How purpose agencies are adapting to marketers’ shifting priorities

Marketers are shifting gears on purpose, and advertising agencies are repositioning and broadening their services to accommodate the change. While there are brands that remain rooted in social purpose, such as Patagonia and Ben & Jerry’s, there is also a growing tide of brands cutting back. Lowe’s, Ford, Harley-Davidson, Tractor Supply Co., Jack Daniel’s marketer Brown-Forman, John Deere and Molson Coors, for example, have all recently scaled back DEI initiatives due to a conservative groundswell. Bottom-line concerns are also turning purpose—which does not normally have an immediate impact on sales—into a nice-to-have rather than a need-to-have at some companies. Also read: The best purpose-driven ads of 2024 Many marketers are changing their approach to purpose rather than abandoning it altogether. Some are pivoting away from social impact, concentrating instead on how their company provides value to consumers. Others are working more on reactive, quick-turn campaigns, rather than throwing their dwindling marketing budgets behind long-term purpose initiatives. And then there’s President-elect Donald Trump’s impending administration, which could have serious implications for purpose. Several executives said that they believe purpose, in some form, will weather any potential storm. A-List & Creativity Awards Enter for a chance to be recognized as the best in advertising Submit your entry here The state of purpose Purpose marketing has slowed in recent years due to a slew of factors, including consumer skepticism driven by inauthentic brand activism, industry executives and consultants said. “A lot of companies got a little bit too much up on the high horse,” said Thomas Kolster, founder and creative director at Copenhagen, Denmark-based Goodvertising Agency, which advises companies and organizations on how to turn environmental, societal and health risks into market opportunities. “It became much more of a value crusade, rather than actually delivering value to people, and that just ends up pissing people off.” Also: Brands pull out of the HRC’s Corporate Equality Index Consumers want honesty and pragmatic aspirations from brands—not “preachy” messaging or “empty promises,” said Patti Williams, associate professor of marketing and vice dean of Wharton Executive Education, who in 2022 co-authored a paper on brand purpose. (Research from CivicScience in 2023 suggested people care less about brands’ social stands than they did a few years ago, too.) And, of course, spending declines are playing a role. Average marketing budgets have fallen to 7.7% of overall company revenue, down from 9.1% in 2023, according to a Gartner survey in May. CMOs are being tasked with doing more with less, so they’re more conservative in “the bets they’re willing to take,” said Jay Wilson, VP and analyst at Gartner. There’s also some conflation between social impact (or social purpose) and brand purpose, driven in part by the pandemic and social justice movements that formed after the murder of George Floyd, several executives told Ad Age. The former refers to actions on social issues, while the latter is the company’s broad reason for existing and the value it brings to consumers. More: Why brand purpose is overrated and what people want “People think that purpose is just about doing good in the world,” said David Angelo, founder and chairman of David & Goliath, but brand purpose is just as valid. Shifting asks and strategies Some marketers are now focusing on their brand purpose—and message—rather than social impact, according to industry insiders interviewed by Ad Age. “That’s sort of the evolution” from two or three years ago, said Gian Carlo Lanfranco, co-founder and chief creative officer at indie agency L&C, which has created campaigns such as “Piñatex” and “Malnutrition labels” for Dole. “Before, you talked about the brand through the eyes of social responsibility. And now it’s like, ‘Okay, let’s park this a little bit, and let’s talk about the brand through the eyes of the brand.’” Brands are also looking to be a bit lighter and entertaining in their approach to purpose, Lanfranco said. He pointed to a video Bark made to promote airline Bark Air via Tombras, in which the dog care brand’s CEO stuffed himself in a crate and sat in the cargo hold for hours to illustrate how canines experience flying, as an example. That stunt “shows the commitment of the brand—what they stand for—without preaching,” he said. Michaels’ recent holiday spot from Oberland, which shows off supplies including trees, decor, ornaments and DIY supplies, similarly demonstrates the retailer’s purpose: creativity. “You might be like, ‘Is that purpose? It looks like a holiday campaign to me,’” said Drew Train, CEO of Oberland. “But yeah, it is.” With shrinking budgets, marketers are asking agencies to produce more earned media and reactive purpose campaigns, as opposed to broader initiatives, Lanfranco said. “It’s more of that work and less of, ‘Here’s a long-term commitment to a sustainability effort that we’re starting here, and it’s going to end in 2045,’” he told Ad Age. More from Ad Age: Purpose marketing hits and misses To change or not to change Brands’ changing views on purpose will force agencies dedicated to the space to shift their approach, said Allen Adamson, co-founder of brand and marketing consulting firm Metaforce. “You’re going to see these agencies repositioning or saying, ‘We do purpose and a whole lot more,’” Adamson said. Solely offering to support marketers with purpose doesn’t have as much “market traction” as it once did, he added. L&C claims to have avoided the impact of cutbacks because it isn’t exclusively focused on purpose. “We’re still a creative agency … We do a variety of work,” Lanfranco said, adding that he expects the shop to do a “little less” purpose work moving forward. Some purpose-focused shops may make changes to their strategy and capabilities, but that doesn’t necessarily reflect the broader state of the industry, said Oberland’s Train. “Any business who starts to experience a downturn—whether it’s individual or part of a downturn in their category—will try to reposition, react and try something new,” said Train. “That’s a very natural, rational decision.” Read about all of the 2024 Marketers of the Year StrawberryFrog, a purpose agency that has been around for more than 25 years, shifted its business strategy at the beginning of the year to focus less on social impact work and more on helping companies make “purposeful” decisions as they transform their business, according to Founder and CEO Scott Goodson. That might include, for example, helping a company learn how to implement AI into its business. As a part of the strategy maneuver, StrawberryFrog launched two other business units this year. Mach One is an AI agency and Inplural is focused on product and design. “We realized that today there are 500 other types of issues that have to be solved for clients and we can apply our strategic and creative excellence to solve those problems,” Goodson said. How the political climate will evolve purpose President-elect Trump’s new administration could influence purpose marketing in various different ways, according to experts. Predictions: How the election might impact marketing The recent U.S. election highlighted flaws in how purpose marketing has been managed, as it often fails to connect with the concerns of ordinary people. “We learned that most people aren’t really that concerned about the end of the world, but more about the end of the month,” Kolster said. The impending Trump administration could galvanize purpose marketing, forcing brands to reframe issues to better connect with their audiences, he added. Many brands will likely focus more on “safer” issues such as ending hunger, rather than topics that have been deemed controversial, like DEI and identity rights, said Train. “People are still going to move forward with reducing plastic in their packaging, regardless of who’s president,” he said, adding that some companies will continue with purpose but speak less loudly about it. Brands will also likely focus on understanding people in Middle America, which became central to Trump’s victory, said Paul Jankowski, founder and CEO of New Heartland Group, a marketing agency that aims to help brands connect with consumers in the Midwest, Southeast and Southwest. These consumers are looking for brands to provide practical benefits such as cost-savings and durability, Jankowski added. “We need to get closer to everyday people’s challenges,” Kolster told Ad Age, “and I wholeheartedly believe there’s a lot companies can still do in this space and push this agenda forward, no matter the administration.”

How purpose agencies are adapting to marketers’ shifting priorities

Featured Stories