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Anatomy of a social media meltdown: A quantitative look at the recent Adecco crisis management fail. What can you do to help ensure your brand doesn't wind up a "what not to do" case study? Read on.
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What you fail to account for is that there is another chart that should be considered: brand recognition. They can recover from this temporary "meltdown" but the public backlash has actually garnered them a lot of media attention they would have never otherwise had. People who have never heard of Adecco now know them, and as long as they adequately recover, they actually benefitted from their little "debacle"... not to say that this is the way to go about social media in your business, but the old adage "there's no such thing as bad publicity" applies equally here.
I hear what you're saying, and if the publicity is 'sort of bad,' that may hold true. But when it's this bad, and it drives straight to the heart of your own customer base, there is definitely such a thing as bad publicity. Especially for Adecco - many of the people they employ are active in social media. If they can choose between Adecco, Manpower, etc. in a strengthening economy, this may have them putting Adecco at the bottom of the list.

Only time will tell, of course. But plenty of companies with low brand recognition got the wrong kind of recognition later on. I know at least one (who I won't name) that launched a great new product to tons of fanfare, and then only shipped 1000 of them. They NEVER recovered, and they had tons of GOOD publicity.

Also, think about companies that get tons of bad reviews. Is that good publicity? No. They spend tons on trying to get rid of those reviews.

Finally, look at politics. Name recognition is the #1 factor in getting elected to local and state offices. But negative exposure will bury a candidate for one or more elections.

Bad publicity is definitely bad.
I can see your point, particularly in the case where the specific target audience is a highly train/educated industry specific sector. And as much as I fundamentally want to believe that you are punished for bad publicity, I could site counter examples ad nauseam. The sad reality I'm starting to come to terms is that bad publicity may be bad now, but over the long term it almost always turns out to be good... especially in the political arena. Most notably Weiner and Spitzer have both come out ahead from their scandal as household names, and leveraging that notoriety as political capital. My current working theory is that if you are unable to emerge from your bad publicity, then you just don't have the right publicist. :-\
Yep, there are definitely examples on each side. However, I think Weiner would've been far, far further ahead in his career w/o his little photo frenzy. Surviving the bad publicity isn't the same as benefiting from it.

But this is also part art, part science. So what you're talking about is totally plausible. I just wouldn't want to bet on it.
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