Some companies go out of their way to court controversy, while others, like General Mills, Inc. (NYSE:GIS), seem to unwittingly be thrust into the middle of it — though its stock will surely benefit nonetheless.
Hmm. News outlets, commentators, and even I here at The Motley Fool are talking about the ad. Maybe the cereal maker wasn’t so “unwittingly” thrust into the spotlight after all.
As Oscar Wilde once noted, “The only thing worse than being talked about is not being talked about,” which is why some companies have created a cottage industry in controversial advertising. NIKE, Inc. (NYSE:NKE)‘s recent ads featuring Tiger Woods had the wags talking about the company for a hot minute, simply underscoring the belief that any publicity is good publicity.
Other companies, however, get that deer-in-the-headlights look when their celebrity endorsers generate controversy. Reebok was caught flat-footed when its sneaker ambassador, thug rapper Rick Ross, extolled the virtues of date rape. PepsiCo, Inc. (NYSE:PEP), which similarly sought to establish “street cred” by partnering with the hip-hop community, just pulled a Mountain Dew ad after one of its rap endorsers depicted racial stereotypes and made light of violence against women, while last month it severed ties to rapper Lil Wayne after he disparaged a civil-rights icon in one of his song’s lyrics. His rap sheet for being a crack cocaine dealer was apparently no biggie.
But at other times, the brouhahas seem manufactured — not so much on the part of the companies creating the content, but from those expressing the outrage. Toymaker Hasbro, Inc. (NASDAQ:HAS) recently came under scrutiny for a kids cartoon added to its Hub TV channel. Called SheZow, it features a little boy who uses a magic ring to turn into a superhero after shouting, “You go, girl!” Or rather, he turns into a superheroine. The he becomes a crime-fighting she and in the process generated criticism that Hasbro, Inc. (NASDAQ:HAS) was trying to force transgender lifestyles on impressionable kids.
Really?
In reality, it’s somewhat surprising in this day and age when we’ve elected a biracial president that the Cheerios ad was even considered controversial to begin with. A mixed-race couple just doesn’t seem all that contentious, though obviously racism is still alive and well.
Still, understanding the old maxim that “any publicity is good publicity,” General Mills, Inc. (NYSE:GIS) will probably benefit because, despite the hateful views of some, it will be seen by a larger audience as a forward-thinking company. It gained tens of millions of dollars in free advertising both for its product and its company’s values, and while some may not be able to stomach such corporate positions, its stock should be able to give a hearty “Cheerio!” as it gathers greater goodwill.
Retail rulers
The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they’ll handsomely reward those investors who understand the landscape.
The article General Mills Stock Gives a “Cheerio” Welcome to Controversy originally appeared on Fool.com.
Fool contributor Rich Duprey owns shares of Nike. The Motley Fool recommends and owns shares of Hasbro, Nike, and PepsiCo.
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