You’ve heard the old saying: There’s no such thing as bad publicity. Unfortunately, that couldn’t be further from the truth. There’s real value in building a brand with a consistent, positive message than relying on controversy, gimmicks, and viral hits that can backfire to put yourself on the map. When it comes to building a trustworthy, lasting brand, there’s another saying that is perhaps more relevant: Slow and steady wins the race.
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You don’t need to look far to see how bad publicity can have disastrous effects on your brand. In 2015, when it came to light that Volkswagen had tricked its customers with the promise of “clean diesel” by installing defeat devices that would make their cars pass emissions tests even though they were emitting 40 times the level of pollutants allowed in the U.S. While their deception was exposed in mid-2014, they continued to fight the claims, finally admitting the extent of what they had done in September 2015.
The losses were catastrophic. Stock prices immediately dropped 20% and November sales dropped 24% in 2015 versus the same period in 2014. The company was forced to conduct a massive buyback of almost 500,000 cars in the U.S. as well as compensate customers. By the time the dust had settled, Volkswagen’s CEO had resigned, the company had lost approximately $30 billion, the company had pleaded guilty to criminal charges of defrauding the U.S. government, and it was ousted as the number one selling car manufacturer in the world. Further tarnishing their already blackened reputation, in early 2018, it was revealed that they tested diesel emissions on monkeys in 2015 when they knew the scandal was about to break in an effort to prove that diesel fumes aren’t harmful.
But that was more than bad publicity. Volkswagen had knowingly cheated its customers and blatantly engaged in illegal behavior. SeaWorld, on the other hand, didn’t believe they were doing anything wrong with their orca program and were operating within the law. While there was already some criticism of keeping orcas in captivity, they were blindsided by the 2013 documentary Blackfish. The film, which detailed the events leading up to the death of SeaWorld trainer Dawn Brancheau by an orca named Tillikum and the cruelty of keeping orcas in captivity, went on to become a critical and commercial success. And SeaWorld paid the price.
The fallout was swift. In the second quarter of 2015, they posted an 84% loss in revenue, their attendance started to decline, and their stock began to plummet. Their attendance continues to steadily drop despite ending their orca program and performing aggressive damage control, including investing $10 million in PR and enlisting experts to contradict Blackfish’s claims. SeaWorld’s stock price is approximately $15 in 2018 versus the all-time high of $39.65 it hit in 2013, the CEO resigned, hundreds of employees were laid off, and they have lost tens of millions in revenue. And that’s just so far.
The Unfriendly Skies
Who can forget the infamous video of a passenger being bloodied and dragged from a United Airlines plane? United Airlines definitely doesn’t. The company is no stranger to bad press, whether it’s for breaking a guitar, bribing a government official, denying passengers entrance on a flight for wearing leggings, or its role in the death of a giant bunny, but their most nefarious misstep came in April 2017 when a passenger was forcibly dragged from an overbooked flight. Of course the entire incident was caught on video and immediately went viral.
The incident itself was bad enough, but United’s response only escalated the negative press further. CEO Oscar Munoz issued an insincere apology saying he was sorry they had to “re-accommodate” passengers, then sent an internal memo to United staff blaming the customer for what happened. The airline immediately became the butt of every late-night comedian’s jokes, was trolled on Twitter with the hashtag #NewUnitedAirlinesMottos, took a hit to its stock value, and was forced to adopt extensive new policies to prevent a similar incident from happening again. Ultimately, their bottom line was unaffected because they are still the cheapest airline, but it’ll be a long time before the company is associated with good customer service and “friendly skies.”
You may not remember the short-lived startup Juicero, but it’s a perfect example of the worst case scenario fallout of bad publicity. The high-tech juice machine startup looked like a promising new company, but was quickly snuffed out by some bad press, and a very ill-advised attempt at damage control. Juicero rode the wave of the healthy juice craze to market a $400 machine that claimed to exert four tons of force on prepackaged bags of fruit and vegetable mulch to produce fresh juice. Silicon Valley investors ate it up and the company was immediately bolstered by $120 million in venture capital.
There was one glaring flaw: your hands could do the same thing that the overpowered machine composed of “aircraft-grade” materials could. Two Bloomberg reporters demonstrated that they could squeeze the bags with their hands to produce almost the same amount of juice in less time. Add the fact that you couldn’t buy juice packets unless you bought a machine and the whole operation felt like a scam. Their investors and early adopters felt duped.
Unfortunately, juice guys aren’t PR guys, and Juicero’s CEO issued a lengthy statement that tried to circumnavigate the obvious screw-up by throwing fancy terms like “delivering raw, plant-based nutrition,” “connected system,” and “closed loop food safety” at you instead of just admitting they were wrong. That didn’t go well. The company announced it was shutting down in September 2017 after just 16 months in operation. The one proof positive of the value that bad publicity has is that most people hadn’t heard of Juicero until the scandal broke. Sadly, now it’s best known as a cautionary tale.
When Good Is Great
On the other hand, there are brands that have made feel-good press their bread and butter, and it has paid off far more than any negative publicity could. Aerie, American Eagle’s lingerie line, benefited from a 20% spike in sales thanks to their #AerieReal campaign, promoting body positivity and ending the common practice of retouching photos. Similarly, Old Spice embraced its reputation as a dowdy old brand and flipped it on its head using humor leading to an immediate spike in sales (at one point, a 107% increase!). And Coca-Cola has always been consistent in its feel-good branding, whether it’s making you cry with a Super Bowl commercial targeting online bullying or its simple, and wildly successful Share a Coke campaign, which resulted in a revenue boost for the first time in 10 years. For truly lasting success, follow in the footsteps of these brands instead of falling prey to the short-lived, flash-in-the-pan, viral success that so many brands seem to pursue today.
Article by Carly Martinetti
About the Author
Ms. Martinetti is the partner and managing director at Press Friendly, a startup that helps startups tell their story.