafted, sustainably created items that will endure.

Around the world, even in emerging markets, mindful frugality is becoming more aspirational than excess. Our 2014 global study found that whereas just 49 percent of the sample admire people who can afford to buy whatever they want, 68 percent admire those who make an effort to reduce their consumption. Three-quarters of the Prosumers surveyed and two-thirds of mainstream consumers believe that overconsumption is putting our society

and the planet at risk. And more than half the sample agreed that they could happily live without most of the items they own.

WHERE’S THE VALUE IN OWNING MORE IF IT MAKES YOU LESS HAPPY, LESS SATISFIED, LESS PROUD?

What this trend means for manufacturers and retailers is that, while people still want low prices, it’s even more essential that products and services offer some sort of enduring value. Accumulating more “stuff” simply isn’t offering the satisfaction it once did. The rise of the sharing economy, the maker movement, and the push to repair items rather than replace them are all evidence of this more thoughtful mindset.

MINDLESS CONSUMPTION IS SO LAST CENTURY

It is very/somewhat important that a company offer high-quality goods and/or services

It is very/somewhat important that a company offer low prices

85%75%

95%85%

PROSUMERMAINSTREAM

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“THE NOTION THAT MANUFACTURERS ARE RESPONSIBLE FOR THE COMPLETE LIFECYCLES OF THE PRODUCTS THEY MAKE IS GAINING GROUND— INCLUDING AMONG THE COMPANIES THEMSELVES.”

Brands are responding to this emerging attitude in all sorts of ways, including offering products that can be upgraded, repurposed, or repaired. In the UK, parents who hate the waste of having to buy multiple car seats and boosters as their children grow can invest instead in the Kiddy Comfort Pro car seat, which adjusts to fit the needs of children from around 9 months to 12 years old. Want to upgrade your pots and pans but feel guilty about throwing out the old? When you buy certain sets of Calphalon cookware, you can box up your old set (any brand) and ship it to the company for free. Calphalon will then send the discards on to a recycling center and even mail you a couple of recycled-cotton shopping bags for your efforts.

The notion that manufacturers are responsible for the complete lifecycles of the products they make is also gaining ground—including among the companies themselves. MAC Cosmetics offers a free lipstick for every six empty cosmetics containers (compacts, tubes) returned. And Sweden’s Nudie Jeans is turning old pants into rugs.

The products are the same, but the consumer gains the added satisfaction of knowing that his or her purchase won’t end up in a landfill and may even end up doing some good.

TRUTH 5 HEROES

WANTED

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Our global surveys have consistently shown that people are hungry for sociopolitical change. At the same time, they’re disillusioned with politicians and governments, no longer believing them capable of solving the world’s most pressing problems. The prevailing view is that the greatest agents of change will be “the people”—through both their social activism and their consumption choices. But people can’t do it alone. There’s a growing sense that major change will require the active cooperation of big

business, given that far more power is concentrated within the largest companies than ever before in history. The consensus is that businesses not only should play a larger role in solving social problems, but actually bear as much responsibility as governments for driving social change—and may even be better suited to the task. The good news for brands: A significant majority of respondents are convinced that those companies that do drive positive change will be more profitable as a result.

The biggest companies should be taxed more to help repair the environment

The biggest companies should be taxed more to help reduce poverty and the inequality of wealth

(% agreeing strongly/somewhat)

59% 58%

59% 57%

61% 60%

64% 62%

71% 68%

HEROES WANTED

PROSUMER MAINSTREAM

MILLENNIALS GEN XERS BOOMERS

Which of the following do you believe will be the greatest agent of change?

The people, empowered by social media

PROSUMER MAINSTREAM

MILLENNIALS GEN XERS BOOMERS

30%

33%

30%

28%

37%

What we consume

29%

27%

28%

29%

23%

Government/politicians

21%

20%

21%

23%

19%

Corporations and companies

20%

20%

21%

20%

21%

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Businesses bear as much responsibility as governments for driving positive social change

The most successful companies in the future will be those that drive social change

I would like my favorite brands/companies to play a bigger role in solving social problems

(% agreeing strongly/somewhat)

72%

68%

64%

65%

79%

59%

62%

63%

60%

78%

60%

62%

62%

59%

78%PROSUMER

MAINSTREAM

MILLENNIALS

GEN XERS

BOOMERS

I believe companies have a more important role than governments today in creating a better future

(% agreeing strongly/somewhat)

How important is it for a company to drive social change?

60%

63%

55%

MILLENNIALS

GEN XERS

BOOMERS

47%

38%

13%

3%

30%

38%

27%

5%

very important

somewhat important

neither important nor

unimportant

somewhat or very

unimportantPROSUMERMAINSTREAM

32 / 5 4

How important is it for a company to fight injustice?

PROSUMER

PROSUMER

MAINSTREAM

MAINSTREAM

51% 33%

38% 34%

very important somewhat important

13%

24%

neither important nor unimportant

4%

4%

somewhat or very unimportant

This is a crucial moment for corporate brands. When we asked the respondents to our 2012 global survey who or what would be the greatest agent of the change they seek—the people, what we consume, government/politicians, or corporations and companies—16 percent chose “corporations and companies,” compared with the 24 percent who chose “government/politicians.” That eight-point gap has now virtually disappeared, with 20 percent of the 2015 sample pinning their hopes on corporations and 21 percent pinning them on government. In some parts of the world, reliance on government is even lower. For example, in India 39 percent of the sample look to businesses as the biggest change agents, compared with 18 percent who cited government. Other countries with particularly high hopes for business—and low hopes for government—include Germany (26 percent voted for business; 13 percent, for government), Japan (29 percent vs. 14 percent, respectively), and Italy (20 percent vs. 12 percent).

There also has been a slight drop-off in people’s confidence that social media has empowered them to effect change. In 2012, in the aftermath of the so-called “Arab Spring,” 35 percent of our sample believed that “people, empowered by social media” would be the greatest agent of change. That dropped four points in 2015, to 31 percent. The drop was even bigger among Prosumers, from 43 percent in 2012 to 37 percent in 2015. The percentage of people who feel they personally have a responsibility to change the world has also fallen slightly, from 70 percent in 2012 to 66 percent this year.

I have a responsibility to make the world a better place

(% agreeing strongly/

somewhat)

67%63%

2012 2015

83%80%

PROSUMERPROSUMER

MAINSTREAMMAINSTREAM

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What this means is that people are feeling somewhat less confident in their own power and that of government to fix the world’s problems, but they are feeling more confident in the ability of big business to do so. There is a tremendous opportunity for businesses to assume the mantle of “superbrand” and offer smart solutions to pressing issues. Consider the current refugee crisis in Europe. Whereas governments, by and large, have failed to act quickly and decisively, companies are responding through both corporate and employee structures. Deutsche Post DHL Group not only committed to €1 million in aid for refugees, but will provide housing and as many as 1,000 internships to refugees arriving in Germany. Some 10,000 employee volunteers will provide local support. Uber partnered with Save the Children on UberGIVING, a one-day initiative during which its drivers collected donations of clothing and toys in 20 European countries for free. And Daimler has begun to offer German-language courses and practical training to refugees, so they can ultimately be placed with other employers.

“THERE IS A TREMENDOUS OPPORTUNITY FOR BUSINESSES TO ASSUME THE MANTLE

OF ‘SUPERBRAND.’”

TRUTH 6

ACTING “LOCAL” PAYS BIG DIVIDENDS

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Solving global problems is important, but meaningful connections also must take place at the local level. A majority of our respondents—including nearly three-quarters of Prosumers—are looking for their favorite brands to play a bigger role in their local communities.

How important is it for a company to improve the communities in which it operates?

(% agreeing strongly/somewhat)

PROSUMER MAINSTREAM

I would like my favorite brands/companies to play a bigger role in my local community

72%

55%

52%

35%

36%

40%

very important

somewhat important

10%

21%

neither important nor

unimportant

3%

3%

somewhat or very

unimportant

ACTING “LOCAL” PAYS BIG DIVIDENDS

Traditionally, successful companies have supported the communities in which they operate through donations to local charities, support for the arts, and the like. Now businesses are beginning to take that a step further by actively working to revitalize communities on their own. When Zappos relocated its headquarters to Las Vegas, CEO Tony Hsieh set his sights on restoring life to the depressed downtown. He acquired and renovated dozens of properties, lured tech startups and small businesses, and created community gathering spots. Having invested $350 million of his own money into the Downtown Project, Hsieh theorizes, “If you fix the cities, you fix the world.” Similarly, Quicken Loans founder and chairman Dan Gilbert has spent more than a billion dollars purchasing and fixing up properties in downtown Detroit—and has persuaded other companies to move into the area as well. To ensure his workforce is personally invested in the city’s revitalization, he even instituted a policy whereby employees who purchase a home within the city limits and live there for

at least five years receive a payment of $20,000. According to Detroit mayor Mike Duggan, Gilbert has “dramatically sped up the redevelopment of downtown.”

CVS Health has taken a different, highly personal approach to helping the communities in which it operates. A little more than a year ago, the company stopped selling tobacco products, which it deemed incompatible with its mission to preserve and improve people’s health. While the move took a hit on the retailer’s bottom line, it is already beginning to pay off in the lives of some of its customers. CVS reports that in areas in which it has a market share of 15 percent or greater, sales of cigarettes have fallen 1 percent. “One percent may not sound like much,” said the company’s chief medical officer, Dr. Troyen Brennan, “but it’s a very substantial amount when you consider the mortality and morbidity associated with tobacco.”

“IF YOU FIX THE CITIES, YOU FIX THE WORLD.”

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TRUTH 7TOGETHER

IS BETTER

The world’s citizens aren’t looking for businesses to act as quasi-governments. On the contrary, around two-thirds of our global sample actually fear the power big corporations already wield. What they want to see are all the world’s players—governments, corporations, NGOs, citizens—working together to tackle problems that no single entity can solve alone. Prosumers and baby boomers especially are keen on such collaborations, with at least 8 in 10 in each group wanting to see corporations working with governments, governments working with NGOs and nonprofits, and businesses working with consumers to make the world a better place.

TOGETHER IS BETTER

It scares me that some big corporations have more power than actual countries

(% agreeing strongly/somewhat)

63%

62%

64%

71%

73%PROSUMER

MAINSTREAM

MILLENNIALS

GEN XERS

BOOMERS

40 / 5 4(% agreeing strongly/somewhat)

Corporations and governments should work together to make the world a better place

Governments and NGOs/nonprofits should work together to make the world a better place

Corporations and consumers should work together to make the world a better place

PROSUMER MAINSTREAM MILLENNIALS GEN XERS BOOMERS

73% 72% 72%

71% 71% 71%

77% 75% 76%

82% 80% 80%

88% 86% 87%

We can see the potential of such collaborations in the emerging concept of “nation branding”—a concerted effort to make a particular country attractive to outside investors, tourists, and its own citizens. Spain’s long-term branding project, “Marca España” (Brand Spain), is one such example. Under the oversight of a high commissioner, the initiative involves numerous government agencies, news organizations, nonprofits, and companies in industries ranging from food and beverages to fashion, communication, and technology. Together, these private and public entities are working to promote the principles and strengths of Spain both within and beyond its borders.

And we’ve seen a huge proliferation of businesses working with governmental agencies and NGOs in support of important causes—including Apple partnering with the World Wildlife Fund to improve forestry practices in China, and Procter & Gamble teaming with UNICEF to provide tetanus shots to children in developing countries. Increasingly, governments are calling directly on businesses for help, as Indian Prime Minister Narendra Modi

did when he asked the nation’s corporations to step up and share in the responsibility for a “Clean India.” Among those answering the call were Tata Consultancy Services, the country’s biggest technology services company, and Bharti Enterprises, parent of India’s largest wireless provider. Each company spent 1 billion rupees (approximately $16.5 million) to provide toilet facilities to schoolgirls and to people in rural areas.

We’re also seeing more partnerships between and among companies with like-minded social or environmental goals. We Mean Business has brought together thousands of businesses and investors in an effort to transition to a low-carbon economy. Its corporate advisory board is made up of leading global brands such as Unilever, IKEA, and Nike. In the words of advisory board member Steve Howard, chief sustainability officer at IKEA, “It’s time for businesses to stand together [to create] the future that we all want.”

“IT’S TIME FOR BUSINESSES TO STAND TOGETHER [TO CREATE] THE FUTURE THAT WE ALL WANT.”

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TRUTH 8 THE “GREATER

GOOD” STARTS WITHIN COMPANY WALLS

People aren’t just looking to see what corporate brands are doing in the “outside” world. They (women particularly) also want to know how companies are treating their own people, including employees and suppliers. When we asked respondents how important it is for a company’s CEO to do certain things, paying workers a fair wage and providing a pleasant work environment received higher scores than earning profits or even being

environmentally conscious. Three-quarters of our sample—including 87 percent of Prosumers—agree that companies should be legally obligated to provide a healthy work-life balance for their workers. And many are willing to vote with their wallets against those businesses deemed to have subpar labor practices. Years after a series of employee suicides, French telecom giant Orange is still struggling to resuscitate its image.

How important is it for a company’s CEO to do each of the following?

Pay workers a fair wage

Provide a pleasant work environment

Earn a profit for the company

Ensure the company is operating in the most environmentally sustainable way possible

Employ a racially diverse workforce

MALE FEMALE

84% 89% 83% 88% 81% 83% 78% 84% 61% 68%

(% choosing very or somewhat important)

THE “GREATER GOOD” STARTS WITHIN COMPANY WALLS

4 4 / 5 4

Companies should be obligated to provide a healthy work-life balance for employees

Thanks in part to progressive employment practices in Silicon Valley and other tech hubs, a growing number of companies are using workplace benefits and culture as a way to both recruit top talent and bolster their reputations among investors and the public. Havas Worldwide and Havas Creative Group CEO Andrew Benett explored this phenomenon in his book The Talent Mandate: Why Smart Companies Put People First.

Though it’s far from a trend, some employers are beginning to address the hot-button issue of pay equity. Whole Foods caps its executive pay at 19 times the average salary of its employees.And Namaste Solar, an energy company based in Boulder, Colorado, caps the ratio of its highest salary to its lowest at 3:1. While Swiss voters soundly rejected a referendum that would have capped executive pay in that country at 12 times that of the lowest-paid worker, the conversation around pay equity continues.

(% agreeing strongly/somewhat)

PROSUMER

MAINSTREAM

MILLENNIALS

GEN XERS

BOOMERS

73%

73%

76%

81%

87%

TRUTH 9

YOU’VE GOT TO KNOW YOUR AUDIENCE

46 / 5 4

As businesses consider how to strengthen their corporate brands, it’s important that they take into account the geographic markets in which they operate. We asked our global sample which of four areas they most want to see companies support: sustainability/the environment, poverty/income inequality, education, or culture/the

arts. Overall, environmental sustainability was the cause deemed most pressing, followed by poverty and income inequality. Only 6 percent of Prosumers and 12 percent of the mainstream said they neither want nor expect companies to be involved in good works.

Sustainability/the environment

Poverty/income

inequality Education Culture/the arts

I neither want nor expect companies

to “do good”

I most value companies that are doing good work in the following area

34% TOTAL

30% TOTAL

20% TOTAL

5% TOTAL

11% TOTAL

P: 37 MS: 33 M: 31 X: 34 B: 39

P: 33 MS: 30 M: 29 X: 31 B: 30

P: 19 MS: 21 M: 23 X: 19 B: 16

P: 5 MS: 5 M: 7 X: 4 B: 3

P: 6 MS: 12 M: 10 X: 11 B: 13

P=Prosumer, MS=Mainstream, M=Millennials, X=Gen Xers, B=Boomers

YOU’VE GOT TO KNOW YOUR AUDIENCE

Clearly, all of these issues—and many others—need to be addressed, but businesses stand to gain the most in terms of influence, brand loyalty, and reputation when they are seen as working hard to address the public’s most pressing concerns in whatever part of the world they’re operating.

Providing ways for the public to get involved in those solutions offers even more value to a brand’s reputation. Though it’s only available in a few areas in the US now, Google plans to expand Project Sunroof, an online tool that uses Google Earth images to help homeowners determine whether rooftop solar panels are a

financially viable choice and, if so, what size to install. Chinese automaker BYD is introducing battery-powered buses that can go a full day without recharging—giving commuters a more environmentally friendly way to get to and from work. In Mexico, cement company Cemex has worked to combat the severe housing shortage through a program that encourages groups of families and individuals to pool their resources to enable each, over time, to add a room onto their homes. Each of these initiatives amplifies its power by giving consumers a way to be a part of the solution they seek.

There were some important distinctions among the 28 countries surveyed, however.

In China, where the pollution can be so severe that government officials oftentimes advise the elderly and very young to remain indoors, two-thirds of those surveyed chose sustainability as the area on which they most want companies to focus.

And in Ireland, where the proportion of people living in consistent poverty has doubled since the 2008 economic crash, anti-poverty measures were the top choice of respondents.

In India, where 58 percent of children don’t complete primary school and only 10 percent go on to college, education was deemed the number-one priority for corporate good works.

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TRUTH 10A STRONG

LEADER IS A STRONG ASSET

Social media

P: 36 M: 25

Traditional media

P: 24 M: 19

Retailers

P: 21 M: 17

None of these

P: 6 M: 15

Employees

P: 46 M: 36

Brand champions (the most vocal customers/users)

P: 41 M: 31

Advertising agencies/marketers

P: 38 M: 30

The CEO

P: 36 M: 28

Who/what defines a brand’s core values (what it is and what it stands for)?

38%

26%

32%

20%

31%

17%

29%

13%

A STRONG LEADER IS A STRONG ASSET

When we asked our respondents who or what defines a brand’s core values, only 29 percent cited the CEO, well below the company’s employees (38 percent) and slightly below brand champions/loyal customers (32 percent) and advertising

agencies/marketers (31 percent). While that may well be the case for the average company, it doesn’t mean having a behind-the-scenes CEO is in the business’s best interest.

P=Prosumer, M=Mainstream

50 / 5 4

“IT’S NO LONGER ENOUGH FOR CORPORATE CHIEFTAINS SIMPLY TO

DELIVER PROFITS AND DRIVE GROWTH.”

Think about the companies that have had a strong impact on the public over the past decade or more, and you’ll find that they more often than not are headed by a charismatic leader—or at least by someone who spends a good deal of time in the media spotlight. Steve Jobs and Mark Zuckerberg have even become the subjects of Hollywood films.

What’s important about such CEOs is not their celebrity status so much as the extent to which people believe they have a clear vision, stand behind a strong set of values, and are leading

their companies in the right direction. It’s no longer enough for corporate chieftains simply to deliver profits and drive growth. Eighty-four percent of our global sample deem it important that a CEO serve as a role model within the company, and more than three-quarters think he or she must also serve as a role model outside the company. In other words, some of the new responsibilities being placed on companies are also being put onto their chief executives.

It’s all but certain that we’ll be seeing more and more CEOs using their businesses and media spotlights to drive change and positively impact their companies’ fortunes. In Brazil, a country struggling with corruption, aerospace company Embraer enjoys a good reputation in part because of CEO Maurício Novis Botelho. Under his leadership, the company has established the Embraer Institute for Education and Research—an organization that supports education and has even built one of the country’s top

high schools. A second one is planned. In China, the founder of Alibaba Group, Ma Yun (or Jack Ma), is known for more than transforming the way people buy things online. Yun is a role model and celebrity in Asia and beyond, having been deemed one of the most influential people in the world by Time magazine and one of Asia’s “Heroes of Philanthropy” by Forbes Asia. The billions of dollars he’s funneled into his philanthropic trust are endowing causes related to healthcare, education, and the environment.

How important is it for a company’s CEO to do each of the following?

PROSUMER MAINSTREAM MILLENNIALS GEN XERS BOOMERS

Serve as a role model inside the company (for employees)

Serve as a role model outside the company (for the general public)

Be “the face” of the company in the media

83% 68%

82% 68%

85% 69%

90% 73%

94% 78%

76%

76%

78%

82%

87%

(% choosing very or somewhat important)

5 2 / 5 4

CLOSING THOUGHTS: A PURPOSE BEYOND PROFITS IS GOOD FOR BUSINESS

Doing something good for society used to be a business “add-on.” Many of the largest companies operated under a sense of noblesse oblige that motivated them to fund the arts, support charities catering to the poor, and maybe even preserve some parkland so their favorite birds would have a healthy habitat. It’s different today. Contributing to the common good is now widely regarded as a core tenet of businesses that have reached a certain size and level of success.

It would be wrong to think of this new mindset as some sort of corporate “tax.” On the contrary, those businesses that are making a name for themselves as social activists and change leaders are finding that these activities actually contribute to their coffers, either directly or through the benefits of reputation. Operating more sustainably can bring immediate—and substantial—savings. A 2014 report by Ceres, David Gardiner & Associates, Calvert Investments, and the World Wildlife Fund found, for instance, that Fortune 100 companies collectively saved $1.1 billion by taking part in renewable energy programs.

For consumer-facing companies, there’s also growing evidence that people are making purchase decisions based on a brand’s perceived ethics and actions. A study from Cone Communications found that 90 percent of Americans are more likely to trust and stay loyal to companies that actively try to make a difference. And a Nielsen survey revealed that two-thirds of consumers say they will pay more for products and services that come from companies that are committed to making a positive social and environmental impact.

Corporate brands with a strong social purpose further benefit from an improved ability to attract civic-minded workers. The Cone Communications Millennial CSR Study found that companies with a purpose beyond profit are particularly well positioned to attract the newest generation of workers. According to the research, 76 percent of US millennials consider a company’s social and environmental commitments in deciding whether to work there. And 62 percent would willingly take a pay cut in order to work for a socially responsible company. Similarly, the Project ROI

study found that a strong reputation for responsibility can reduce staff turnover by 50 percent. That’s a valuable edge at a time when organizations are scrambling to compete for the very best talent.

What this all adds up to is that larger companies can no longer thrive by simply selling the goods they produce or the services they provide. If they’re smart, they’ll expend nearly as much effort communicating the essential truths of the company behind their brands, including its values, its commitments,

and the larger purpose that unites its workforce. For, as writer Henry David Thoreau put it,

Done right, a carefully chosen and clearly communicated corporate purpose will elevate the fortunes of both the business and its individual brands.

“Goodness is the only investment that never fails.”

5 4 / 5 4

Prosumer Reports is a series of thought leadership publications by Havas Worldwide—part of a global initiative to share information and

insights, including our own proprietary research, across the Havas Worldwide network of agencies and client companies. Havas Worldwide

is a leading integrated marketing communications agency and was the first to be named Global Agency of the Year by both Advertising

Age and Campaign in the same year. The Havas Worldwide network is made up of 11,000 employees in 316 offices in 120 cities and 75

countries, and provides advertising, marketing, corporate communications, and digital and social media solutions to some of the largest

global brands. Headquartered in New York, Havas Worldwide is the largest unit of the Havas group, a world leader in communications

(Euronext Paris SA: HAV.PA).

http://mag.havasww.com/prosumer-report/

Follow us on Twitter @prosumer_report.

Or contact Matt Weiss, global chief

marketing officer, Havas Worldwide,

at matt.weiss@havasww.com.

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