In the summer of 2020, the Black Lives Matter (BLM) movement took hold of public consciousness and spurred demonstrations of support by individuals and corporations, both in the public sphere and online. One of the most popular online events was the Blackout Tuesday event organized by supporters of the BLM movement on Tuesday, June 2, 2020. On that day, people and companies expressed their support for the movement by posting a plain black square to their Instagram accounts.  

A new study by researchers at Fox School of Business, titled “When Corporate Silence Is Costly: Negative Consumer Responses To Corporate Silence On Social Issues,” uses data from the Blackout Tuesday event to find that customers will punish companies for staying silent on social issues on social media.  
 
The study, by Xueming Luo, Charles Gilliland Distinguished Chair Professor of Marketing in the Fox School of Business; Marco Qin, assistant professor of marketing; and Todd Schifeling, assistant professor of management, was recently published in the Strategic Management Journal. 
 
For the study, the researchers analyzed approximately 300 fashion and accessory brands ranging in popularity and prestige, including household names such as Adidas, Dior, Gap, J. Crew, Nike and Old Navy. Companies that did not post the black square saw their Instagram follower growth slow by 33% and received 12% fewer likes on their posts. 
 
“This paper helps explain why companies would engage on these issues, and it’s because there’s a cost to staying silent on them. When these issues become really salient and you have a large presence in the market, people are going to expect you to engage on these issues,” Schifeling said.  
 
The findings contradict the long-held assumption that it is in companies’ best interest to avoid politics and to stay silent on social issues. “The conventional wisdom is that brands should stay neutral on politics, that if you remain silent you’ll be protected and nobody will bother you,” Qin said. “We were wondering whether that notion is still true in today’s world.”  
 
The study suggests that this shift in corporate behavior reflects changing customer expectations. “In a societal context of increasing polarization and expectations of corporate activism, silence also risks being viewed as picking a side on an issue. In this scenario, silent companies will again be exposed to negative evaluations from misaligned stakeholders, disappointed expectations and apparent hypocrisy if companies are benefiting from the support of stakeholders that favored corporate activism,” Luo said.  
 
Since it is difficult to study the effect of inaction rather than action, the Blackout Tuesday event created unique conditions for studying the effects of silence. The Blackout Tuesday event did not occur on X, which allowed researchers to perform a “within-company cross-platform difference-in-differences test” of how staying silent on a social issue can affect customers’ responses on social media, which is considered a proxy for support for the brand itself.  
 
“Comparing Instagram and X before and after the Blackout Tuesday event helps us to tease out some different consequences in participating in a trend centered around making a statement in support of a social issue,” Qin said.  
 
The study is the latest in a series of research on how customers respond to companies’ support for the BLM movement. In 2022, Qin and Luo published a paper titled “How Support for Black Lives Matter Impacts Consumer Responses on Social Media” in Marketing Science. The paper takes a more broad look at the consequences of companies’ support for BLM, including data from the Blackout Tuesday event. 
 
This research is key to understanding how companies compete for customer buy-in in a rapidly changing world that is creating shifts in expectations for corporations’ behavior.  

“This whole area of research is growing quickly because there has been a lot more engagement by companies in activism, and that’s considered a big change from the historical pattern of companies trying to stay out of contentious issues,” said Schifeling.