In 2017, a small family-run jewellery store in North Carolina, USA ran into quite a bit of trouble with its advertisement that people said promoted all the wrong things. Following that backlash, the jewellery store’s popularity fell, and sales plummeted. It is things like these that beg the question, “Is there really no such thing as bad publicity?”
That phrase, popular across literature, is attributed to PT Barnum, the showman on whose story the movie The Greatest Showman was inspired. But PT Barnum thrived even on negative publicity because he dabbled in what was then considered bizarre. Fast forward to today, that phrase might not be as suitable as it was in the 19th century.
Take the case of Toyota in 2009. When news broke out about faulty cars, its losses rose to the neighbourhood of 2bn dollars. Or consider the case of Pepsi’s problematic campaigns that brought to the fore issues about racial equality. History – recent history — is rife with examples where a company suffered losses originating from bad publicity.
In all those cases, the public perceived the companies’ actions in the wrong light, and hell broke loose for those companies. Clearly, as these companies can attest, there is something as bad publicity. Controversy, and by extension, bad publicity, can, and will, have consequences.
Irrespective of what your ideas and intentions behind a project are, how the public receives the content, and the ensuing publicity, will affect the context within which the same public will view your content. In such cases, your content will not be viewed the way you intend it to be viewed but will be dissected within political and socio-economic conversations.
Bad publicity can also affect sales through smear campaigns or boycotts. For companies selling products or services, the difference between a good marketing campaign and as much as a bad review can spell detrimental effects to its bottom line.
In 2019, two entrepreneurs had to close their sushi-pizza restaurant due to high debts. In an interview, the duo attributed the shut down to high wages and rents. One of them was quoted as saying that he thought that hospitality workers were overpaid compared to the value they provided. This created a major backlash.
Over time, two entrepreneurs, whose names very few had heard of, entered the public’s naughty list. Many pointed out that the idea of a sushi-restaurant is under-researched. Now, it is unlikely that the duo will recover enough to start a new business, get a loan, or enter into partnerships.
This begs the question: when is bad publicity better than no publicity?
Research shows that negative publicity is useful for relatively unknown brands. Bad publicity helps build product awareness for the company’s products and help it put itself out there in the market.
Consider the 2006 film, Borat: when that movie came out, it was very critical of the country of Kazakhstan. Kazakhstan had originally banned the film but later turned around and embraced it. In fact, hotels.com reported about 300% increase in the information requests about the country because of the movie. There are examples of food and beverage places seeing an increase in sales even after a scathing review.
Once a company starts to build traction, there are one of two things on its mind. It’s either focussed on trying to make the public think that its product is good or it’s just trying to get the public to notice it exists. In markets where the competition is high, and the products can easily be substituted, new companies are focussed on just being in the general public’s crosshairs.
In that case, it doesn’t matter what kind of publicity a company gets as long as it gets recognized.
One rationale is that, if a company feels that the review or publicity is unjustified, then it has the capabilities to undo – or redo – that when enough people notice the product. The chances of redemption are higher for a relatively unknown company if it gets any bad publicity at all.
Take many famous books that got bad reviews. Despite their bad reviews, they managed to do well. In fact, for books like Twilight and those by Chetan Bhagat, sales increased after the pop culture derided those books. For books by relatively well-known authors, negative reviews and bad publicity meant that their sales would drop. For relatively unknown authors, the impact of a bad review on the sale of books was minimal.
One rationale offered by a team at Wharton is that a negative impression fades over time, but the increased awareness remains for a long time – enough for a company to build a good user base. This increased awareness can help companies sell more products or help the authors sell more books than without such publicity.
Another rationale offered is that new entrants in the market usually have very little to lose. Traders, owners, and artists might not really have a pick in choosing things because the key is just to be seen. It is not unheard of that a small producer fanned rumours and negative reviews just so that it appears on people’s radars. Over time, the producer is remembered and his controversial works? Not so much.
Conclusion
Whether publicity is good or bad for the business is very circumstantial. What worked for Chetan Bhagat did not work out for the sushi-pizza entrepreneurs. It is difficult to say what sort of PR tactics will work for a business because the average consumer is becoming socially conscious. Companies are finding themselves hard-pressed to be more ethical in the way they conduct their business.
What we’ve managed to say for certain is that the adage ‘There’s no such thing as bad publicity’ is a blatant lie. In fact, there does exist something like bad publicity, and it is something that businesses need to contend with actively.