By Brian Ward, Special Correspondent—Impressions are good, right? They get your brand out there, raise awareness, show that people are interested in you.
Not so fast. By the same logic the Titanic, the Hindenburg, and Charlie Sheen did pretty well. A lot of impressions on social media is only a good thing if they have positive sentiment overall. Bad news can generate lots of impressions, but bad news is, well, not good.
So don’t be so quick to welcome those impressions. Plenty of companies have generated a lot of impressions but lost revenue in doing so. Here are some recent examples.
#1: Carnival Cruises
Event: The Costa Concordia cruise ship ran aground.
Social media reaction: There was a huge public outcry over the handling of this shipwreck, particularly over the behavior of the ship’s captain. The famous phone call between the captain and the local harbor master alone resulted in a Twitter storm and a t-shirt—“Get back on board!” The company stopped posting on their social media accounts six days after the wreck. Five days later they started posting again, saying the crisis was over, only to discover public sentiment for them had decreased while they were gone.
Results: The company lost $139 million in the first quarter after the crash. The number of bookings went down industry-wide shortly after the crash, but later bounced back.
#2. Tesco
Event: Horse meat was found in the company’s food products.
Social media reaction: People were not happy when it came to light that four Tesco products contained horse DNA. What was already a bad PR situation was only made worse after the company sent out this prescheduled tweet:
“It’s sleepy time so we’re off to hit the hay! See you at 8am for more #TescoTweets.”
That tweet went out to Tesco’s 47,000 followers, already miffed about being served bits of horse, and promptly went viral. The company, apparently true to their word and fast asleep, didn’t respond until the next day.
Results: The tweet and scandal happened in early January 0f 2013. In June Tesco stated its sales had dropped 1% and stock had dropped by 5% as a result of the scandal. At the same time sales had fallen in nine of its 11 global markets, including Turkey, the UK, and China.
#3. Susan G. Komen
Event: The breast-cancer-battling nonprofit eliminated $680,000 in grants to Planned Parenthood for breast cancer screenings and education.
Social media reaction: People used social media to protest on Planned Parenthood’s behalf, with Planned Parenthood gaining 10,000 new Facebook followers in three days. People created several anti-Komen Facebook pages, such as “De-fund the Komen Foundation,” which currently has almost 17,000 followers. There were 1.3 million tweets about the story in the same three-day period, which eventually got the attention of the mainstream media. The foundation quickly re-instated its Planned Parenthood funding but that didn’t stop the outcry.
Results: The Komen Foundation stated it had lost $146 million in revenue during 2013, a 26% loss. Several of the foundation’s events saw a decrease in participants, with 19% fewer participants signing up for its Race for the Cure.
#4. Lululemon
Event: When confronted with clothing quality issues, company founder Chip Wilson replied that the problem was with the bodies of women.
Social media reaction: There were two problems that women had with the yoga pants they bought from Lululemon. The first complaint was that the pants were too sheer, a solid issue for pants that cost $72-$98 a pair. Customers protested by posting pictures on the Lululemon Facebook page so everyone could see the poor quality of the fabric. The second problem was that the expensive clothing would pill after a few wearings. Again, customers went online with photos and angry posts about their purchases. Which would be bad enough, except Lululemon founder Chip Wilson then said:
“Frankly, some women’s bodies just actually don’t work for [wearing Lululemon pants]… it’s really about the rubbing through the thighs, how much pressure is there over a period of time, how much they use it.”
The resulting Twitter storm denounced Wilson and the brand as blaming their customers for not having perfect bodies.
Results: After the sheer pants issue came up in March of 2013, Lululemon recalled 17% of its pants and lost $67 million in sales. The company’s stock is currently worth less than half of what it was a year ago.
#5. Malaysia Air
Event: One passenger jet was lost and 4 months later another was shot down.
Social media reaction: For Flight 370, which went missing and has still not been found, the misinformation and stonewalling of the Malaysian government drew the ire of foreign governments and reporters alike. In the end the Malaysian government’s tactics only resulted in more interest in the missing plane, as well as numerous conspiracy theories. The government’s handling of the situation was not the fault of Malaysia Air, but it kept the company’s disaster in the public eye.
No sooner had flight 370 left the headlines that Flight MH17 was shot down over Ukraine, killing all passengers. Within hours people around the world started posting and sharing photos of the wreck and the victims. People demanded to know why Malaysia Air had been flying over a combat zone. Worse, one passenger aboard MH17 had tweeted a picture of the plane before it left, with the caption:
“If the plane disappears, this is what it looks like.”
What was meant to be a joke went viral after it stopped being funny.
Results: Malaysia Air was in financial trouble before these tragedies. The day after MH17 was destroyed the company’s stock dropped by 18%, bringing the total drop to 35% since the start of the year. Many speculate that the airline may go out of business or have to do some serious rebranding to survive. ∞
