There are many beliefs in marketing, many of which are in contradiction with each other. Some marketers profess that “any publicity is good publicity”, meaning that any exposure, even a negative one, will increase sales. However, we observe companies spending billions of dollars to limit the spread of negative information about the brand, using communication strategies. So:
- What drives the effect of valence vs. volume of publicity on sales?
- Should marketers point just at having positive exposure?
- When does exposure at any cost pay back?
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Volume vs. valence in word of mouth (WOM)
As one can imagine, both volume and valence of word of mouth have a positive effect on sales. The more consumers talk about a product (both online and offline), the more it increases brand and product awareness, making consumers more likely to purchase the brand. Therefore, brands that receive more exposure in the marketplace are generally more successful in comparison to less discussed/known brands.
Then, the valence of brand discussion matters. Once again, nothing new: products and brands that have a more positive valence (e.g., positive sentiment) have generally higher sales, while products that have negative valence have lower sales. The underlying phenomenon is that people learn from the experience of other people, and they try not to commit the same mistake, even if many people made it in the past. After all, will you buy a product with a 2 out of 5 stars average on Amazon even if it received thousands of reviews?
The negative effect of WOM valence can extend beyond sales. Negative WOM decreases brand equity, the stock market value of the company and it is a predictor of future declining sales for new products (e.g., movies).
However, some products are less affected by the valence of WOM. For example:
- Products that have a public consumption. For these products, it is easier to learn through observation, which motivates consumers to rely less on WOM valence, and more on volume.
- Products that are easier to try out. For a product with high trialability, a peer consumer’s advice is not an important quality signal as trying the product itself.
- Products that operate in more competitive industries. The valence and volume effect is lower for industries with many competitors. Increased competition results in choice overload, which leads consumers to rely less on WOM valence and volume.
So, when does negative publicity increases sales?
Negative exposure can increase sales in those cases where a brand can benefit from the increased awareness of WOM volume without being impacted by the negative valence. This is the case for brands with already a high reputation, strong enough to contrast the negative valence. For example, a less-known book by a highly reputable author can have an increase in sales when the book receives a negative review by the New York Times. In this case, the negative review of the New York Times will increase the curiosity of the readers, and the reputation of the author will mitigate the valence of the review. An important caveat is that this will not work if the book already has high awareness.
Interestingly, there is an effect of the period between the moment consumers receive the information and the moment of purchase. While both the effect of awareness and valence will fade over time, valence fades more rapidly than valence. This means that negative exposure shows its positive effects after some time. Consumers will remember the name of the product/brand, but they will forget whether the information received was positive or negative. In this situation, consumers will prefer the product that they know, just because they are familiar with the purchase option.
Implications for marketers:
- Generally, just positive publicity is good publicity. Minimizing negative WOM with traditional marketing techniques is still the most effective way to maintain sales high.
- For some products, negative publicity/WOM does not have a big impact. These are the cases where the product is highly triable, the product has public consumption, and it is produced in more competitive industries.
- The only case: high brand reputation and low awareness. You need a perfect storm for negative publicity to increase sales. This is when:
- The negative valence is compensated by the high reputation of the brand.
- The product can benefit from more awareness.
It is not easy to find this specific situation in the marketplace, therefore brands should generally avoid “any publicity” and seek just positive publicity.
- Negative publicity is never more effective than positive publicity. Despite much research has been done over time, there is no evidence of situations where negative publicity is more effective than positive publicity in increasing sales. Even in the most extreme situations, negative publicity is just as effective as negative publicity. Would you imagine a product that has higher sales the more negative is its WOM? This finding alone would be enough to recommend brands not to pursue a strategy involving an increase of negative WOM.
Take home message
Is any publicity good publicity? Answer: No. There are very few situations where the valence of publicity doesn’t matter. These are the situation where the brand has a high reputation, and the product is less known. For the other cases, negative publicity or negative WOM always hurt the brand.
Monthly Consumer Discoveries is a Monthly newsletter that brings you the most interesting updates in consumer behavior research.
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Sources
Berger, J., Sorensen, A. T., & Rasmussen, S. J. (2010). Positive effects of negative publicity: When negative reviews increase sales. Marketing Science, 29(5), 815-827.
Babić Rosario, A., Sotgiu, F., De Valck, K., & Bijmolt, T. H. (2016). The effect of electronic word of mouth on sales: A meta-analytic review of platform, product, and metric factors. Journal of Marketing Research, 53(3), 297-318.
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