Cultural controversy is no longer just a reputational risk or buzz generator: it has become a financial instrument that speculators can game in real time, says Yakov Bart.
A series of controversial ads, from American Eagle’s denim campaign featuring Hollywood starlet Sydney Sweeney, to Dunkin’s “Golden Hour Refresher,” set off a PR firestorm this week, as social media users accused the brands of racism.
The American Eagle ad, in particular, in which Sweeney not-so-subtletly alludes to her good looks through the wordplay of “genes” and “jeans,” touched off a debate about whether the apparel company’s genetics theme reinforces ideas linked to white supremacy.
“Genes are passed down from parents to offspring, often determining traits like hair color, personality and even eye color,” she says. “My jeans are blue.”
Then the tagline: “Sydney Sweeney has great jeans.”
Yakov Bart, professor of marketing and Joseph G. Riesman Research Professor at Northeastern, says campaigns like these court controversy at their own expense — not least because investors can weaponize the backlash to the companies’ detriment.
“From a short-term brand awareness perspective, the campaign clearly did a great job as evidenced by millions of organic impressions generated by the ensuing backlash,” Bart says.
“But that awareness also comes with a price: a narrative about race and privilege across multiple public platforms that the company has yet to comment on may have negative consequences for the brand in the long term,” he says.
One immediate effect was a deluge of commentary on the situation, which divided users between those who saw the ads as promoting eugenics — and others who dismissed the critics and criticism as “woke” nonsense.
“These days, a blond, blue-eyed white woman being held up as the exemplar of ‘great genes’ is a concept that maybe shouldn’t have made it past the copywriters room,” wrote Jenny G. Zhang for Slate.
“You wait your whole life for an advert with a weird fixation on genetics to come out and then, what do you know, two come along at once,” wrote Arwa Mahdawi for The Guardian.
Bart notes that what makes the Sweeney flashpoint different from the Kendall Jenner Pepsi ad or Gillette’s “toxic masculinity,” #MeToo campaign, is that so-called meme stock traders have taken advantage of the situation, boosting trading volume by some 89% despite a 2.25% drop in shares.
Indeed, polarizing ad moments have become new trading catalysts, Bart says, highlighting the growing risks facing marketers at a time when branding and political speech are increasingly hard to separate. The day the campaign dropped, American Eagle’s shares jumped up 4% before dipping amid the uproar.
But, Bart observes, a “highly motivated crowd” was incentivized “to keep the outrage — and therefore volatility — going beyond the usual weeklong news cycle.”
“In other words, cultural controversy is no longer just a reputational risk or buzz generator: it has become a financial instrument that speculators can game in real time,” Bart says.
“Brands venturing into edgy creative territory must therefore manage not only consumer sentiment, but also an investor layer that can amplify, extend and even monetize the backlash long after most shoppers have moved on,” he says.
Since the COVID-19 pandemic, meme stock traders have seized on opportunities to make a quick buck off viral headlines and sudden surges in public sentiment — often with little regard for a company’s fundamentals.
In 2021, after a handful of Wall Street hedge funds tried to “short” GameStop stock, a small community on the social media platform Reddit rallied to save the failing company by trading the stock higher and higher, sending its stock price north of $1,700 at one point before it all came crashing down.
Experts say meme traders — who take aim at powerful Wall Street financiers, oftentimes to disrupt organized economic activity — are here to stay.
American Eagle’s total sales were down 5% between February and April of this year compared to a year earlier, ABC News reports.