"There is no such thing as bad publicity". Identify examples of negative publicity from the press and broadcast media and critically analyse the pros and cons of this statement. by Gordon Skaljak, 20-Feb-2001. Publicity Any information about an individual, a product, or an organisation that is distributed to the public through the media, and that is not paid for, or controlled by, the seller. Advantages
Disadvantages
One can argue that "bad publicity" does exist and can be discussed on the following points: 1. - Bad Publicity - (a) - Can have negative effect on company - (b) - Can have no significant measurable effect - (c) - Can result in positive effect on company (either managed or by chance) 2. - Bad Publicity - (a) - Can occur by accident or when caused by negligence or poor management policies or oversight. - (b) - Can be produced by competition or an adversary interest group. - (c) - Can be deliberately self-inflicted (planned) 3. - Bad Publicity - (a) - Can have long-term or permanent effects - (b) - Can have medium effects on company - (c) - Can have short-term effects on company Bad publicity can often have a negative impact on company in question, and can badly affect any of the following: company's reputation and/or sales, market position, market share, share prices, customer loyalty, brand value, etc. The effects can be sometimes temporary but often long-term or permanent. Examples of bad publicity news that had negative effect on the company: Bad Publicity Shakes Claims Direct – (26 Jan 01) -- The UK's Claims Direct, an online insurance claims settlement service, has seen its business nosedive and its publicly held shares fall 55 percent following reports that it charged excessively high costs and fees for the cases it agreed to accept. Dome sponsors face poor returns – (16 Nov 00) -- The sponsors of the Millennium Dome, who paid up to £12m to be involved, have found that only a fraction of the low number of visitors to the attraction are experiencing their zones. …. When asked if BT believes the Dome's poor publicity has reflected badly on the sponsor, the spokesman says: "It is difficult to separate the overall impression of the event from those participating in it but there is no indication that BT has been hurt by the bad press." Psion counters bad publicity with £4m advertising spend -- (27 Sep 96) -- The Progress Agency is to see its marketing budget for the Psion account quadrupled to £4m as Psion bids to counter poor publicity following its failed buyout of Amstrad. Alcopop sales plummet -- (09 Oct 97) -- Exclusive sales figures show alcopops in dramatic decline as premium packaged spirits grab share. …. The Spilt Drinks Company, distributor of the Jammin alcopop, has gone into voluntary liquidation, blaming bad publicity surrounding alcopops for its collapse. Jammin will continue to be distributed through 21st Century Drinks. Microsoft Shares Fall As Government Battle Drags On -- (25 Dec 97) -- Shares of the Microsoft Corporation fell to a seven-month low yesterday as investors grew increasingly concerned about bad publicity generated by the company's battle with Federal antitrust regulators. Microsoft fell $4.375, or 3.5 percent, to $118.9 .… Safety Concerns Hurting Daimler -- (7 Nov 97) -- Daimler-Benz A.G. said this week that about 1,000 customers had cancelled orders for the Mercedes A-Class model after a wave of bad publicity about the car's safety. August 2000 -- A 23-year-old student, Mark Jakob, published a bogus press release claiming Emulex Corp's CEO was about to step down. This was picked up by small tech-news site Internet Wire and then published on Bloomberg's financial news service. The hoax sent shares in Emulex, a California-based hardware manufacturer, dropping 62% on Wall Street, slashing $2bn off its stock and losing investors an estimated $100m. Jakob made $250,000 from the drop, which he's now counting from behind bars. Five months earlier, 43-year-old Fred Moldofsky pulled a similar stunt on communications giant Lucent Technologies. He posted a fake news story on a Yahoo! Finance board claiming Lucent's profits were down. Within hours, its stock fell by 3.6%, wiping $7.1bn off its market cap. Bad publicity can occur but with low or no significant impact on the company. Some companies can choose to ignore it (sometimes). Examples of bad publicity that had no significant impact: Axa happy with controversy -- (10 Sep 99 ) -- Despite its problems with Manchester United planning to pull-out of the third round, Axa's sponsorship of the FA Cup has given it spontaneous awareness figures peaking at an impressive 20% just a year into the agreement, according to figures from Ipsos-RSL's Sponsortest. The French insurance giant dwarfed the awareness figures of any other sports sponsor and seem to reinforce the old cliché that 'bad publicity is better than no publicity' following the widespread controversy surrounding United. If you are managing an international business and see potentially bad publicity directed against you, sometimes you can ask yourself: "does it really matter to my core market?" The anti-McDonald's information on mcspotlight.org has been going for five years, yet McDonald's is still growing. Self-inflicted (or planned) bad publicity. Some companies themselves deliberately plan "bad publicity" – presumably trying to maximise visibility of the brand. Examples of bad publicity that was deliberately produced by the company: Benetton is probably one of the few companies who could argue that it worked for them. Controversial advertising with shocking images certainly produced reaction. However, this was geared mainly to shock general public but not their main target market – young people who often like to shock their parents and are not easily shocked by advertising. What was important is that the company calculated it could achieve a greater visibility for the brand without any negative impact on their specific target audience. It worked! ________________________________________ So, can companies prevent or minimise the damage of bad publicity? Many PR monitoring agencies could argue that that is the case and this is why there are so many engaged in this business. Typically, an agency is engaged in monitoring news in press, TV, web or other media on behalf of their client company. They can respond immediately if potentially damaging information is published about their client. The service sometimes includes also analysing the effects of negative news on your company and/or "damage management". The latter can include various responses to counteract or minimise potentially damaging effects of "bad publicity". Analysts review monitored data, evaluate its potential risk to the client and can react immediately, or simply raise the alarm. ________________________________________ CONCLUSION: Yes, there is such thing as bad publicity. It does not mean that "bad" is always synonymous with negative or truly damaging effects. Bad publicity can be managed in various ways, but very often is not managed successfully. Whether its impact on your business is really damaging, depends on how well and how fast can you react and manage it. _____________________________________ © 2001 – Copyright
by Gordon Skaljak. All rights reserved. |
