Nivea homophobic allegations: what's the potential fallout?

FCB tried to quietly end its relationship with Nivea last week.

It followed allegations of a homophobic comment made on a call with the Beiersdorf brand, though this wasn’t alluded to in the "STRICTLY CONFIDENTIAL" memo sent out internally by agency CEO Carter Murray. 

While Nivea did not directly address the allegations, it stressed such behavior will not be tolerated (full response below). FCB declined to comment.

Interestingly, the brand began its statement by revealing that an agency model review and pitch preparation were launched at the start of 2019, indicating possible turbulence between the two -- a relationship spanning around 100 years, apparently.

For frustrating legal reasons, we may never know the true story. But the speculation and allegations are out there for the world to see. What kind of an impact will that have on the brand and its pitch process going forward?

We asked some industry experts for their opinion.

Simon Francis, CEO at Flock Associates
Allegations are just that, allegations, and no-one should knee jerk based on un-specified and un-evidenced rumor. Beiersdorf have given clear guidance as to their values, and beliefs, with reference to the homophobic allegation. They were unambiguous.

Clearly, if FCB were to make a formal challenge (rather than a leaked story as they resign the business) and the allegations were true then Beiersdorf will act on them and deal with the individual who is supposed to have said the horrid comments.

So, do I think it will impact the pitch? No, not unless the allegations were true and went undealt with, which I simply cannot imagine a likely out turn.

It is a wonderful opportunity for Beiersdorf to engage with agencies with truly inclusive and diverse contracts, processes, ways of working, training and rewards that celebrate their consumers wishes. And, for agencies to present themselves as leaders of best practice in communications and to act with the highest levels of integrity.

Mandy Eckford, North America managing director at Fortnight Collective
News of allegations like this certainly gives agencies pause about wanting to engage in a relationship. Every agency has business that they'd take and not. You're only as good as your reputation.

While we would not participate in the pitch, in this climate, agencies might be afraid to turn down an opportunity. The typical agency structure allows for things like this to easily get swept under the rug, and sadly, it likely happens more often than we think.

Bryan Specht, chief growth and innovation officer at ICF Next
We went through something similar when we walked away from Papa John’s, so we do take these situations seriously.  We’re not going align our business with clients whose values conflict with our own. And we can’t put our people in a potentially hostile environment.

The question we’d need to answer before moving forward is whether this episode reflects a broader company culture, or whether it is an isolated moment of poor judgment by a single employee that was handled with appropriate seriousness by the company. 

If it reflects a larger cultural or corporate perspective, we’d stay away. If we determined it was a bad actor who made an isolated mistake and was held accountable, we’d likely pursue it.

Simon Fenwick, EVP talent engagement and inclusion at 4A’s
We live in a world where bad behavior, racism, sexism and homophobia of any kind is not being tolerated, so no matter what business you are in, it is important that you stand up for your employees by only working with companies that believe in providing a safe and equitable work environment for all.

I think this is an example of an agency saying it is not ok to be derogatory about anyone and putting equality and fairness first.

At the 4A's, we are working with agencies to provide a better work environment, one which helps to drive inclusion and enlightenment. Our Workplace Enlightenment Certification (WEC) program helps agencies develop process, policy and practices around six points of difference, ensuring that the companies employees are aware of all the difference around them and ensuring that bad behavior is called out and addressed.

Quynh Mai, founder of Moving Image & Content
In recent years, an agency role has increasingly been moved to one of execution. Though brands always say they want "big ideas" and breakthrough creative, increasingly agencies are simply put into the position of executing what best suits the in-house team. Sadly, this has been a result of agency retainers disappearing and moving towards project based work.

In this new transactional relationship, agencies are less bold when being critical for fear of getting that next project. We all suffer in this: agencies play it safe, brands become myopic, ad campaigns become banal and consumers don’t pay attention, and then sales slip. It’s a vicious cycle.

Brands can no longer think locally, as Nivea has with their Africa skin whitening campaign. Social media allows every regional campaign to go international, so brands like Nivea need to find an agency who can think globally, but with the cultural nuances of a local.

The challenge for brand like Nivea today is finding an agency (or agencies) that is truly 360. Most agencies that promise this, fall short in many verticals. Media is splintered, local markets are nuanced and digital is a culture into itself, so finding one agency to solve all these issues is no longer possible.

I predict that the new model is finding true experts in each category who can work seamlessly together against a core idea, but that executions can be diverse. Consumers do not want to see the same messaging again and again, and crave diversity.

Full Nivea statement

"The profound transformation of the consumer goods industry and agency landscape during recent years led to a review of the current agency model for the NIVEA brand.

As a result, Beiersdorf has decided to initiate a pitch process for our biggest global brand, NIVEA, at the beginning of the year. Following the launch of our new corporate strategy C.A.R.E.+, this is now the right time also for a new beginning in NIVEA’s brand management and creative work.

We understand that emotions and news interest are intensified when a longtime business relationship comes to an end – however, we ask for understanding that we don’t comment on unsubstantiated speculations around this matter.

Nonetheless we wish to express our concern on the reported allegations as they do not reflect the values of Beiersdorf, Nivea and our employees worldwide. No form of discrimination, direct and indirect, is or will be tolerated. We are strongly committed to diversity, mutual respect, equal opportunity and tolerance -- this stance and belief is shared and lived throughout Beiersdorf. 

We are an international company with more than 20,000 employees with very different genders, ethnicities, orientations, backgrounds and personalities worldwide. Through our products, we touch millions of consumers around the globe every day. We know and cherish  that individuality and diversity in all regards brings inspiration and creativity to our society and to us as a company."