New report ranks brand controversies by the amount of consumer damage

Consumers are OK with brands that make political statements -- just don't lie to them

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It's not the crime, it's the cover up. This old saying, most often associated with political scandals, applies to branding, too, according to a new report.

Consumers are far more likely to punish companies for lying than anything else, according to the report by research company Morning Consult that examines how a range of brand controversies affect consumer opinion. The worst offense is lying to customers in order to increase profits, with 71 percent of respondents saying they would feel much less favorable about a company doing that, according to the report.

But outspoken CEOs can breathe a sigh of relief: The report finds that only 15 percent of consumers would hold it against a company if their CEO "said something rude about people who share your political beliefs."

"For all the talk about the centrality of politics in modern consumerism, our survey research work has consistently found these issues remain secondary for the average consumer," Morning Consult VP Jeff Cartwright states in the report.

Other offenses that rank high in terms of consumer backlash include falsifying accounting records (68 percent); lying about how products work (65 percent); and covering up an ethics scandal (63 percent).

The report is based on a scientific survey of 2,201 consumers conducted online in October.

When it comes to brand controversies, Cartwright cautions brands to not read too much into social media reaction. "Twitter outrage does not translate to a real change in consumer perceptions." he states in the report. "It is brand management malpractice to not invest in more robust analytics."

He points to the social media outrage that Fiat-Chrysler-owned Ram drew with its 2018 Super Bowl ad that used audio of a Martin Luther King Jr. speech along with shots of the Ram 1500 truck. The ad drew an immediate rebuke on Twitter from people accusing Ram of appropriating the civil rights legend to sell pickup trucks. "If you read the news or looked at social media, it would be reasonable to assume Ram's brand was in free fall," Cartwright states in the report. But Morning Consult, which tested the ad with consumers, found that "a sturdy plurality of consumers liked it" and "African-Americans liked it best," according to Cartwright.

As part of the new report, Morning Consult took a look at some other recent brand controversies. Below, a snapshot:

Uber

The problem: The ride-hailing brand's troubles started with the "#DeleteUber" movement that began in January 2017 when Uber was accused of trying to capitalize on a New York City taxi cab driver boycott. Uber continued operating while taxi drivers refused to pick up passengers at John F. Kennedy International Airport as a way of protesting President Trump's refugee ban. Things got worse for Uber in June of 2017 when co-founder Travis Kalanick departed amid negative publicity stemming from allegations of sexual harassment and gender discrimination at the company.

Fallout: Uber's net favorability rating dropped from +27 at the beginning of 2017 to +20 by the final quarter of the year, according to Morning Consult. But the company appears to have mostly recovered. Its rating stood at +26 in October of this year. Still, there are lingering effects: Since January of 2017, competitor Lyft has "frequently outpaced Uber in terms of net favorability," according to Morning Consult.

NFL/National Anthem

The problem: President Trump in September 2017 called on National Football League owners to fire players who kneel during the National Anthem to protest social inequities. His statement gave more attention to a polarizing issue that splits NFL fans in half.

Fallout: The league's net favorability rating fell by 30 points in one month in late 2017, led by dissatisfaction from Trump voters. The issue barely registered with Clinton voters. But the anthem debate still resonates today: The league's net favorability stood at +20 in August 2018, down from +41 a year earlier, before the anthem issue gained steam. Of course, the NFL's TV ratings this season have not suffered. At the season's halfway point, the leagues TV numbers were flat-to-slightly-up, Ad Age recently reported.

Chipotle

The problem: The Mexican food chain drew negative headlines in July 2017 after 135 people got sick from norovirus after eating at a Chipotle in Virginia.

Fallout: Chipotle's favorability rating fell from +32 before the norovirus outbreak to +24 the month after the news hit. The rating remained stuck at +25 in the three months ending in October 2018, but Morning Consult points out that the "it is not clear" if the rating is "directly attributable to the norovirus story.

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