The term Succès de scandale (French for “success from scandal”) originates from the Belle Époque (‘beautiful era’) in Paris, where artistic success began to be attributed to the public controversy surrounding their work. The adage is now echoed as ‘there is no such thing as bad publicity’, and instead of Édouard Manet and Oscar Wilde it’s now Primark and Pret. Whilst, it has long been a well-established concept that if your starting point is obscurity, bad publicity can be outright helpful. Alan Sorensen, an economics professor at Stanford University examined the effects of book reviews in the New York Times. In his study, he found that for unknown authors, however, it did not matter whether a book was panned or lauded. Simply being reviewed bumped up sales by a third.
But what about if you’re a huge multinational cooperation? You certainly have a lot more to lose and far less to gain. Of course, there isn’t a rule on the matter, but in the age of new wave media; characterised by 24/7 news, online outlets, and a myriad of social media platforms do consumers have the collective memory to hold a brand to account? Simply put, the zeitgeist is so full of noise that isolating and recalling every ‘scandal’ has become nigh impossible. Admittedly, some businesses seem to have more resilience than others in weathering fatal situations. However, in the current climate, there are two different mantras which best characterise a brands catastrophe survival guide. Either: i) Price yourself, so they can’t afford to hate you, or ii) be big enough that they can’t live without you.
For the former, let’s take Primark. In 2013 more than a thousand people were killed when the Rana Plaza factory, which supplies Primark, collapsed in Bangladesh. Despite the devastating accident, the retailer appeared to escape unscathed financially as profits rose by 44% the following year in what Charles Sinclair, chairman of Primark’s owner Associated British Foods, called an “outstanding” year for the brand. Hate the brand, love the price seems to be the proverb which best characterises our relationship with brands like Primark, Easyjet and McDonalds.
For the later, Wolfsburg in Germany is a city the size of Monaco, built from scratch by the Nazis for the explicit purpose of manufacturing immense quantities of automobiles. It’s here where Volkswagen build 3,000 vehicles every day. This is still the case, despite the company’s systematic effort to cheat on emissions tests; the revelation should have brought the company to its knees. Yet—$30 billion in compensation and repair costs and 11 million affected vehicles later—Volkswagen is back on the offensive. VW shareholders will likely scoff at the notion that the implications of the scandal didn’t cut deep, but a simple line graph suggests that while the share price plummeted, sales didn’t.
It’s indicative of the fact that we’re exposed to news of a PR epidemic with such regularity that after previous mega-scandals, including BP Plc’s 2010 oil spill, infrastructure has been created (in the US) to consolidate claims of state and federal regulators, along with the bulk of customer lawsuits, into a single legal proceeding. That process allowed VW’s U.S. outlay to become something of a fixed quantity relatively quickly and quietly. Similarly, in Germany, Volkswagen’s proximity to political power is enshrined in statute; presidents, chancellors and cabinet ministers have cut their political teeth in the state with VW at their side. Put in blunt political terms, when a company is as big as VW or BP, that nexus of political affinity and economic awareness ensures that company failure is too big a threat to prosperity for governments to be a neutral observer.
So, do the likes of Uber and Facebook have anything to fear? Almost certainly. With neither currying favour with Government and an endless stream of internal issues, a quick resolution doesn’t look probable. However, if one is reached, under the current malign of consumer information overload. Don’t trust our memory to last. After all, how likely is it that when you’re low on fuel, will you drive past a BP petrol station and turn up your nose “because they caused that huge spill.”