When Angered, That Free Market Can Bite Really Hard

Michael Hedges March 12, 2022 Follow on Twitter

The usually happy marketing people absolutely grimace at the thought of taint by proximity. They fear those beautiful creations, not to forget their client’s products and services, are damaged by association. Brand safety has turned the usual grins to frowns.

Brand safety became a buzz way back in 2018 when “fake news” was added to the great Interactive Advertising Bureau (IAB) list. Advertisers were warned to avoid extremist platforms and others displaying atrocious content. This was once called reputation management. Newspapers howled at the moon over their freedom of expression. Broadcasters, typically regulated in other ways, were generally compliant. This left those digital platforms, which were scooping up more and more ad spending, to relentless pressure.

The World Federation of Advertisers (WFA) has given brand safety particular focus. The group represents the brand owners, those who pay for advertising fun. “In light of the horrifying events in Ukraine, the global marketing industry must speak out,” said WFA chief executive Stephan Loerke, quoted by MarketingWeek (March 11). “Every company will have to make its own decision, but our recommendation is that media investment and marketing in Russia should end for now.” The group polled a set of “global brand owners” and found three in four have “relocated, reduced or cut advertising investment in Russia since the invasion started.”

Notable for its auspicious entry into the Russian marketplace, fast food icon McDonald’s has shuttered its 850 Russian outlets. Starbucks, Ikea and Zara have also headed for the exits. A Yale University study counts more than 300 international brands separating themselves from the Russian Federation, noted Deutsche Welle (DW) (March 10).

The symbolism of the McDonald’s exit has been widely noted. Few Russians, arguably, liked those burgers. But their physical presence in those restaurants since 1990 spoke of brand strength. “We thought it probably tasted like freedom and we wanted to sample it,” said Russian photographer Mitya Kushelevich, quoted by the Guardian (March 12). Levi Strauss, seller of the jeans brand coveted by young Russians for a generation - and reviled by authorities - also closed up shops in Russia last week.

Western consumer brands succeeded in Russia - and elsewhere - because strong economic ties through a globalized marketplace reinforced stability, wrote New York Times columnist Tom Friedman in the now infamous op-ed the "Golden Arches Theory of Conflict Prevention". “No two countries that both had McDonald's had fought a war against each other since each got its McDonald’s,” he wrote in 1996. He has been defensive about it ever since. And now it has, as Julian Borger noted in the Guardian, come full circle.

Award submissions and delegations from Russian organizations will not be allowed at this year’s Cannes Lions advertising festival, said organizer Ascential in a statement (March 5). “We stand together with our friends in Ukraine and our many partners and community members in Russia who strongly oppose the actions of the Russian Government.” Ascential is waiving entry fees from prospective Ukrainian participants. The very symbol of the global free-market - the World Economic Forum - is freezing “all its relations with Russian entities, and will not engage with any sanctioned individual or institution in any of our activities, inclusive the annual meeting,” said a statement, quoted by AFP (March 9).