Is there such a thing as bad publicity?
Donald Trump’s campaign appears to be a test case in whether this old adage is true or not. His business interests are intricately linked to the Trump brand, which has been taking a hit as a result of his more extreme statements and proposals on the campaign trail.
At least in terms of political support, his comments have appeared only to improve his numbers. He’s dominated the polls since July, and repeated predictions that the latest remark would send his numbers tanking have all been wrong.
But how long can Trump continue to alienate and disparage various groups without harming his own brand and broader business deals?
‘Not sending their best’
It all started with Trump’s announcement speech in June when he declared:
When Mexico sends its people, they’re not sending their best… They’re sending people that have lots of problems, and they’re bringing those problems with us. They’re bringing drugs. They’re bringing crime. They’re rapists. And some, I assume, are good people.
Based on my many years of working with a wide variety of companies and other organizations, it is clear to me that the values of brands and reputations are closely linked to success. Trump is an American brand, and, if his current campaign rhetoric continues, there could be significant damage to his business.
The fallout so far
So far, the fallout has arguably been minimal. His comments, however, are beginning to prove costly, and the damage may become significant.
We’ve heard reports from Reuters and other sources that billboards with his name and image have been taken down in Dubai as a result of his anti-Muslim comments, although some signage has returned as business partners go to great lengths to distinguish Trump’s business dealings from his political comments.
The U.K.’s Independent newspaper reported that the Landmark Group announced that its Lifestyle stores throughout the Middle East would stop selling Trump home décor merchandise.
In Europe, the impact has so far been to his house personal reputation. The U.K. Parliament this week spent an hour discussing whether to ban the mogul from entering the country after a petition asking that he be barred entry because of “hate speech” over Muslims received half a million signatures – well over the 100,000 necessary to require the issue be debated.
But the impact has also been felt in the U.S. Macy’s in June stopped carrying Trump-branded merchandise; NBC and Univision announced they would not air Trump’s Miss USA Pageant; and NASCAR decided not to hold its end-of-season awards banquet at a Trump resort.
And back in Trump’s hometown, Bill DeBlasio, the mayor of New York City, said that he would go out of his way to avoid future business deals with Trump—after he found he could not legally cancel current contracts.
Waiting out the storm
As for Trump’s partners and other associations affiliated with Trump, most of them are taking the “no comment” route when asked about the presidential candidate, preferring to wait out the storm.
After all, if he doesn’t succeed, will anyone really remember all of this in a few years? Think about how Sarah Palin’s comments during her run for vice president, while admittedly mild compared with Trump’s, are now a distant memory—and this week, she endorsed Trump for president. On the other hand, if Trump does succeed, keeping those business ties may prove valuable.
The biggest risk for Trump is that more people and groups (that don’t support him) will choose not to book his hotels, lease/buy his condos, play on his golf courses or vacation at his resorts. There’s talk of boycotts, but so far the effects are difficult to measure.
Some stars boycotted Trump’s Toronto Hotel during last fall’s Toronto International Film Festival. Jay Sorensen, the president of the travel consultancy IdeaWorks, has vowed to boycott Trump properties and is asking for colleagues to do the same.
But how many more anti-Latino or anti-Muslim comments will consumers tolerate before calls for boycotts take on momentum?
It’s hard to predict how this will play out—and a lot of it depends on whether Trump’s rhetoric continues—but it is likely that all of the negative publicity he generates will start to have a greater impact on his business.
What the research shows
We’ve seen it happen before with other public figures closely associated with a brand.
Remember when celebrity chef Paula Deen was in the news for making a racist comment? As noted in the Huffington Post, her business suffered and it doesn’t seem like she’s quite back on track.
The BAV Consulting division of the advertising and marketing firm Young & Rubicam found that consumers who could afford to play golf at one of Trump’s clubs, stay at his hotels or buy a condo in one of his developments have lost confidence in the Trump brand since he began his presidential campaign.
Clearly his image has suffered, similar to what we have witnessed with Volkswagen or other corporate scandals. The difference with the Trump brand is that it is his personality that is being measured.
In Trump’s favor is the complex nature of his real estate deals and the way he licenses his brand. It’s one thing not to buy a Trump lamp at a department store, but another to avoid purchasing a condo based on an individual.
Also in his favor is the long-term nature of many of his business deals. If those deals are legally locked up for a certain number of years (like the NYC contracts), it’s unlikely that his statements will have much of a business effect. However, if the deals can be severed, other organizations may follow the lead of NBC, Macy’s, Univision, NYC and the Landmark Group.
It will be interesting to see if Trump starts reining in his comments, or if his rhetoric continues to alienate people. If the latter happens, he’ll eventually hit a tipping point—and the risk to his business may not seem so minimal anymore.