Bad ads and why they work

Every time a brand releases an ad campaign that makes the public cringe, tonnes of things happen; agencies get changed, people get fired and PR companies get into action. But somehow, the numbers that companies worry most about, sales and profits, don’t often get affected even if there’s a public outrage against a brand’s commercial. Sexist, racist and classist ads - none of those seem to affect sales. We analyse five ads that should have hurt the sentiments of the consuming public enough to reflect a dip in sales, but didn’t.

Brand: Pepsi

Date of release:April 2017

Commercial: Kendall Jenner protest

Why it was problematic:Ridiculed protest movements by suggesting that a white model and a Pepsi bottle could ease tension during a protest.

Public reaction: There was widespread outrage, specially on social media. The company finally issued an apology and pulled out the ad. The statement read: "Clearly, we missed the mark, and we apologise. We did not intend to make light of any serious issue. We are pulling the content and halting any further rollout. We also apologise for putting Kendall Jenner in this position."

What happened to sales? Worldwide, PepsiCo saw a 41.6 percent increase in quarterly profit. As per a CNBC report, the company recorded a revenue of $12.05 billion, making it the second quarter to see an increase in revenue after eight consecutive quarters of decline.

Possible explanation: The ad was pulled off the air a day after it debuted. So even though on social media, it became a big deal, the noise around it died down after the newspapers stopped reporting the incident. Also, 45% of PepsiCo’s revenue comes from “guilt-free” products. These are products that have lesser than 70 calories per 340 grams and snacks that have small amounts of salt and saturated fats. Consumers of these products are less likely to change loyalty or find replacements quickly and thus continued to consume Pepsi products.

Brand: Starbucks

Release: March 2015

Why it was problematic: The company released a full page ad in the New York Times and encouraged its baristas to write “ Race Together” on its cups as a response to the the killings of Michael Brown and Eric Garner - two black men, killed by white police officers in the US. The move was seen to be superficial and consumers expressed contempt for the brand and CEO of the company, Howard Schultz.

Public reaction: 24 hours after the campaign released, the campaign was trending for the wrong reasons on Twitter. A week later, the campaign was pulled out. The company was criticized for trying to profit from a hot-button topic especially when its own management team was seen to have a lack of diversity.

Some accused the company of trying to profit from a hot-button topic, while others said being ambushed with a discussion on race while getting their morning coffee was not something they had willingly signed up for.

What happened to sales?
On April 23, the company released its earnings report that showcased an increase in both revenue and operating income, 18% and 21% respectively. The Wall Street Journal reported that, “There was no indication that the move to wade into the complex and divisive issue [of race relations] hurt sales.” Looks like customers didn’t stop drinking their coffee, even if they didn’t like what was written on the cup.

Possible explanation:
Starbucks has always involved itself in community issues that it thinks are important and affect the public’s opinion of the company. That year it also announced that by 2018 it would hire 10,000 military veterans and their spouses. It also runs a “College Achievement” initiative that will reportedly cost the company in excess of $250 million over the next ten years.

“Race together” was also an attempt to do something meaningful. And despite all the negative attention it got the company believes the showed signs of long term value. As per the company, a quarter of the brand’s identity is formed not by the quality of its coffee or the experience customers have but what consumers believe the institution stands for. The management believe that even though consumers may have disliked the campaign online, they believe that it was bad execution of a good idea and Starbucks has its heart in the right place. That quarter, both revenue and operating income increased, it looks like customers didn’t stop drinking their coffee, even if they didn’t like what was written on the cup.

Brand: Lodha’s

Commercial: Don’t live with the crowds

Date of release:June 2016
Why it was problematic: Blatantly classist. The body copy said, "You worked your way up to rise above the crowds. Not live with them."

Public reaction: A few angry tweets and a piece by FirstPost calling the brand classist and divisive.

What happened to sales? As per a Mint report, the company recorded Rs.2,350 crore in sales just from residential projects in the April-June quarter. And apparently, premium properties contributed to that number a great deal.

Possible explanation: As terrible as this may sound, the copy probably worked for potential buyers. They probably looked out of their windows, desired a better slum-free view of the city and gave the Lodha sales office a call. Even though this ad was on the front page of the Times of India, it didn’t go viral on the internet.

Brand: Bata

Commercial: Comfortable with it

Release:May 2017

Why it was problematic: Said that women should be happy to be women because they can wear make-up and cry in public. Also had a shot of an Indian woman offering flowers to a white policeman. Hmm. Inspired by Pepsi?

Public reaction: Some publications called it regressive but there was no massive social media outrage. The ad didn't get pulled down

What happened to sales? While sales for May 2017 are not available yet, the stock price had gone up on the BSE. Here’s a snapshot visa a vis the current share prices on the BSE.

Possible explanation: We’re not sure what the media budget for TV was for this commercial but it doesn’t look like too many people saw the commercial on YouTube. It was 12,406 views when we last checked. So in this case, the brand probably got saved because the ad just didn’t get picked up by the internet for a conversation.

Brand: Samsung S8

Commercial Sibling Rivalry

Release: May, 2017

Why it was problematic: Shamed individuals who had phones with limited features.

Public reaction: No social media outrage over the commercial

What happened to sales? 5mn plus sales around the globe in a month. In fact, the phone won the ‘Best Smartphone’ title at 2017 Asia Mobile Awards

Possible explanation: Consumers have internalized upgrading everything they use, If they see that there’s something better around. We now consume products so mindlessly that repairing items, or using something that’s old is looked down upon. Also, comparing what we own to our friends and siblings is considered normal. Most people who saw this ad probably didn’t even think that one sibling was being shamed for owning a phone with fewer features.