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The decline of Brand America.

There are few things more American than Nestl Toll House chocolate chips. In their distinctive yellow bag, complete with a logo invoking a New England inn, they have long been part of the domestic clich. They recall moms baking cookies and children playing in suburban backyards. It's an image Nestl carefully tends—the first thing a visitor to the Toll House website sees is the tagline, "A brand that America trusts has provided the best-tasting chocolate chips for over 50 years. Consistently delivering high quality, Nestle Toll House has ensured warm and enjoyable moments for families across America." Which is why so many people are surprised to learn that Nestl is not a U.S. company at all—rather, it's an enormous Swiss food conglomerate with operations across the globe.

Nestle's ability to pass as American—without ever hiding its true identity behind a domestic subsidiary—has fast become a model for many U.S. companies and marketing executives. That's because, these days, being an American brand on the global market can be a liability. A disdain for U.S. products kindled by the anti-globalization sentiment of the late '90s has been stoked by the Bush administration's aggressive unilateralism and bald ties to corporate interests (which get even more play overseas than domestically). So it's no surprise that global consumers respond to what they see as U.S. imperialism by shunning brands that trumpet their American provenance. According to a December poll by Global Market Insite (GMI), 50 percent of respondents in Asia and Europe said they mistrust U.S. companies, and 20 percent said they consciously avoid U.S. goods. The poll caps a wealth of anecdotal evidence, including calls by politicians for boycotts and stories of European restaurants turning down U.S. credit cards.

So far, the response by U.S. businesses to anti-Americanism has been aimed primarily at changing the world's perception of "Brand America," marketing- speak for the country's international reputation. But, for many marketers, such campaigns are misdirected, insufficient, and shortsighted. Anti-Americanism isn't going away, they say, because it has become a part of the global consumer culture. "People are asking whether a brand conforms to their ideologies," says Naseem Javed, CEO of the marketing firm ABC Namebank. "This has never happened on such a grand scale. But, post-9/11, it has exploded." It's an enormous challenge for U.S. companies, which have long traded on their association with the land of free enterprise, abundant wealth, and unlimited consumption. Now, say marketers, if companies want to compete globally, they need to do the opposite: Get local. Brand America is dead. And that may not be such a bad thing.

ANTIPATHY TOWARD U.S. products has long been a staple of anti-American sentiment—witness 1960s French cultural critics bemoaning the "coca-colonization" of Europe. But such expressions were largely limited to Left Bank caf chatter; in much of the world, U.S. products were not only cheap, fashionable, and of high quality, but they also carried with them an image of freedom and aspiration. Cowboys, movie stars, rock music—these were the icons of the United States, the modern incarnation of the American dream. Note Great Britain-based marketing experts Simon Anholt and Jeremy Hildreth in their book Brand America, "These brands were the wearable, affordable slice of America that young consumers worldwide could take away." Everyone wanted a piece of it, and, for decades after World War II, Madison Avenue advised its clients to sell America when selling abroad. Even foreign brands tried to buy into Americana—Brooklyn chewing gum, made in Milan, has been on Italian candy shelves for half a century.

But international affection for Brand America began to erode in the 1980s. On the one hand, globalization, far from erasing ethnic and national identities, has actually made them more apparent—and more important. Financial Times columnist Richard Tomkins wrote recently that "globalization led not to monoculturalism and a convergence of tastes but to the emergence of a global culture.... [N]ow people can buy products from all over the world, expressing their preferences and indeed their identities by choosing from a vast array of local, regional and global brands." To many people, a world dominated by multinational corporations, many of them from the United States, is a world in which cultural diversity is under constant threat. Not surprisingly, many global consumers have concluded that one easy way to protest U.S. commercial dominance—and at the same time assert their own identity—is to eschew U.S. brands (even though, ironically, many of those products are now made in developing countries). On the other hand, the fall of communism, by ameliorating the tension between West and East, also undercut the symbolic power of American brands. "The gratitude has faded," write Anholt and Hildreth. "[T]he thrill and glamour of the original pop culture have worn off ... and good will has wasted away as America continues to interfere in other countries' affairs."

It was really only a matter of time, then, before American brands became lightning rods for protest. As one Scottish man, who forbids his son to drink Coke, told The Financial Times late last year, "I used to have a lot of respect for America; now there is mostly fear.... You feel pretty powerless, but the one thing you can do is stop buying American products." Indeed, the wealth of polling data and anecdotal evidence showing a growing relationship between anti-Americanism and declining sales of U.S. products abroad is compelling. In 2003, several members of the European Parliament called for a global boycott of U.S. products, and, just last year, a group of German restaurants announced they were no longer accepting American Express. Surveys by market-research firms GMI, NOP World, and Research International have shown a pattern of distrust and anger with U.S. business; a 2004 Research International poll found that more than half of its Latin American respondents associate U.S. products with labor and environmental exploitation. An October 2004 poll by GMI found "a consistent direct correlation between how closely international consumers associate companies with the U.S. and the likelihood they'll avoid purchasing their brands in the near future." And, while such sentiment has been growing for years, some say it has gained new energy since the November elections. "For the last four years, people had a suspended disbelief about what was going on in America," says Jasmine Montgomery, executive strategy director for FutureBrand, a marketing firm. That's no longer true. As Montgomery says, "There has been a sea change about America abroad, and American companies have to deal with that."

The first and most obvious response to anti-Americanism has been to rebrand America. This has been a priority for more than just the business community—post-September 11 diplomacy recognizes the importance of international public opinion, particularly in the Middle East. But the business community has eagerly supported such efforts. Improve the flagship brand (the United States), the logic goes, and its subsidiary brands (U.S. icons like McDonald's, Coke, and Levi's) will be improved in the process. But, so far, the most visible effort, the creation of the State Department's Office of Public Diplomacy and Public Affairs—first helmed by marketing maven Charlotte Beers and most recently taken up by Karen Hughes—has been met with near-universal derision. The right sees it as a sellout to global public opinion, while the left sees it as reinforcing the hypocrisy of the Bush administration's foreign policy. "America's problem is not with its brand," Naomi Klein, a veteran anti- corporate campaigner, wrote in the Los Angeles Times, "but with its product." The rebranding mantle has also been taken up by a group of Madison Avenue execs called Business for Diplomatic Action (BDA), organized by marketing legend Keith Reinhard (best known as the guy behind the McDonald's "You Deserve a Break Today" campaign). But, so far, BDA has done little beyond distribute its "World Citizens Guides"—passport-sized etiquette manuals for young travelers—and organize a series of brainstorming conferences.

Neither the State Department's nor the BDA's efforts have produced much in the way of results, and that may have less to do with their flawed approach than with the fact that they are powerless to change the fundamentals of anti- Americanism. As Klein points out, the problem for the United States is less a matter of image than of policy and of the current structure of international relations—the world is angry with us not because it doesn't like cowboys, but because it doesn't like hegemons. And it doesn't help that, in a media-saturated global culture, our claims to be promoting democracy and freedom are undercut each time Al Jazeera broadcasts images from Abu Ghraib to its millions of viewers.

This is why many marketeering gurus and CEOs are ready to give up on trying to rebrand America. "What was a sort of gradual uprising against the march of Corporate America has turned into something much more profound," says Montgomery, "and I don't think the tables can be turned." So it's no surprise to hear many of the same marketers—and their corporate clients—calling for an entirely new strategy: Go local. Drop the images of cowboys and NBA stars. Hire local celebrities. Don't talk about how a hamburger bestows a little bit of America with every bite; instead, tailor its recipe to the regional cuisine. McCann-Erickson, a global ad agency, was one of the first to advise such a strategy; in 2003, it sent its U.S. clients a memo telling them to downplay their national ties and develop "strong local roots" abroad. More recently, GMI declared, "American multinational companies will need to mount a valiant effort to distance themselves from the image of the U.S. federal government and its unpopular foreign policies in the new year or risk continued brand erosion and ongoing boycotting."

Indeed, some companies have already implemented this strategy. "Spam has done that well, even though it is owned by [the American company] Hormel," says Allyson Stewart-Allen, director of the London firm International Marketing Partners. "The advertising they do isn't the American ad voiced over with accents, but [ones] created in local settings with local actors." Frederic Kropp, marketing professor at the Monterey Institute of International Studies in California, singles out Heinz. "If you were to go to Britain, I bet 99 out of 100 customers would swear Heinz is a British brand," he says. "They don't emphasize their country of origin, just as if you were to go to Middle America and ask about Nestle." And everyone remembers the classic scene at the beginning of Pulp Fiction in which John Travolta recounts how, in Paris, a Quarter Pounder with cheese is called a Royale with cheese, because "they got the metric system there, they wouldn't know what the fuck a Quarter Pounder is."

To be sure, these firms have been working on their "local" campaigns for years. But they, like Nestl, are now seen as the models to follow rather than the odd men out. Nike no longer sells Michael Jordan and his hoop-star successors abroad; its European campaigns are all about local soccer celebrities. Budweiser runs ads in Great Britain that poke fun at American men. Pepsi may have taken the new anti-Brand America strategy the furthest: According to The Economist, the soft drink-maker has launched an ad campaign in Bahrain that builds up Coca-Cola as an American brand while positioning itself as the local favorite. "American executives are reluctant to put big chunks of money in carrying the flag forward," says ABC Namebank's Javed. Taken together, the message is clear: It no longer pays to sell America abroad.

SUCH ADVICE MAY at first sound unpatriotic and deeply cynical—responding to anti-Americanism by embracing it. But it's actually a positive development. As many marketers and CEOs have concluded, the United States is a country so powerful that even its most benevolent policies are likely to draw massive protest from some sector of the world community, a community that also happens to double as their consumer base. Why risk losing customers by associating themselves with such a volatile brand image? There are benefits for the U.S. government as well. Just as our unilateralist foreign policy casts a shadow over our exports, so, too, does our commercial image influence our international standing. "[W]hether we like it or not, commercial brands are increasingly performing the role of transmitting national culture," wrote Anholt in The Journal of Brand Management. "[B]rands are actually the means by which those consumers form their views about national identity in the first place." Sometimes this can be a good thing, such as when Swiss watches and cuckoo clocks reinforce Switzerland's image as an efficient and refined nation. But, too often, it can have negative connotations. Wal-Mart's anti-labor policies, Exxon's poor environmental record, McDonald's junk-food menu—none of these helps improve the image of the United States as a force for good in the world.

Ultimately, going local in a global economy is simply good business, regardless of the rise and fall of the U.S. government's international standing. "American companies are perceived here in Europe as insular and imposing their American templates and products and service ranges on consumers without assessing their appetite for them," says Stewart-Allen. "What this episode is hopefully helping American firms confront is that they need to be more tailored to their international markets." In other words, less Quarter Pounder, more Royale with cheese.