Reversing the Decline of American Brands in Europe

Even before the pandemic, European attitudes toward American brands were trending downward

By Chris Warren

Alexander Spatari/Getty Images

The pandemic continues to upend society. It’s changing how people work, how kids attend school, and the ways in which consumers receive and react to brand messaging. Indeed, consumer attitudes are in constant flux due to the health crisis, and marketers are forced to navigate a very tricky terrain.

While the challenges are universal, there are particularly ominous signs for U.S.-based brands from across the pond. According to a recent Morning Consult survey of 5,000 adults in France, Germany, Italy, Spain, and the United Kingdom, 40 percent feel less favorable toward U.S. brands as a result of America’s response to the coronavirus.

The survey was released this summer, at the same time the European Union decided to ban travelers from the U.S., making the country a global pariah.

Further analysis of Morning Consult Brand Intelligence tracking data uncovered more reasons why companies and organizations that identify as uniquely American but rely on global sales should be concerned.

According to the survey, 40 percent of the respondents — including 49 percent of German adults — believed American companies weren’t doing enough in response to the virus. Worsening perceptions of American brands among European consumers have translated into a sharp decline in purchasing, Morning Consult said.

Even well before the pandemic, European attitudes toward American brands — and America as a whole — were trending downward.

“There’s a lot going on that antagonizes Europeans, like the U.S. stance on climate change, trade, tax evasion…and so on,” says Dr. Tim Wragg, insights CEO for Kantar North America. “And that was before the U.S. government’s handling of the coronavirus, protests over social injustice and police brutality, high unemployment numbers, and political division across the country.”

“It’s not just that America’s brand has been tarnished around the world as never before, it’s also that nationalism and buying local is happening everywhere.”
— Allen Adamson, co-founder of consultancy Metaforce

The survey results are bound to raise concerns among American brands that have traditionally relied on robust European sales and, for many companies, a springboard to penetrate other markets throughout the world. But the risk is likely more acute for particular types of brands.

“I do think it presents a risk for brands that really trade on America’s Wild West imagery,” says Allen Adamson, co-founder of the product and marketing consultancy Metaforce and executive in residence at NYU Stern’s W.R. Berkley Innovation Labs.

For years, Adamson says, there was no downside to associate a brand with America’s image as a place where people dream and do big things, like putting a man on the moon.

“Now we are the gang that can’t shoot straight. I think it’s something those brands have to watch out for,” Adamson says, adding that fashion and food brands are particularly vulnerable in the current climate because they are more likely to have brands that are more instinctively associated with America in the minds of consumers. “It’s not just that America’s brand has been tarnished around the world as never before, it’s also that nationalism and buying local is happening everywhere.”

 

Reputation Recoverable or Permanently Damaged?

Before American brands that may already be facing significant revenue shortfalls begin reconfiguring their entire European marketing strategy, there are some salient questions that companies must ask.

One is simply whether or not any negative attitude toward American brands are short-term or something more permanent? Another is what, if anything, brands can do to successfully recalibrate their marketing and advertising to continue to engage European consumers, customers, and prospects.

Some context about the seriousness of the long-term threat to American brands is helpful. Kantar Group’s BrandZ research shows that each of the top five spots in its ranking of the globe’s strongest brands is held by American companies, including tech giants Amazon, Apple, and Google. And strong brands really matter in and after a crisis.

For example, Wragg notes that the market capitalization of the top 10 most powerful brands increased 285 percent between April 2006 and April 2020, compared to 46 percent among the MSCI Worldwide Index.

“Of all the things brands have to worry about, I don’t think a negative halo around America’s response to COVID-19 is one of them,” Wragg says. “I’m far more concerned about shifts in supply chains and distribution, business model disruption, changes in consumer and business buying behavior, massive contractions in consumer and business spend across the world, volatile government policy, loss of talent, and the like.”

Nevertheless, Wragg recommends a few steps brands can take to build a strong brand that appeals to European consumers. One way to do this is to emphasize the brand’s sustainability bona fides.

“Microsoft is trying to lead environmental efforts with being 100 percent net carbon neutral across their global operations,” says Amra Beganovich, CEO and founder of the digital agency A&E in New York. “Highlighting significant sustainability and other major changes can significantly alter the consumer perception of U.S. companies in the EU.”

 

Align with European Consumers’ Values

Another trend American brands would do well to embrace, to appeal to European consumers, is around being a good corporate citizen, an area where Wragg says there is a gaping divide between the U.S. and Europe.

“The values are often very different in terms of how people react to companies avoiding tax, abusing market power, or exploiting workers, for example,” Wragg says. “Few mind companies making money in Europe. It’s equally true that few will accept it being done by imposing costs on society at large, cruelty, or through other abusive practices.”

Other ways American brands can improve their standing among European consumers is by embracing inclusivity and — so long as COVID-19 lasts — enabling people to better navigate their day-to-day lives using digital devices.

Understanding what matters to consumers — European and otherwise — will be key to marketing in an increasingly global economy. “The basic job of marketers and business leaders has gotten a lot harder,” Wragg says.

He adds, “No one can predict when a crisis will hit, but marketers can get ahead of the curve by continually aligning the brand purpose and values to ongoing trends, and thinking proactively about how they’ll evolve in the long-term. Marketers need to continue trying new ways of doing things. And by doing so, American brands will be able to bounce back.”

Another potentially useful marketing strategy that brands already strapped for resources may find appealing is to just keep quiet for the time being and monitor consumer sentiment in Europe closely.

Marketers who do have budget to spare may consider devoting some of those dollars to local promotions and/or channels or promoting a product feature that holds particular appeal among European consumers.

“I think you zoom into the product and how well it is made,” Adamson says. “Don’t zoom out to the bigger America, U.S.A. [brand] story. Lowering the volume is the way to weather times like these. When in doubt, say less.”

 


 

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