A few months ago, Scientology “targeted” a few national advertisers whose ads appeared on Leah Remini’s hit A&E show “Scientology and the Aftermath,” implying a boycott might be lurking. Earlier in 2017, Scientology announced a boycott of Clearwater businesses to show their economic impact on the city after losing the land deal they wanted.
What kind of pressure could Scientology bring to bear on an advertiser, to bend them to its will? How rapidly can their ire affect a big company and show Corporate America who’s boss? We analyze the effectiveness of consumer boycotts in general and Scientology’s whine-fest in particular.
Scientology’s Failed Attempts to Boycott Clearwater Businesses
I’ve pointed out in various comments at the Underground Bunker that boycotts of small locally owned businesses can sometimes work, because there aren’t many companies with high fixed costs (real estate, etc.) that can afford a sustained 20% drop in sales. But even those only work if the group calling for the boycott represents a portion of sales greater than 20%, and the members of the group have enough discipline to hold to the boycott for long enough for accumulated losses at the target business to become fatal.
We saw Scientology’s attempt at a local boycott in downtown Clearwater fail miserably. In February, 2017, Tony Ortega published an article about how local pub owner Clay Irwin was given a tour of the penthouse condo being built for Tom Cruise. Irwin posted this to Facebook, and subsequently took it down when the cult demanded it, even though they didn’t really have any legal authority to do so. The cult’s boycott of his business, plus the one they called for after losing out on the Aquarium land deal around the same time, should have had some impact, because it’s a local restaurant literally in the shadow of Scientology facilities. But there have been zero follow-up stories in local media to suggest that there was any.
In fact, Clay Irwin was reportedly adding a second store across the street from the existing Lucky Anchor in downtown Clearwater. We in Global Capitalism HQ would try to dissuade any of the companies we invest in from what we term “concentrated geographical risk.” In other words, we’d tell Clay to invest in nearby (but not too nearby) locations with similar demographics. Ybor City, the revitalized historic district in downtown Tampa, 20 miles away from Clearwater, comes to mind.
In a recent post, I estimated the number of Scientologists in Clearwater, and came up with about 870 public. There are perhaps 2,000 staff and Sea Org, but their pittance-level payments of $0 to $50 per week don’t give them much purchasing firepower. The population of Clearwater is around 110,000, and Pinellas County gets 6.4 million annual tourist visits, about 17,500 new tourists arriving per day. Assuming a one-week stay, there are about 130,000 tourists in Pinellas County at any given moment, many of whom end up cruising the streets of Clearwater despite the dystopian shadow of Cult HQ throwing a damper on the festivities.
In an article in May, 2017, the Tampa Bay Times said that the absence of Sea Org members from the streets had harmed downtown Clearwater businesses, with some local owners claiming they had seen lower traffic. However, monthly statistics from the Pinellas County Convention and Visitor’s Bureau show that tourism was up significantly over 2016, leading to an opportunity to capture more dollars from more well-heeled customers than the impoverished staff members in uniform ordering the occasional latte. Food and restaurant expenditures in Pinellas County were up 3.2% in May 2017 versus the prior year. So it’s pretty clear that even if Scientology pulled their staff away from local businesses, it had no material effect over the longer term.
Scientology’s Laughable Attempts to Pressure National Advertisers
Several articles have detailed Scientology’s attempts to get A&E to cancel Leah Remini’s “Scientology the Aftermath” show. Scientology tried many avenues to exert pressure, all unsuccessful. For example, in August, 2017, Scientology sponsored a petition at Change.org to pressure A&E to cancel Leah’s show, which averaged well over two million viewers. After a month of Scientologists rousing each other to sign the thing, it accumulated approximately 6,000 signatures from around the world. Eventually, the cult tried to threaten advertisers to drop their support of the show.
Scientology can’t possibly punish all the national advertisers who sponsor programs that criticize them. There are too many critical programs today. Late-night talk show hosts and weeknight entertainment news shows have hundreds of advertisers and they’re always taking shots at Scientology. Scientology would literally be telling its members to boycott substantially every large consumer product maker in the US if it followed through on its threats.
Given that approximately 10 large consumer product companies control most of the US packaged/prepared food market (Kellogg, Kraft, PepsiCo, Mondelez, Unilever, Nestle, etc.), it would be extremely difficult for the average consumer to avoid doing business with any of them. Nobody is willing to bear the burden of so much inconvenience. It’s way harder to comply with a complete, principled boycott than it is to be vegan.
We don’t need to go into the math of how Scientology’s approximately 9,000 members in the US have so little purchasing power relative to the broad population that even 100% compliance with any boycotts couldn’t affect any players. Recall, they couldn’t even ding sales in tiny Clearwater in their pique after the April 2017 aquarium land bid was rebuffed, and that’s where approximately 25% of Scientologists (members plus staff/Sea Org) in the country are located.
Especially laughable is the threat to boycott Fiat. They received a nasty letter from a member of the “STAND” front group (note: hosted on a cult website) threatening to “[tell] many to boycott advertisers who support this hatred. Hopefully you will realize that positioning your products with lies and hatred will quickly destroy your brand equity and will cause you to become known as a company dealing in lies and hate.”
Most amusing (other than the marginally literate prose and generally weak tone of the threats) is the fact that the letter doesn’t say how many like-minded people the writer can influence and what her role is in that group. If you’re trying to get a company to do what you want, your firepower comes from how many people you can muster. If you can’t say that you’ve got X number of equally committed activists ready to do what you ask at the drop of a hat, you’ve got no mojo. And anyone reading the letter in the PR department of a company will see that immediately.
Let’s assume that the threat applied to just the Fiat brand of Fiat Chrysler Automobiles US (“FCA US”), since Fiat is the brand that advertised on Leah’s show. In 2017, Fiat sold about 27,000 cars in the US. Typically, the average new car buyer owns a new car for about 6.5 years. If we have 9,000 Scientology public in the US, then that means about 1,400 Scientologists buy a new car every year. We’ll assume, for the sake of conservative modeling, that every Scientology public makes enough money to buy a new car, though we won’t assume that Staff have that same economic firepower. Given Fiat’s market share, 27,000 out of 17.24 million units sold overall, or 0.16% of the market, that would imply that Scientologist car buyers in 2017 would buy an expected 2.16 Fiats in 2017. The impact on Fiat’s US car sales, which had been declining sharply for several years in the face of horrible reviews from the automotive press, is beyond negligible–it’s laughable.
But since the author didn’t specify whether they were targeting Fiat or all of FCA US’s brands, just to be sure, let’s see what the math looks like for all of FCA US. In 2017, all FCA brands (Dodge, RAM, Chrysler, Jeep, Fiat) sold 2,046,843 units. Applying the same analysis, prospective Scientology car buyers would have bought an expected 163 FCA-made cars in 2017, if they had the mental stamina to hold a boycott for the entire year. FCA’s brands saw a major drop in sales, by 9.1% in 2017 while the total US market dropped only 1.7%. If Scientologists took credit for the drop in sales, they’re delusional, as FCA has major structural problems, and Scientology’s impact doesn’t even measure as random noise.
How National Advertisers Analyze Risks of Threatened Boycotts
So how do companies analyze potential for boycotts to be effective and convince themselves they needn’t worry? They have a duty to make a decision to ignore boycotters carefully, to ensure that there is no consequence. They can’t just guess. Major big-box retailers, particularly, operate on such thin margins that a 3% drop in sales would be problematic.
We in Global Capitalism HQ have access to all sorts of data, and we know tons of world-class numbers hounds who have access to tons of data of their own. We know a lot about the decision making process in large companies, including consumer all the big consumer products makers like Procter & Gamble, Frito-Lay, the big retailers like Target and Wal-Mart, etc. The amount of analytical firepower (both human and computer) deployed to optimize the mix of brands, sizes and scents in the laundry detergent aisle of your neighborhood Target store would blow your mind.
We can say with a high degree of confidence that virtually every large consumer-oriented business in the US has done an analysis of the potential lost business for adopting gay-friendly policies, and they redo the work periodically. They have very good data that shows them exactly how many people are religious enough to want to engage in a boycott, and how many people will actually follow through on the calls from group leadership.
It’s clear to large consumer-facing businesses that the amount of business lost by doing something likely to be boycotted is minimal compared to the business they’ll win from supporting the other side. All those boycotts of Target for trans-friendly restrooms, or of airlines for offering domestic partner benefits, or all the rest, have fallen flat. Gay people have tons of straight friends and relatives, and those numbers outweigh the number of anti-gay religious zealots.
Companies already know what they’re doing. They already know that boycotts will never work. The only people that think they will are those small fringe groups that threaten them.
The Real Goal of Boycotts
So if boycotts don’t work, why try to organize them? We’ve seen that small organizations like Scientology can’t crush local businesses, and even large organizations like Franklin Graham’s, detailed in the case study below, can’t materially affect the financial results of large national companies.
The only boycott scheme that could conceivably succeed is a well-organized overwhelming percentage of the population in a small town targeting a single business, and that doesn’t happen too often. Sometimes, a situation that might seem ripe for such a boycott often ends up going the opposite direction: a small, conservative town in a heavily red part of Kentucky not only failed to find a reason to boycott a staunchly Democratic gay hairdresser, but ended up electing him mayor and passing an LGBT anti-discrimination ordinance.
It seems pretty clear why groups organize boycotts: keeping members continually outraged is good for retention, and also good for fundraising. Given that the likelihood of mounting an effective boycott is so small, it’s all about the outrage. And the fact that national advertisers increasingly won’t even waste time responding to threatening letters from consumers, or even meeting the heads of large organizations threatening boycotts, it seems reasonable that leaders of these organizations use the boycott and the lack of response to enhance their “victim” narrative. That’s an important cult retention hook — that, despite the super powers that cult membership confers, they’re simultaneously super-powerful and also the hapless victim of dark, shadowy superior forces.
National Boycott Case Study: Franklin Graham vs. Wells Fargo
In 2014, evangelist Franklin Graham, son of legendary evangelist Billy Graham, announced that he was pulling the Billy Graham Evangelical Association (BGEA) accounts from Wells Fargo, and taking his own $100 million to BB&T, while encouraging his followers to do the same. This was sparked by WF’s positive portrayal of gays in a well-crafted heartstring-tugging commercial of two gay women learning sign language to care for their deaf adopted child.
Graham has a lot more followers than Scientology does (6.4 million “likes” for Graham on Facebook versus 9,000 Scientology public in the US, about 700x larger), and yet his boycott was as fruitless as Scientology’s efforts to intimidate national advertisers on Leah’s show.
Graham’s acrid screed is here, so you can get a sense of the comments, but here’s what got Graham all riled up:
Have you ever asked yourself–how can we fight the tide of moral decay that is being crammed down our throats by big business, the media, and the gay & lesbian community? Every day it is something else! Tiffany’s started advertising wedding rings for gay couples. Wells Fargo bank is using a same-sex couple in their advertising. And there are more. But it has dawned on me that we don’t have to do business with them. At the Billy Graham Evangelistic Association, we are moving our accounts from Wells Fargo to another bank. And guess what—we don’t have to shop at Tiffany & Co., there are plenty of other jewelry stores. This is one way we as Christians can speak out—we have the power of choice. Let’s just stop doing business with those who promote sin and stand against Almighty God’s laws and His standards. Maybe if enough of us do this, it will get their attention. Share this if you agree.
We should note that it feels like there’s all sorts of bizarre subconscious Freudian projection when fundamentalists talk about gay rights being “crammed down our throats,” a term they often use when on the rampage against treating everyone with what I understood to be Christian compassion and brotherly love.
Jokes about closeted projection aside, it’s pretty clear that the incendiary language is designed to rile up his followers and feed the victimization narrative consistent with most of these boycott threats.
The Impact of Graham’s Boycott
There’s no evidence that Wells Fargo suffered any material loss of deposits or any impact on earnings. At the end of 2014, shortly after this nonsense, Wells Fargo had $1,593 billion in assets including $1,054 billion of “core deposits” (cash of the sort that Graham pulled out). His $100 million isn’t even a rounding error in that number, but it’s conceivable that some fraction of his 6.4 million Facebook followers pulled some assets. Let’s assume 10% of followers each pulled $10,000 out of Wells Fargo. That’d be a total of $6.4 billion, a much larger chunk of money, teetering on the brink of materiality. But it didn’t happen. Wells’ average core deposits throughout the year were $1,004 billion. That they finished the year at $50 billion over their average number suggests deposits rose strongly throughout the year. In other words, there was absolutely zero impact from a horde of angry depositors pulling cash out.
… A Comical Side-Effect: BB&T is As Gay-Friendly as Wells Fargo
Franklin moved his account from Wells Fargo to BB&T, a Southern bank. Wells Fargo is headquartered in San Francisco, one of the gayest cities in the US, and maybe in the world. BB&T is headquartered in Winston-Salem, North Carolina — right in the heart of what many conservatives think of as “the real America.” Maybe Graham figured that since there are more fundamentalists in the South, BB&T would be appropriately hostile to gays. Apparently, he didn’t do his homework (even Franklin Graham’s father thought he was a little dim, so we shouldn’t be surprised at Franklin’s bumbling on this one).
BB&T is a sponsor for Miami Beach Gay Pride, an annual festival celebrating the LGBT community. Both BB&T and Wells Fargo rank high on the Human Rights Campaign’s Corporate Equality Index. And BB&T actually allowed two gays to use one of its facilities to conduct a marriage ceremony.
The obvious point is that it’s pretty hard to find someone these days to give your business to, because so many of the alternatives are also supporting whatever cause your target supports that’s giving you such offense. Graham just happened to pick a laughably bad alternative to Wells Fargo. But even in Scientology’s case, boycotting FCA is pointless because at some point, you’ll have to boycott GM, Honda, Toyota and BMW as well for doing the same thing. And members will eventually need cars.