Download Negative Publicity: What Companies Need to Know About Public

Negative Publicity: What Companies Need to
Know About Public Reactions
By David H. Henard
c
'rises on the magnitude of the Exxon Valdez
grounding or the Enron accounting scandal justifiably deserve our attention with respect to public response strategies. For most companies however, the
likelihood of such crises is relatively low compared
to the likelihood of being the target of a negative
publicity campaign, defined as derogatory or defaming public information about a company.
These campaigns are a standard publicity tool for
both local and global issue-advocacy groups and
their occurrence is predicted to rise in the coming
years. Negative publicity in the business domain
takes a variety of forms and can range in severity
from a yearly press release listing of "dangerous"
holiday toys to full-blown media campaigns such
as the Center for Science in the Public Interest's
(CSPI) targeting the rollout of Procter & Gamble's
fat-free WOW™ snack chips or, more recently, the
People for the Ethical Treatment of Animals' (Peta)
campaigns against beef consumption at Burger
King and McDonald's. While the consequences for
a company are obviously not as dire as ones resulting from a major crisis, those resulting from a negative publicity campaign range from short-term
inconvenience if handled well to long-term image
and financial impairment if handled poorly.
Negative pubiicity creates a dilemma for two key
constituencies — the targeted company and the
general public. The public must first decide how to
interpret the negative information and then now
to respond to it while companies must decide if
and how to publicly respond to the publicity.
While much has been written about the actions
and reactions of spokespeople in the aftermath of
crises, there has been relatively little investigation
of how customers react to hearing negative information about a company. By improving our under-
Negative publicity can
range in severity from a
yearly press release listing of
"dangerous" holiday toys to
full-blown media campaigns.
David H. Henard
8
standing of how the public responds to negative
publicity, companies will t>e better equipped to
both prepare for and respond to it. This article addresses two key questions that are of interest to
senior managers and company spokespeople: (1) is
negative publicity an effective persuasion tool? and
Public Relations Quarterly
(2) what are the rules for company response to negative publicity?
Is Negative Publicity Effective?
For years, various people and organizations have
used negative publicity in attempts to manipulate
individual behavior Negative information has traditionally been broadcast in an effort to associate a
targeted activity (e.g., smoking cigarettes) with negative consequences (e.g., lung cancer) with the goal
that individuals will cease the activity out of either
general anxiety or fear ofthe negative consequences
associated with continuing the activity. Smoking
cessation, reduction in sexually transmitted diseases and reduction in alcohol consumption are
each the subject of past negative publicity campaigns. The use of negative publicity in the political arena also springs to mind. Whether it is a simple
information leak or a well-planned campaign,
politicians have become adept at negative publicity
tactics. As noted, negative publicity campaigns are
also increasingly finding their way into the business domain as issue-advocacy groups use negative
information in attempts to sway public opinion.
Is negative publicity an effective public persuasion tool? In a word, yes. Academic research from a
variety of professional fields provides an insight as
to why. One of the consistently robust research
Negative information
captures people's attention
to a greater degree
than positive information.
findings is that individuals pay greater attention to
negative, versus positive, information when evaluating messages. This phenomenon is known as the
negativity bias. Simply stated, negative information
captures people's attention to a greater degree than
positive information. This is one reason that promotional teasers for the evening television newscast typically highlight a negative story. People are
more likely to pay attention to the negative information and tune in later for the full story than if it
had been a positive promo.
One rationale for the existence of the negativity
bias is that individuals are predisposed to receiving
positive information. The vast majority of the information that people receive throughout the course of
their daily lives is either positive or neutral in nature.
Therefore, such information lacks diagnostic power
and may not actively command the attention of inWinter 2002
dividuals. Negative information, on the other hand,
is relatively unique and usually unexpected. This unexpectedness may account for the disproportionate
weight that individuals afford negative information.
Given this relative uniqueness of negative information, individuals may consider it to be more informative and diagnostic than the comparably more
mundane positive or neutral information. In short,
negative information grabs people's attention more
effectively than positive information.
As a publicity tool, negative information has two
hooks that work in its favor. As noted above, the
first is that individuals pay relatively closer attention to negative information than they do to positive information. The second hook is that negative
information tends to linger longer in people's
minds than positive information does. Long after
negative information is presented to the public and
even after individuals fail to recall specific facts
about the original information, some negative bias
remains. Ironically, even after a clear and undisputed refutation of negative information is made,
individuals still have some residual negative bias
toward the target of the original publicity. This is
why negative publicity is so powerful. Even when
the information is refuted, the general public will
still retain some measure of lingering doubt regarding the target. This is one reason why negative political campaigns persist and why advocacy groups
will continue to embrace negative publicity as a
public relations tool.
Motivation Matters
The outlook for the targeted company, however,
is not completely dismal. There is one considerable
psychological factor that impacts how the public
responds to negative pubiicity. Namely, the degree
of negative publicity effectiveness depends upon
the motivation level of each individual to actively
evaluate the negative information. This motivation
level is a key factor and stems primarily from the
personal relevance that the targeted company has
for an individual. Personal relevance is often noted
for the crucial role that it plays in the general persuasion process. The essence of its impact is that
relatively more motivated individuals (e.g., loyal or
likely customers) focus on core aspects of the information presented while relatively less motivated
individuals (e.g., occasional or non-customers) rely
on simpler, often emotional, cues in interpreting
information and developing a response to the negative publicity. For example, when Peta activists
launched a graphic and global campaign against
400 McDonald's restaurants recently, loyal patrons
were more likely to focus on the relevance of the
animal welfare claims being made by Peta while
less loyal McDonald's customers were more likely
to focus on the "McCruelty's Unhappy Meals" featuring an ax-wielding Ronald, which were distributed by the activists.
Non-customers are more apt than their relatively
more motivated counterparts to be swayed by negative publicity. Conversely, loyal customers are less
adversely impacted by negative publicity about a
company. Loyal customers are prone to reject information that runs counter to their existing positive opinion of a company. Additionally, these
individuals have a greater propensity to generate
counterarguments toward the original negative
publicity. Put simply, not only are loyal customers
more likely to discount negative publicity but they
are also more likely to formulate counterarguments
to the information presented in the negative publicity. Continuing with the previous example, loyal
McDonald's customers were much more likely to
dismiss Peta's claims and even rationalize why the
negative information was false or irrelevant in the
first place. This is a powerful force in the targeted
company's favor. Yet despite these favorable facts,
companies must note that negative publicity still
adversely impacts the behavior of even loyal consumers to some degree.
Response Options
A company that is the target of negative publicity has the opportunity to respond to the attack. In
responding to negative publicity, an organization's
spokespeople have the ability to shape the public's
reaction to the negative publicity. Recall that individuals, via the negativity bias, tend to pay greater
attention to negative information. This effect underscores the importance of a company's response
to any negative publicity because the nature of that
response can serve to either heighten or diminish
the psychological impact of the original negative
publicity.
Generally speaking, spokespeople have two alternative strategies to exercise in crafting responses to
negative publicity. They can either choose to respond or not to respond publicly to the negative
information. If companies choose to respond, they
may alternatively use either a direct or a qualified response. A direct response presents a claim that is
supportive of the company. A qualified response,
in addition to presenting the positive information,
acknowledges some aspect of the negative publicity
that is typically considered to be of minor importance to customers.
In the negative publicity domain, a direct response may simply involve refuting the negative
publicity without any acknowledgment of the validity of the original negative message. For exam10
ple, when Peta recently launched a national antimilk campaign, Dairy Council and other related officials openly dismissed Peta's claims and
emphasized the numerous health benefits of milk
consumption. A qualified company response, on
the other hand, acknowledges some minor validity
to the original negative information yet proceeds
to advance an overall refutation of that negative
We now know that the
company's struggle for public
opinion is more winnable than
perhaps previously thought.
message. Proctor & Gamble used a qualified response to refute the graphically vivid claims by
CSPI that their WOV^"^ snack chips caused gastrointestinal distress among customers. When admitting that the problem existed among a rare
number of individuals, P&G spokespeople went on
to stress the healthy benefits of the new fat-free
chips. Because a company's acknowledgement of
some aspect of the negative publicity in a qualified
response is atypical, it can lead some individuals to
perceive the company's response as more honest
and truthful.
Given the existence of the negativity bias, the
failure of a company to respond to or refute negative information might enhance the detrimental
impact of the campaign among loyal customers by
implicity reinforcing the original negative publicity. As such, "no comment" is generally not considered to be a viable company response. A "no
comment" response simultaneously fails to refute
the negative publicity or to forward a company position and should generally be avoided. Decisive
action is almost always preferable to inaction when
a firm is facing a crisis situation and substantial research reinforces the opinion that failure to publicly address negative publicity can lead to
substantially lowered customer attitudes, on average. Figure 1 draws from current research on this
issue and highlights the effect that the three company response options have across two broad customer types. From figure 1 it is evident that public
reaction to negative publicity is heterogeneous and
that the same company responses have different effects across different customer types. This provides
us with our first glimpse of the important insight
that the public neither reacts to negative publicity
nor to company responses in lockstep.
Public Relations Quarteiiy
Figure 1. Company Response Effectiveness
Across Customer Types
Son or Occasional Customers
No Comment response
+10%'
+8%
+6%
+4%
+2%
0
-2%
Qualified response
Direct response
-4%
Post-Publidty
Post-Response
LAjyal or Llkety Customers
+6%
Direct response
+4%
+2%
0
19.4
Qualified response
-2%
B
o
-4%
5
-6%
c
-8%
et
No Comment response
-10%
Posi-Publicitv
Post-Response
Rules For Responding
Negative publicity should not be interpreted as a
universally damaging event. At the onset, the general public's opinion of the targeted company will
undoubtedly be depressed to some degree given the
knowledge that individuals pay greater attention to
negative information than they do to positive information and that negative messages tend to
linger in people's minds longer than positive messages. When negative publicity concerning a company first surfaces, the situation often appears to
offer the attacked company little hope of public recovery. Yet, we now know that the company's
struggle for public opinion is more winnable than
perhaps previously thought. In fact, the upper
hand in this battle may actually reside with the
company under attack. Several rules or guidelines
that prescribe actions to take in the event of a crisis
already exist and have proved valuable to senior
managers and company spokespeople. Taking the
dynamics of public response into account, howWinter 2002
ever, presents us with three additional rules to
consider.
Response Rule #1: Understand the Dynamics ofthe
Situation. It is important for company management
to understand that customers do not respond to
negative publicity in a uniform manner. While
many senior managers may intuitively interpret
negative publicity to be a universally detrimental
event, emerging research indicates that the public
interprets this information in at least two distinct
ways. As noted in Figure 1, negative publicity adversely effects non- or occasional customers to a
much greater degree than it does loyal or likely customers. After exposure to negative publicity, noncustomers, for example, expressed purchase
intentions that were less than half that of loyal customers (8.8 V. 19.4 on a scale of 1-28). Therefore,
even before the company response, loyal customers
proved relatively less influenced by negative publicity. The upshot of these results for companies is
that the greatest degree of damage from negative
publicity will occur among the population that is
least likely to purchase from the targeted company.
While this dynamic is obviously no reason to celebrate, it does highlight the fact that public damage
from negative publicity is less financially harmful
than previously thought. While even loyal customers take notice of negative publicity, they tend
to give companies the benefit of the doubt and will
look to comments from spokespeople before
changing their perceptions of the company.
Understanding the dynamics of the situation allows companies to clearly gauge the situation from
a fully informed vantage point and to formulate a
public response that is strategically efficient.
Response Rule #2: Always Respond to Negative
Publicity. In keeping with the advice of countless
others, companies should formally respond to negative publicity incidents. As is the case with public
reactions to negative information, it is evident that
individuals also react differently to various company responses. Referring to the results in Figure 1,
loyal customers demonstrate a marked and significant rebound in purchase intentions after being exposed to either a direct or a qualified company
response. A "no comment" reply, however, induces
a significant decrease in purchase intentions, as illustrated. Ironically, non-customers' purchase intentions decrease following a company refutation.
While a "no comment" reply actually elevates the
intentions of occasional and non-customers, the
magnitude of change is low and there is no strict
statistical difference between purchase intentions
after any of the three company response types.
What these research results indicate are that company spokespeople must respond to negative publicity in order to shore up the perceptions and
11
purchase intentions of loyal and likely customers.
The alternative is untenable. While none of the
three company responses is likely to produce an appreciable attitude rebound among non- or occasional customers, the silver lining is that these are
the individuals that are least likely to purchase
from the company. Thus, the company's response
strategy should be geared toward their most likely
customers.
Response Rule #3: Plan Ahead. Several authors
advocate that companies should plan for crises in
advance so that spokespeople can operate from a
position of relative strength. There are two ways
that companies can plan ahead. The traditional
way is to assess your marketplace environment and
formulate a response strategy in advance of any
potential negative publicity event. This is a worthwhile venture. While there is no statistical distinction between the effectiveness of the direct and
qualified response types, the direct response may
be the generically best response option given the
fact that it does not reinforce any portion of the
original negative publicity and that it rebounds
loyal customer attitudes equally as well as the qualified approach. A second way to plan ahead is to
conduct activities that increase the number of individuals that are either loyal or Ukely users of your
products. There is a wealth of research that attests
to the fact that the motivation/personal relevance
level of individuals is capable of being heightened
or suppressed over time (i.e., it is not static).
Therefore, image building activities such as advertising, promotions and public relations events
serve to partially inoculate a company against future negative publicity by enhancing a company's
relevance among the general public. The greater
the general relevance of the company, the less susceptible the company is to negative publicity thus
making the task of company response to negative
publicity easier.
In closing, while it is certainly wise for companies to prepare strategies for responding to corporate crises, it is iust as prudent for them to prepare
for the more likely incidence of negative publicity.
In order to develop the most efficient and effective
response strategy to negative publicity, it is important to first understand the effects of negative publicity on the public. While many senior managers
might assume that negative publicity about their
company leads to widespread negative public perceptions, the reality of the situation is much different. It is true that negative information is
damaging, in varying degrees, to a company. The
key insight, however, is that the public responds to
such publicity in distinctly different ways. No matter how a company responds to negative publicity,
their least likely customers are apt to be adversely
12
swayed by the negative information. By contrast,
more loyal customers are somewhat predisposed to
resist the negative publicity and will look to a company's response for guidance before arriving at any
final conclusions. Thus, senior managers and company spokespeople should understand that the battle for public perception in a negative publicity
incident really centers on loyal and likely customers.
PRQ
David H. Henard, Ph.D. is an Assistant Professor of
Marketing at North Carolina State University. His research
interests center on corporate identity/reputation and new
product development issues and his work has been published in such journals as rh© Journal of Marketing Research
and r/re Journal of The Academy of Marketing Science, Prior
to his career in academics. Professor Henard worked thirteen
years for a large, multi-national consumer products firm.
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