Costello Research Brand Management

Environmental sustainability pays off—but mostly for media-savvy firms

Katelynn C Hipolito — Tue, 18 Nov 2025 14:42:57 +0000

Environmental sustainability pays off—but mostly for media-savvy firms Katelynn C Hipolito Tue, 11/18/2025 - 09:42

To please both the planet and shareholders at the same time, firms must travel a triangular path.

Whatever else they may be, environmental, social, and governance (ESG) initiatives are very often an image-building exercise. Business leaders hope that by being seen to put ethical responsibilities over profits, they will reap profits anyway as a byproduct of reputational gains. It stands to reason, then, that no conversation about the “business case” for ESG would be complete without involving society’s chief reputational brokers—i.e. the media.

Saurabh Mishra. Photo by �鶹��Ƶ.

New published research from Saurabh Mishra, area chair and professor of marketing at the Costello College of Business at �鶹��Ƶ, confirms the media’s pivotal role in influencing ESG profitability.

Forthcoming in the Journal of Business Research, the paper was co-authored by Shekhar Misra at University of Galway, Ireland.

The researchers analyzed ESG performance from the Sustainalytics database, media sentiment from the RavenPack news analytics database, and financial data (including advertising budgets) for 452 firms over the period 2009-2018.

This data-set allowed them to chart the triangular path by which “doing good” (for society and the planet) resulted in “doing well” for the firms in question.

To start with, only the “E” in ESG had any direct positive impact on financial performance—and a muted one at that. Of the three metrics examined—idiosyncratic risk, abnormal returns and Tobin’s Q—only idiosyncratic risk responded favorably to raw, unmediated environmental performance.

The “S” and “G” had either no direct positive effect, or a negative effect upon financial performance.

“You can imagine the E, S, and G would not have the same effect on all stakeholders,” Mishra observes. “Governance, being a little more internal, might have more positive impact on employees, but not necessarily on the outside world. Social kind of falls in the middle—it could be either internal or external.”

With media sentiment, there was a similar disparity. “Greening” efforts tended to drive more positive media coverage for the firm, which translated into higher financial performance. Social and governance initiatives made no significant difference to the media conversation.

But not all eco-conscious firms benefited equally from this media-made halo effect. Those that spent more money on advertising—not necessarily promoting their ESG activity, but advertising in general—saw a greater improvement in media sentiment.

Crucially, Mishra’s data-set included neither specific examples of media coverage nor information about the recipients of advertising spend. The research, therefore, does not suggest the presence of an ethically problematic quid pro quo.

“It’s possible that media simply follow firms [with high advertising budgets] more closely,” Mishra says. “They recognize their efforts more. Everything they do becomes more visible, which kind of magnifies the effect that we’re seeing.”

For Mishra, the findings help clarify contradictions about ESG and its potential payoffs. “If you look at some of the meta-analyses that have been done, the consensus is that ESG’s effect on shareholder wealth is not there, or it’s weakly positive. At the same time, there is a lot of variation. Some firms see a lot of upside and some don’t.”

It’s not, then, that there isn’t a good “business case” for ESG activity. But that case may be more contingent on external factors (such as media sentiment) than many previous researchers believed.

If so, ESG may be most financially successful as part of a diverse strategic portfolio that could encompass advertising spend and possibly other areas ostensibly unrelated to environmental sustainability.

“Advertising researchers talk about a stock effect,” Mishra explains. “Advertising stock builds over time. You have to continually advertise, otherwise that stock starts going down. So if you’re advertising substantially, you get more bang for the buck from investing in the environment.”

But because so much remains unknown about the various factors that help determine ESG’s profitability potential, Mishra cautions against dismissing the “S” and “G” too quickly, despite their apparent irrelevance in this particular study.

“I would hate to say that firms should not invest in social and governance,” Mishra says. “Maybe if you look at some other stakeholder measures—employee productivity measures, for instance—they move the needle there. Because, after all, there is variation in the data, and no one paper can look at every relevant factor. But if your objective is to move media to be more positive towards you, environmental focus is your best bet.”

“I would hate to say that firms should not invest in social and governance. Maybe if you look at some other stakeholder measures—employee productivity measures, for instance—they move the needle there. Because, after all, there is variation in the data, and no one paper can look at every relevant factor. But if your objective is to move media to be more positive towards you, environmental focus is your best bet.”

— Saurabh Mishra, area chair and professor of marketing at the Costello College of Business at �鶹��Ƶ

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How consumers react when they feel ‘betrayed’ by a brand

Katelynn C Hipolito — Mon, 03 Nov 2025 14:52:41 +0000

How consumers react when they feel ‘betrayed’ by a brand Katelynn C Hipolito Mon, 11/03/2025 - 09:52

A pair of �鶹��Ƶ marketing professors have unpacked the surprisingly intense and complicated emotional consequences of brand inauthenticity.

We all know what it’s like to discover—either gradually or all at once—someone else’s insincerity. Jessica Hoppner and Russell Abratt, marketing professors at the Donald G. Costello College of Business at �鶹��Ƶ, have found that an encounter with an inauthentic brand produces much the same effect.

Jessica Hoppner. Photo by �鶹��Ƶ.

“Authenticity is defined within the context of the brand-consumer relationship,” Hoppner says. In other words, it’s in the eye of the beholder—or in this case, the consumer. Inauthenticity occurs when a brand behaves in a way that appears to go against its perceived core values, or the consumer’s baseline expectations for that particular brand.

“This kind of inauthenticity causes problems for brand managers because for each person it’s a little bit different, and that makes it really hard to navigate,” Hoppner says.

In their recently published paper in the Journal of Product & Brand Management, Hoppner and Abratt trace the emotional cause-and-effect of brand inauthenticity, offering rare insight into this slippery phenomenon.

The paper was co-authored by Ryan White of Winona State University.

The researchers recruited 218 survey participants using Amazon’s Mechanical Turk platform. Respondents were asked to write about an experience of brand inauthenticity and answer a series of questions about that experience and steps they took afterward. The results were analyzed in light of concepts drawn from psychological research, such as appraisal theory and balance theory.

Surprisingly, participants named a wide range of brands (156 in all), only 25.2 percent of which appeared on Interbrand’s Top 100 Best Global Brands List. “It covered large brands, small brands, all different sectors,” says Hoppner. “It’s not constrained to consumer products or the brands that we would normally think about.”

The survey responses showed that customers experienced brand inauthenticity as a betrayal of sorts, with emotional implications comparable to those of human-to-human betrayal.

Brand inauthenticity triggered a complex mix of emotional responses in consumers. Anger, anxiety, and disappointment were the principal motifs across the sample, but individual reactions could include one, two, or even all three. The strength of reactive emotions varied according to the perceived severity of the betrayal.

Further, the researchers found that the three main emotional responses led to different behaviors in consumers.

Abratt and Hoppner describe anger as a “hot emotion,” causing consumers to lash out at brands deemed inauthentic, through retaliation, complaints, and withdrawal of loyalty.

Anxiety inspired a less accusatory and more questioning response, as consumers groped for the deeper truth about this apparently two-faced brand. “Anxiety is very ambiguous,” Hoppner says. “When we’re anxious, it’s often because we don’t really know what happened, why it happened, who’s to blame, etc.” Consumers made anxious by brand inauthenticity actually increased their loyalty to the brand, and sought out more information to resolve the ambiguity.

Finally, disappointment led consumers to lapse into a self-protective passivity. Their central concern became not closure or redress, but rather avoiding further disappointment by turning their back on the offending brand.

Russell Abratt. Photo by �鶹��Ƶ.

Abratt and Hoppner advise brand managers to think twice before launching a rote response in hopes of winning back consumers alienated by perceived inauthenticity. Anger and anxiety show up very differently, and disappointment may not show up at all in any conventionally measurable way. When addressing inauthenticity after the fact, a brand’s best bet may be to ask questions and listen closely before attempting to fix the problem.

Of course, the ideal approach would be to avoid being seen as inauthentic in the first place. That would mean understanding the actual relationships consumers have with the brand, which may differ from how managers view the brand’s value proposition. It may also entail intentional, proactive reshaping of those relationships.

“I think the real issue for firms is to understand who they are,” Abratt says. “In other words, brands have to talk about their identity. And once they have figured that one out, they have to have training amongst their employees and say, ‘this is what we stand for. This is what we do.’ Communicate that to your markets and your community, and make sure that you allow the community and customers to talk back with you.”

“I think the real issue for firms is to understand who they are,” Abratt says. “In other words, brands have to talk about their identity. And once they have figured that one out, they have to have training amongst their employees and say, ‘this is what we stand for. This is what we do.’ Communicate that to your markets and your community, and make sure that you allow the community and customers to talk back with you.”

— Russell Abratt, marketing professor at the Donald G. Costello College of Business at �鶹��Ƶ

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“Doing well by doing good?" There’s a framework for that

Jennifer Anzaldi — Wed, 02 Jul 2025 15:38:03 +0000

“Doing well by doing good?" There’s a framework for that Jennifer Anzaldi Wed, 07/02/2025 - 11:38

Today’s customers don’t just buy products—they buy into what a company stands for. It is no longer just low prices or flashy marketing that target the latest trends. Stakeholders are asking harder questions: Does this company treat its workers fairly? Are they harming the environment?

In a recent study published in the Journal of Brand Management, Russell Abratt, a marketing professor at the Costello College of Business at �鶹��Ƶ, tackles a key strategic challenge: How companies can move beyond shallow social and environmental messaging to meaningfully shift consumer perceptions. Joining Abratt on this research team are co-authors Emmanuel Silva Quaye of University of Witwatersrand and Nicola Kleyn of University of Pretoria.

Russell Abratt

When a brand is described as being true to themselves, holding values of fairness, a concern for society, and an obligation to goodness, it becomes what they call a conscientious corporate brand. These are brands who are trusted to do the right thing consistently and authentically.

But trust alone is not enough. Companies want to know: Does being conscientious also deliver better business outcomes?

Building on their 2023 work, which introduced a framework for developing conscientious corporate brands, the research team now offers empirical evidence that this framework not only enhances brand trust but also leads to the response companies are hoping for—responsible branding can drive tangible value.

“Firms in order to succeed these days really need to go beyond profits,” says Abratt. “You’ve got to be ethical in whatever you do. You’ve got to be socially aware. And you’ve also got to be very, very conscientious about what you are doing.”

To further investigate Abratt’s 2023 framework and understand what changes stakeholder perceptions, the researchers conducted two experiments with South African participants. Each participant was shown a scenario involving a fictional construction company: the control group highlighted traditional business goals such as efficiency and profitability, and the experimental group emphasized ethical leadership, social impact, and environmental sustainability. The results were striking.

“We saw very clearly the differences between the control group and the experimental group,” Abratt explains. Participants viewed the purpose-driven, socially engaged version of the company as significantly more conscientious, responsible, and authentic than the version focused purely on business efficiency.

Their research identified four elements in a chronological sequence that contribute to conscientious corporate branding: organizational purpose, brand authenticity, corporate social responsibility (CSR), and ethical organizational culture. These are not separate strategies; they reinforce each other.

“Firms in order to succeed these days really need to go beyond profits,” says Abratt. “You’ve got to be ethical in whatever you do. You’ve got to be socially aware. And you’ve also got to be very, very conscientious about what you are doing.”
— Russell Abratt, Instructional Professor, Marketing

The first element of this sequence is organizational purpose. A company must begin by defining why it exists beyond just profits. Next is authenticity. “Authenticity leads to trust,” says Abratt. “The more authentic that an organization is perceived to be, the more positive perceptions the stakeholders have.” The paper finds that authenticity acts as a bridge that connects an organization’s purpose to stakeholders’ perceptions of conscientious corporate branding.

Next is the third element: corporate social responsibility. This must be integrated, not performative. “Developing a corporate social responsibility strategy should be part of the organization’s overall strategy,” says Abratt. “It should not be seen as greenwashing, as added on and fake.”

Lastly, an ethical organizational culture is created by top leadership through example and prioritizing ethical values across the organization.

According to Abratt, “In order for a firm to say this is our purpose beyond profits, they’ve got to have a top leadership that says these are our values. This is what we stand for. Then that needs to be typicalized throughout the organization.”

So what does this mean for business leaders? It means that building a conscientious brand is no longer just a marketing strategy—it’s a business imperative. But the real challenge lies in making sure those sustainable actions resonate with consumers to ultimately result in success. Can companies do well by doing good?

Looking ahead, Abratt and his colleagues hope to expand their research to other industries and other countries or regions to test whether their results are generalizable to other contexts.

“Brands that have a purpose beyond profit are the ones that are going to be seen by stakeholders in a more positive light. And if they are seen in a more positive light, those stakeholders, especially customers, are likely to support that particular organization,” Abratt concludes.

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Would you rather buy from a cuddly chatbot, or the “Lipstick King”?

Jennifer Anzaldi — Tue, 04 Mar 2025 18:03:48 +0000

Would you rather buy from a cuddly chatbot, or the “Lipstick King”? Jennifer Anzaldi Tue, 03/04/2025 - 13:03

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Historically, entertainment and advertising have worked as a tag team, taking turns soliciting attention from audiences. But our social-media age is blending the two into new, hybrid forms.

Witness livestream shopping, a seamless amalgam of e-commerce and entertainment. In place of one-way messaging delivered by polished pitchpeople, this model employs relatable influencers presenting products for online sale—and chatting with consumers—in real-time sessions that often last several hours.

Famously popular in China, livestream shopping is picking up steam in the United States. In June 2024, as an example, U.S. TikTok netted its first million-dollar livestream, courtesy of Texas-based brand Canvas Beauty. By 2026, live shopping may be responsible for as much as five percent of all e-commerce sales in the U.S., according to industry projections.

For global brands, this means a possible revenue explosion. But for information-systems scholars like Si Xie, assistant professor at Costello College of Business, the global rise of livestream shopping represents an unprecedented research opportunity.

Si Xie

“One of the most important elements of livestream shopping is the interaction,” Xie says. “Livestreams bring all potential buyers into the same virtual room, together with the influencer. People can see which products have been put in the online shopping cart, and which have been purchased.”

Her recently published paper in Production & Operations Management finds that the longer an individual product is showcased in a livestream featuring several different brands, the more revenue it will generate. Yet as product showcase duration goes up, overall revenue from the livestream goes down.

To reach their conclusions, the research team—including co-authors Siddhartha Sharma of Indiana University and Amit Mehra of University of Texas at Dallas—analyzed data from nearly 75,000 livestreams conducted in China during 2021.

For Xie, the findings point to a fundamental conflict between the incentives of livestreamers and the brands they promote. It is in the best interest of third-party influencers to move fairly rapidly between different types of products, but brands will want more airtime devoted to each one.

“People like variety,” Xie explains. “If I watch a livestream and all I see are shirts in different fabrics, I might feel there are not too many choices I can make. However, if you show me a shirt and then a pair of pants, I can make an outfit. There’s a higher probability of my making more purchases, and that’s in line with the third-party livestreamers’ incentives.”

One way to correct these misaligned incentives would be for brands to use the power of the purse to influence the influencers. In China, even the suggestion of such corrupting relationships has caused public scandal. In 2023, for example, top livestreamer Li Jiaqi (nicknamed “The Lipstick King” for his ability to sell beauty products) lost one million followers on social media after lashing out at an online commenter who complained about the high price of an eyebrow pencil made by Chinese cosmetics company Florasis. Li, Florasis’s most prominent brand ambassador, was excoriated for ostensibly putting his relationship with the brand above empathy for financially struggling consumers.

“People were saying, ‘you are trying to be defensive of the product because you get so much interest from selling that pencil’”, Xie says. “Therefore, Li’s credibility was really impaired.”

If Xie’s paper describes how human imperfections can jeopardize livestream shopping, could AI be the answer? Indeed, AI-powered animated chatbots — both paired with human influencers, and serving customers solo during off-peak sales hours — have become commonplace on China’s livestreams. For her PhD dissertation, Xie probed data from more than 70,000 livestreams in China and found that introducing an AI assistant boosted livestream sales by about 18%. But the effect steadily declined over time — and not because the novelty wore off. The rapidly improving algorithmic responses had the unintended consequence of shorter watch durations, which may have reduced impulse buying. Xie’s suggested remedy? “The owner of the gen-AI tools could modify the interaction between the virtual livestreamer and the audience to encourage more engagement, perhaps by adjusting the learning speed to ensure that the audience remains engaged for a longer period."

Xie also suggests that brands and channels replace humanoid avatars with cute, cuddly “mascots” that users just can’t bring themselves to click away from.

Xie says she’s working on future papers that tease insights out of livestream data. “One good thing about this new technology is that it promotes the user to buy using methods we can observe. Livestreamers sell general items like grocery items and clothing, as well as expensive stuff like cars and houses, and you can really see how people behave.”