For lesser-known or new authors, bad publicity may actually be good news. According to a recent study co-authored by Stanford Graduate School of Business professor Alan Sorenson and Wharton Business School professor Jonah Berger, B.A. ’02, Ph.D. ’07, bad reviews can dramatically boost sales.
Earlier studies showed how publicity through product reviews can affect sales. The researchers found out that giving books bad reviews could lead customers to assume the book was bad, thereby significantly reducing sales. However, because negative information usually cuts down the number of product reviews, consumer opinions alone cannot explain why bad publicity may actually increase product sales.
“Any publicity is not always good publicity, as the old adage goes,” Berger wrote in an e-mail to The Daily. “But there were also cases where even negative publicity seemed to help sales, so it was interesting to think about when it helps versus hurts.”
The overall study consisted of three mini-studies. The first study involved the examination of a 2001-2003 dataset of weekly national sales for 244 fiction titles reviewed by The New York Times. By measuring the size of sale spikes in the week following the release of each book review, the study showed two main points: positive publicity benefited all titles and the bad publicity only helped lesser-known and obscure authors.
According to GSB professor Baba Shiv, familiarity with a product plays a crucial role when a consumer makes decision.
“The more familiar something is, the bigger a chance it will be incorporated into the [customer’s] decision,” Shiv said.
The familiarity has an impact on all brands and products. Bad publicity, while damaging to well-known products, provides lesser-known products with more consumer exposure. These two processes often work against one another behind the scenes during the decision-making process.
“Familiarity, by itself, is a positive emotion,” Shiv said. “On the other hand, you’ll have negative emotion associated with bad publicity.”
“Let’s say you’ve got bad publicity or bad press on one of your new brands,” Shiv said. “On one hand, it’s making your brand look familiar, which is associated with positive emotion and at the same time, it’s eliciting negative emotion towards the brand, which comes from the bad publicity.”
Whichever wins out in the consumer’s mind depends on the “decay rates” of these two emotions, a phenomenon that the second study investigated. The decay rate is the rate at which the impact of an emotion, positive or negative, disappears.
The second study looked at the effects bad publicity had in well-known and obscure books over time. Some subjects looked at glowing and negative reviews for a well-known book by John Grisham and reviews for an obscure, made-up title.
Subjects who read negative reviews of well-known books were less likely to buy the book. Negative reviews of unknown books, however, did not affect whether or not the subject was likely to purchase it.
“What is going on here,” Shiv said, “is that the positive emotion is coming from familiarity, which is a much stronger positive emotion, while the negative emotion is already gone.”
“In the case of a well-known brand, the familiarity is already there,” he said.
Shiv explained that “the decay rate of negative emotion will be much slower” for these brands, whereas negative publicity “generates much more negative feelings.”