When we hear bad news about a major company, we follow avidly as former brand kingpins are toppled from their lofty thrones in the few minutes it takes to post a news release online. How do media reports affect our brand loyalty, and how do they impact the degree of trust we feel toward these brand leaders?
For example, BP PLC has been charged with responsibility for the worst oil spill disaster in history—thanks to the oil rig fire that has destroyed not only fishermen’s livelihoods, ruined coastal environments and caused upheaval to the world’s oil supply but also encased BP’s formerly stellar reputation as a global brand (ranked #83 in 2009) in slimy residue. Greenpeace recently posted make-over’s of the company’s logo on its website depicting the oil company with less than complimentary images and words.
We’ve also seen the previously pristine Toyota brand suffer immense damage as a result of their unwillingness to put customer safety above corporate profits and performance. Today they are still trying to repair their tarnished image after a series of embarrassments and ongoing reports about manufacturing negligence and lack of responsiveness to consumer complaints.
Even the highly-vaunted Lexus brand was hit hard after Consumer Reports, a trusted source of information about brands in various consumer goods categories, labeled the 2010 Lexus GX 460 dangerous and issued a “Don’t Buy: Safety Risk” recommendation in its April 13 Cars Blog. The impact of such a warning could lead to a drop in overall sales for Toyota, especially as the company is trying to recover from its recall fiasco.
Worse than the lost auto sales for Toyota is the loss of consumer confidence in its brand. Numerous Lexus owners posted comments on CR’s Cars Blog the day the “don’t buy” warning was announced, expressing feelings ranging from deep concern to total outrage. Some readers even stated their annoyance with Consumer Reports: “…I hope that CR isn't trying to stay relevant by feeding into today's 24-hour news cycle with its insatiable hunger for negative news.”
Public opinion is very sensitive to media reporting of real or perceived disasters and debacles. Not even President Obama is immune from brand erosion. Denny Hatch’s blog, Business Common Sense, says it succinctly: “Obama’s massive PR failure (following the BP oil rig fire)…is not about politics, it’s about process—an exercise in public relations and communication that directly applies to every organization—a one-person entrepreneurship, CEOs of a small business or a giant corporation all the way up to the President of the United States.”
The issue in question is not the facts of what the White House did or didn’t do right after the fire, but the perception transmitted by multiple media channels that they did nothing. Says Hatch, “This is about critics putting negative spin on administration policies and the White House shrugging it all off.” Hatch’s conclusion is worth noting: “It’s not good when the face of your organization has egg on it.”
Not all news is bad news, however, and plenty of media attention was showered upon Apple when it introduced its newest offspring, the iPad, such as the glowing review published by Engadget. As Apple has so often and so masterfully branded itself, and Time magazine reported just prior to the iPad’s launch, “…it's not about the features—it's about the experience. You just have to try it to see what I mean."
In a time of brand flux and economic uncertainty, it all comes down to the user experience. If Toyota’s products are deemed unsafe, their sales plummet. If the oil giant BP fails to respond quickly and appropriately to a global disaster, their image is damaged and their credibility suffers. If the White House seems to turn a deaf ear to a major environmental disaster, they are perceived as uncaring and unresponsive. If a company like Apple continues to offer products that customers love, they will enjoy market domination, which makes it difficult for competitors to gain an advantage.
All of these situations ultimately focus on the relationship between a brand and its customers. It comes down to trust. Is your brand trustworthy? Can you identify other companies who have lost or gained trust in the marketplace as a result of being scrutinized by the media? Share with us the way your brand has been affected—positively or negatively—by media coverage.