This week we’re looking at how some companies claim their brand, product, or service is purposeful or ethical while being unable to substantively back up their claims, or worse, hypocritically harming the cause they claim to support.
Not all scams explicitly steal your money, but every day consumers are susceptible to misinformation and fraudulent schemes that look to persuade their purchasing behavior and can ultimately cause consumers to invest large amounts of money with fraudulent companies. Below we’ve outlined some of the most common marketing schemes intended to capitalize on consumer goodwill.
Greenwashing and environmental hypocrisy
The term “greenwashing” refers to a marketing tactic used by companies with otherwise dubious environmental practices to claim their product is sustainable.
Greenwashing isn’t new, with the term being coined in 1986, however with the rise of the environmentally conscious consumer (looking at you Millenials and Gen-Z), companies have increased eco-marketing and labeling in order to cater to this new consumer, sometimes without changing their practices or substantiating their claims.
In the fiercely competitive airline industry, low fares are everywhere and airlines are now touting lower emissions in a bid to win consumer business. But in an industry that is highly polluting, consumers should be asking “What are these lower emissions based on?” In February 2020, the UK’s Advertising Standards Authority (ASA) pulled a radio and television advertisement from airline Ryanair offering flights for “as low as £14.99 one way” on the UK’s "lowest emission airline". The low emissions claim was based on data from 2011, almost a decade out of date, and they could not cite recent evidence to show they had maintained status as the leading low emission airline.
Not all greenwashing occurs in explicit advertising campaigns for high visibility companies such as airlines. Often, consumers can be fooled by seemingly innocuous, but misleading labels of everyday items. In 2013, The US Federal Trade Commission (FTC) brought a case against AJM Packaging Corporation for marketing its papers products (disposable plates, napkins etc.) with labels claiming they were biodegradable, compostable, or recyclable. When the FTC asked them to validate their claims around biodegradability, AJM was unable to do so and cited no evidence.
A Hotwire survey from January 2019 stated that 47% of consumers worldwide switched to a different product or service because a company violated their personal values. The number one reason consumers switched? They wanted to purchase from a company protecting the environment. The monetary incentive is high for businesses to make their products more sustainably competitive, even when it means resorting to misleading marketing practices.
Of course not all businesses are bad actors. Swedish furniture brand and industry giant IKEA recently committed to invest €200m in green energy and forest planting, and supporting their suppliers in converting to sustainable energy use. Not only have they committed to revamping their supply chain to make it more sustainable, but they’re also looking at the lifecycle of their products, which have often been criticized for poor quality and quickly ending up in landfills. IKEA recently launched a recycling program aimed at refurbishing and reselling furniture, in an attempt to reduce landfill waste and increase the longevity of their furniture.
Other brands, such as Patagonia, consider themselves to be equal parts business and climate activists, and build sustainability into their business model by committing to fair labor practices, ethical sourcing, and committing a portion of sales to environmental causes.
These holistic approaches to sustainability are the standards to which consumers should hold businesses when they want to invest in products and services that claim to be environmentally friendly or sustainable.
Profiting for a cause
Over the years, consumers have evolved from concerns about greenwashing, to concerns about goodwashing, which include companies that have questionable supply chains, use exploitative labor, or other ethically questionable practices but claim their product or company is ethical and supports the greater societal good.
A 2018 global survey by Accenture of nearly 30,000 consumers uncovered the following:
- In the UK 66% of consumers want greater transparency in how companies source their products, ensure safe working conditions and their stance on important issues such as animal testing
- In the US, 64% of consumers say their purchasing consideration is driven by a company's ethical values and authenticity
The numbers are clear that consumers care about brands who are investing in a purpose or mission and they are willing to voice those opinions with their wallets. This hasn’t gone unnoticed by brands and many of them are willing to leverage these trends in their marketing efforts.
In 2017, Audi spent millions of dollars on a super bowl commercial making a bold statement that they were committed to equal pay for equal work, taking a stance on the much publicized and highly scrutinized women’s pay gap. Discerning consumers quickly revealed that at the time of airing, Audi had no females on the executive team, sparking much criticism and conversations about the importance of hiring practices and opportunity.
While oftentimes these advertisements come off as tone deaf at best, at worst they are knowingly capitalizing on trends in social good and consumers give these business money under the false pretense that they are supporting a social cause.
Companies making empty promises or lacking substantive policies to support bold statements can be seen in vivid color with the uptick in rainbow-washing during Pride month. Rainbow-washing is a form of goodwashing where companies and businesses who don’t regularly engage in initiatives supporting LGBTQ+ communities push out Pride marketing and advertising campaigns. And while it’s worth noting that allyship with the LGBTQ+ community can be commended, many companies are looking to profit off their supposed support.
In 2018, sportswear brand Adidas was called out for its hypocritical rainbow-washing campaign during Pride. Adidas was selling a “Pride pack” with rainbow versions of their classic sneakers. Simultaneously, they were sponsors of the World Cup in Russia, where the LGBTQ+ community is persecuted and LGBTQ+ activity is illegal and can incur fines and jail time. Adidas was criticized for sponsoring an event where it would be unsafe for LGBTQ+ athletes and fans, Adidias core consumer base, to participate or spectate at an event.
If you want to support a company that truly supports the LGBTQ+ community, consumers should look beyond any splashy rainbow advertising (especially if it’s during Pride month) and dig deeper into when a company mentions its LGBTQ+ initiatives and how they are standing up for this community. If the business supports LGBTQ+ on a year round basis and has workplace policies to recruit, protect and support the LGBTQ+ community, they can stand behind their Pride campaigns and consumers can confidently support a business that aligns with these values.
Health claims and misleading packaging
Scams that involve packaging and marketing misinformation go beyond claiming environmental and societal good. For years, businesses have deceived us into believing certain ingredients or items are healthy. Go down any supermarket aisle and you’ll see bright food labels with bold statements claiming “HEALTHY,” “WHOLE” or “NATURAL.” These sound healthy because of course we want our foods to be as wholesome and natural as possible, but many of these terms don’t carry any certification or formal validation behind them and are essentially made-up marketing terms attempting to convince consumers that the contents of the container are good for you.
A New York Times’ Magazine article highlights the story of Lunchables, the popular prepackaged meal for children, who after being criticised for its nutritional content attempted to appease their critics. Looking to replace the sweet treat inside lunchables with something healthy, they tested fresh fruit but discovered it would spoil too quickly and was too expensive, so instead they opted for mandarin oranges and pineapple slices doused in high-fructose corn syrup and fruit concentrate. They then marketed this fruit concoction as a “more healthful” option with “fresh fruit”, despite the fact that the fruit was highly processed and contained over 70 additives and preservatives, many of them linked to health problems in children.
These scams are also taking place at an industry-wide level. It took nearly half a century to uncover a scam that had far reaching tentacles that influenced established respected medical institutions such as the New England Journal of Medicine, all the way to the United States Department of Agriculture (keeper of the US federal government’s dietary guidelines).
Fifty years ago, the sugar industry backed a smear campaign against fat, recruiting scientists, medical experts, and journalists to conduct studies that would put the blame on fat for the rising percentage of obese Americans, and that sugar “does not have a unique role in heart disease.”
Modern research tells us now that there is a strong indication that high sugar intake is strongly correlated with heart disease, as well as diabetes, higher blood pressure, and weight gain, but it took almost 50 years to reverse the health claims that the sugar industry paid to make commonly accepted.
Since these “findings” were published in 1967, there have been increased restrictions around who can fund academic research and disclosure requirements when private industries recruit scientists to make sweeping health claims. However, 50 years of health misinformation arguably exacerbated an accelerating health crisis and resulted in consumers being duped into purchasing products based on the assumption that they were choosing a healthy option.
There has been increased oversight for misleading packaging and health claims with many government agencies issuing restrictions around use of buzzwords like “organic.” However, consumers should still approach health claims with a healthy amount of skepticism, especially when the health claims seem too good to be true or can’t be easily substantiated.
How consumers can be proactive about protection
Industry watchdogs and oversight agencies, such as the ASA and the FTC, continue to issue guidance around marketing and packaging. As they prosecute bad actors we will, hopefully, see an increased level of transparency around health and value-centric marketing campaigns.
However, consumers still need to approach these marketing schemes with a healthy level of skepticism and take the initiative to protect themselves (and their wallets) from sketchy businesses and brands looking to profit from false marketing claims. We’ve outlined a few steps consumers can take to protect themselves and bring trust back to their purchases.
Educate yourself. Whether you want to support brands that empower minorities, reduce your carbon footprint, or eat foods that support your preferred diet, the first step is education. Government oversight agencies and certifying organizations that are free of financial influence from private enterprise, often issue the most unbiased guidance that help consumers decrypt confusing labels and industry shorthand. Consumers can make more informed and educated purchase decisions that align with their values after arming themselves with thorough research.
Research companies. Oftentimes, general knowledge of an industry isn't enough to make an educated decision about whether or not a business’ claims are legitimate. Uncensored third-party sources are the best place to review aggregate information about a company. On Trustpilot, you can read real reviews from consumers who have had genuine experiences with businesses. Discerning consumers regularly leave revealing information about a business, their practices, and values in their reviews. You can also see how companies are receiving and responding to reviews and how many reviews they are flagging to make informed decisions about how the company operates.
Share your discoveries and ask more questions. It’s likely that you’ve had a revealing experience with a business, and have information that other consumers want to know about. You can share that experience by leaving a review on Trustpilot. And if perhaps, your experience with a business led you to more questions about their values, you can leave that question in your review. You’ll find that many businesses respond directly to reviews and use Trustpilot to increase their transparency to consumers, so you can buy with confidence.