What's Next, Now: June 2023
This month, our crystal ball predicts the rise of trade schools, coming AI regulation, and more.
Brand trust can be built and sustained for long periods of time, barely shifting, and then lost in an instant — as we saw with SVB’s sensational fall from grace. At a time when distrust in societal institutions triggered by economic anxiety, disinformation, class divide, and a failure of leadership is at an all-time high, businesses need to remain acutely aware of the relationship they have with their consumer base. Two surveys related to brand trust and reputational rankings were recently released by Morning Consult and Axios Harris Poll, shedding light on which brands are successfully navigating these factors.
In both, USAA is a prime example of a brand maintaining leadership status through a laser focus on their key audience — earning their trust through daily action. Serving only military families, USAA’s narrowly-defined niche allows them to effectively tailor products and quickly pivot based on customer feedback.
Unsurprisingly, the brand ranked number one on this year’s Axios Harris Poll is Patagonia, which recently transferred ownership to two non-profit organization trusts, boldly demonstrating the brand’s commitment to sustainability. Tesla, on the other hand, saw the largest drop year-over-year, plummeting from 12th in 2022 to 62nd in 2023. The electric vehicle maker faced negative press around factory conditions and accidents caused by self-driving technology, but CEO Elon Musk’s provocative Twitter takeover played the largest role in the drop. Twitter itself ranked 97th among the 100 brands surveyed.
Musk’s takeover exacerbated consumers' dwindling trust in social media brands since the 2018 Facebook/Cambridge Analytica scandal. This year, Facebook parent company Meta and TikTok landed rankings at 96th and 94th, respectively.
Brand trust starts internally through fostering a company culture that, at its core, places people over profits. Brands need to understand what their unique trust covenant is with their customers. How are they putting them first? Prioritize deeds over words and demonstrate that commitment through action — daily.
This Pride month, brands are experiencing backlash that hasn’t been seen in recent years. First was Bud Light for its brand partnership with transgender influencer Dylan Mulvaney. Then Target, for its annual pride clothing collection, which included items supporting the trans community. Brands like the L.A. Dodgers, The North Face, and even Chick-fil-a and Cracker Barrel are facing the fallout of objections from a vocal minority. Some companies are acquiescing, while others are standing their ground.
When calls for a boycott began, Bud Light fumbled, neither defending nor rescinding their decision to work with Mulvaney for two full weeks. Once the CEO did finally comment publicly, his statement was met with widespread dissatisfaction. Supporters interpreted it as pandering, while detractors found it weak. As a result, Bud Light lost its crown as the top-selling beer in the country, with sales dropping almost 35% year-over-year. Fearing a similar situation, Target also caved to demands. The company pulled some of its Pride products from shelves, claiming the decision was made to protect the safety of its employees. But when The North Face was hit with similar attacks, the brand took a different approach: issuing a statement leaving no question the company stood by its campaign.
While in previous years much of the negative commentary surrounding Pride focused on brands being viewed as performative and rainbow-washing, this year hit different. Brands must be prepared to take on increasing calls for boycotts. According to RILA, a social listening agency, there were fewer than 400 social posts calling for Pride-related boycotts in May and June of 2022. This year, there were more than 15,000 in May alone.
Taking a social stance always comes with risk, and it’s essential to be prepared and see around corners. Bud Light is a clear example of what can happen when you’re not committed to your actions. It’s vital for brands to be intentional about where and how they show up and to expect and prepare for all possible reactions. Once a campaign is launched, staying true to your brand values and holding steadfast is key.
While the tech world is known for rapid advancement, legislation keeping it in check is notoriously slow. The breakneck speed of adoption for new generative AI tools (such as ChatGPT, which amassed a record-setting 100 million users in just two months) has governments struggling to keep pace. As they debate the best ways to embrace innovation they must also protect against what could be, according to some AI leaders, the end of the world as we know it.
The EU will likely be the first governing body to issue AI regulations, as it has had a bill in the works for the past two years. The legislation, known as the AI Act, focuses on creating rules for data quality, transparency, human oversight, and accountability. The U.S. government is working on its own regulations, calling on prominent tech CEOs from Google, Microsoft, and OpenAI (the creator of ChatGPT) to advise.
Regulators are also attempting to rein in social media as data privacy concerns continue to rise, but efforts are often hindered by quick retaliation from the companies under attack. Meta was hit with a record-high $1.3 billion fine by the EU for not protecting user data as it moved from Europe to the U.S. The company plans to appeal the decision while European and American officials negotiate a new data-sharing pact. Due to its connections to China and vast stores of user data, TikTok has been the target of regulatory ire since its rise to prominence, but no national-level bans are yet in place in the U.S. or Europe. Montana moved to ban the app in the state, and TikTok quickly countered with a lawsuit.
Regulation is coming, but the federal lag time may keep us on the edge of our seats for a while. Even after an act is passed, it can take years before it is actually enforceable. The General Data Protection Regulation (GDPR), one of the most influential recent pieces of technology legislation, was passed in 2016 — but it was two years before it went into full effect, and another six months for the first fine to be set. In the meantime, the onus is on brands to determine their guardrails for the ethical and responsible use of AI and other technologies.
The number of students nationwide seeking four-year degrees in computer and information sciences and related fields shot up 34% to approximately 573,000 between 2017 and 2022, according to the National Student Clearinghouse Research Center. However, in 2022, 1,054 companies in the tech sector registered 164,411 layoffs, causing many recent and soon-to-be college and high school graduates to stress about finances and employment potential.
Yet some of that worry may be unfounded. Due to comparatively lower levels of education, experience, and transferable skills, people 24 and younger have historically experienced 2.6 times the rate of unemployment compared to people ages 25 and older. However, this changed when pandemic-driven labor shortages forced employers to look to younger applicants that had been previously overlooked. The youth unemployment rate for 16-24 year olds young people hit 7.5% in March — a 70-year low.
Employment fears also have many young people turning to trade education. Recent data released by National Student Clearinghouse Research Center found enrollment in trade schools has been sharply increasing since 2019, while enrollment in two- and four-year public college programs continues to decrease. Part of the increased interest in trade is due to once again being able to offer hands-on training post-pandemic, but that’s not all. Incoming students are also motivated by cost and the ability to find jobs post-graduation. Not only are public universities twice as expensive as a technical education, but 41% of recent college graduates in 2020 were underemployed.
As the class of 2023 ceremoniously tosses their caps into the sky, anxiety about finding employment sets in. New grads are faced with a turbulent economy, but unemployment levels remain low. In April, unemployment dropped from 3.6% to 3.4%, according to the Bureau of Labor Statistics. While Big Tech is still struggling with interest rate hikes and rightsizing from hiring during the pandemic, other industries, including healthcare, hospitality, and manufacturing/construction simply can’t find enough workers.
Though many have tried and failed, Apple wants to be the one to finally make VR a thing.
After two years of litigation and infighting in the golf world, the PGA Tour has agreed to merge with Saudi Arabia-backed rival LIV Golf.
Can a connection to the internet stop ChatGPT from hallucinating incorrect information?
Twitter might not be ready to take on its cable competitors just yet as an all-in-one media platform. Ron DeSantis attempted to launch his presidential campaign using a livestream on the platform but was hindered by numerous tech glitches.
Want to hear more? Check out our free newsletter The Spark for the biggest digital marketing updates, tips, and trends of the week in your inbox. From SEO to social media to content marketing, we’ve got you covered.
Copyright © 2023 Tier One Partners is a women-owned full-service PR, content, and digital marketing agency. We work with innovators in B2B and B2C technology, digital healthcare, financial services, energy tech, and manufacturing to develop award-winning creative, data-driven strategies that propel them to industry leader status. From day one, we’re committed to earning our clients’ trust, sharing their vision, and embedding their purpose into everything we do. To learn more, visit wearetierone.com.