3 advertising failures that left millionaire losses

These brands were in the spotlight for unleashing controversy with their advertisements, but did this affect the performance of the companies?

Earlier this year the famous Swedish clothing brand H&M sparked controversy on social networks due to an ad on its website, which featured a black children's model wearing a sweatshirt with the words "the coolest monkey in the jungle". The reaction of the users was immediate, and the brand was accused of being racist. Days later, the news appeared in various media and H&M issued a statement apologizing for what happened. "This image has been removed from all H&M channels and we apologize to anyone who has been offended," said H&M spokeswoman for the UK, Anna Eriksson.

Leer en español: 3 fracasos publicitarios que dejaron pérdidas millonarias

In April 2017, a Pepsi commercial was accused of being "offensive" and "insensitive". In the advertising, model Kendall Jenner leaves a photo session to join a street protest, puts herself at the head of the march and offers a Pepsi to an agent, making it possible to avoid a confrontation between the protesters and the police. The critics affirm that the images used in the commercial, allude directly to the racial protests that have been lived in the US, and that trivializes these demonstrations by using the motive of social justice movements to sell their product.

Also read: Do you know which are the 4 brands that have supported social causes?

Likewise, the famous beauty brand Dove generated great controversy by a three-second video on their Facebook page, in which a black woman takes off her shirt and becomes a white woman. The users pointed out the presumed racist connotation of the commercial and, the next day the brand eliminated it.

How were these companies affected after the controversy generated by the advertisements?

In  H&M's case, there were protests outside some stores in South Africa and artists like The Weeknd and G-Eazy cut ties with the clothing brand stating that they would not collaborate in their advertising campaigns.

The financial consequences were not long in coming, the prices of shares fell 40% that month and the brand had its first decrease in sales since 1974, with a 4% drop in sales in the fourth quarter of 2017. Weeks after, the brand also announced that it would close 170 stores around the world, although there were no statements about whether the success of the publicity controversy was linked to that decision.

A week after the Pepsi commercial came out, the percentage of adults who considered buying the product when consuming a soft drink decreased, according to Ted Marzilli, CEO and analyst at Data Products, who said that 28% of adults who considered buying Pepsi before the commercial was issued, decreased to 20% after it was issued.

However, despite the bad reviews, Pepsi eventually made good profits. PepsiCo reported that its revenues increased 2%, that is, it obtained a net income of $ 2.1 billion for the second quarter of 2017. The company's shares also increased 0.3% to $ 113.93

Regarding Dove, despite a large number of criticisms by social networks that included hashtags such as #DoveMustFall and #DoneWithDove, the brand has continued to stand out for its strong advertising work focused on the diversity and self-esteem of women and suffered no subsequent consequences regarding the loyalty of the clients.

However, in July of this year the company Unilever, which is part of the Dove brand, said that sales of products fell by 0.6% in the United States and some European countries, although there is no certainty that the cause has been directly related to the advertising controversy.

LatinAmerican Post | María Fernanda Barinas Ortiz

Translated from: ' 3 fracasos publicitarios que dejaron pérdidas millonarias'

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