We’ve heard the old saying, “'There's no such thing as bad publicity,” a quote made famous by P.T. Barnum.
Barnum, known as an entrepreneur and savvy publicist, was making the case that when your company is in the news, whether the coverage is positive or negative, it draws attention, and is, therefore, a good thing.
Maybe it stems from the Oscar Wilde quote, “The only thing worse than being talked about is not being talked about.”
But, is this true? Does ANY media coverage increase a company’s value?
I decided to do some research on this theory to prove the point that, in fact, some PR truly isn’t good for the brand.
Here are four cases to consider:
When I asked my followers for some examples, the first that came up involves Gerald Ratner, who was mentioned by multiple people.
The story goes like this: Ratner inherited his father’s jewelry business and turned it into a multimillion-dollar enterprise. Life was good, until one day, in a speech at the Institute of Directors in front of an audience of more than 6,000, he made some comments about his business that were less than flattering.
When asked how his company could be selling a sherry decanter for the price of £4.95 he answered, “...to the amazement of his audience and his shareholders, the following: ‘How can you sell this for such a low price?’, I say, ‘Because it’s total crap.’”
The story continues, “To make sure that he really made a good job of it, he also stated that his company, ‘sold a pair of earrings for under a pound, which is cheaper than a shrimp sandwich from Marks and Spencer, but probably wouldn’t last as long.’”
Within days, the stock price plummeted by more than $600 million. A phrase was coined for this debacle, which is now known as the “Ratner effect.” Some use the term “doing a Ratner,” which means “really screwing up.”
LifeLock, a provider of identity protection services, “promised in ads that its $10 monthly service would protect consumers from identity theft. The company also offered a $1 million guarantee to compensate customers for losses incurred if they became a victim after signing up for the service,” reported Wired.
To back up its claim, the company’s CEO published his social security number in ads on websites and billboards. Unfortunately, his identity was stolen at least 13 times.
“Davis' history as an identity-theft victim would seem to call into question the company's ability to protect consumers from a similar fate,” the Wired story went on to say.
The company was later fined $12 million for deceptive business practices.
L Brands, formerly known as Limited Brands, the parent company of Victoria’s Secret, made some missteps that caused its stock value to decline 47% in 2018.
Most notably, “Victoria’s Secret, once a powerhouse that shaped the notion of sexiness for many Americans, has found itself at odds with consumer tastes in the #MeToo era,” says The New York Times. “The shares of L Brands have plummeted in recent years based on the brand’s dismal performance...”
Despite the change in consumer demands, the retailer hasn’t pivoted its PR and marketing fast enough. As marketing consultant Rachel Vandernick puts it in her blog, “Thoughtless branding, thoughtless product design, thoughtless targeting,” has led to the company’s free fall.
A few weeks ago, the company laid off more employees, just as the holiday retail season gets underway. “Victoria’s Secret is laying off about 15 percent of the brand’s employees at its Columbus, Ohio, headquarters as the beleaguered lingerie chain struggles to reshape its image,” continued The New York Times. Its head of stores and store operations is also stepping down.
In the wake of its oil spill in the Gulf of Mexico following the explosion of the Deepwater Horizon, BP spent millions on ads and PR to try to highlight its efforts to make the situation right. The campaign featured the CEO “cleaning” things up in the Gulf. But throwing money at the problem didn’t work the way BP had hoped.
Instead, journalists pointed out that while the company shelled out money on its PR campaign, business owners, fishermen and others who were affected by the spill struggled to maintain their livelihoods.
The situation wasn’t helped by the way BP handled its initial response to the crisis. Tony Hayward, BP’s then CEO, “...was ridiculed for telling reporters ‘I'd like my life back’ earlier in the crisis...” which killed 11 men. “He also suggested that the environmental impact of the spill would be ‘very, very modest.’"
BP’s stock dropped over 50% due to the media coverage of this debacle. “BP's stock fell by 51% in 40 days on the New York Stock Exchange, going from $60.57 on 20 April 2010, to $29.20 on 9 June, its lowest level since August 1996. On 25 June, BP's market value reached a 1-year low. The company's total value lost since 20 April was $105 billion,” according to Wikipedia.
As these examples illustrate, the idea that any PR is good PR is simply not true.
What can we learn? Thoughtful approaches to any public relations campaign yield better results than merely shooting from the hip, regardless of the brand or situation.
You'll find Michelle Messenger Garrett at the intersection of PR, content marketing and social media. As a public relations consultant, content creator, blogger, speaker and award-winning writer, Michelle’s articles and advice have been featured in Entrepreneur, Muck Rack, Ragan’s PR Daily, Spin Sucks, Freelancers Union and others. Her blog was named to the list of Top 25 Must-Read Public Relations Blogs and she was recently named one of the Top 13 Content Marketing Influencers to Follow in 2018 and one of 50 CMWorld Influencers to Follow in 2018.
Photo via Unsplash
You'll find Michelle Messenger Garrett at the intersection of PR, content marketing and social…
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