If I had a hundred bucks for every client that had told me “there is no such thing as bad publicity” I’d be a rich man. I’ve never really bought the argument – although one shouldn’t confuse a igniting controversy with a catastrophic and negative event.
Studies suggest it all comes down to your prominence. Alan Sorensen, a economics professor at Stanford University School of Business looked at the effect of book reviews in the New York Times (study published in Marketing Science). Positive reviews by well known authors sold 42% more while negative reviews caused sales to drop by 15%.
It was a different story for unknown authors. Bad or good, a review bumped sales by a third. Can we apply the same idea to business. Say to a relatively obscure company? I’d argue it all depends on the product. Say you make an expensive lock to protect a racing bike – a bad review for a product that to which low subjectivity applies will crater sales. That’s different to, say, a low-cost book or MP3 file to which there is a simple purchasing cycle, low monetary value and high subjectivity.
And inquisitiveness resulting from a poor review shouldn’t been seen as a proxy for buying. The argument that Borat caused tourism enquiries to increase as proof of the positive effect of a negative review only holds water if the only measure was increased enquiries. It didn’t actually mean any more people visited.
At the end of the day good press matters as much as positive recommendations. And, while a negative review might be ok for the obscure, for anything of value (product or personal brand) it can be a killer.