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Can negative information about a product increase sales, and if so, when? Although popular wisdom suggests that “any publicity is good publicity,” prior research has demonstrated only downsides to negative press. Negative reviews or word of mouth, for example, have been found to hurt product evaluation and sales. Using a combination of econometric analysis and experimental methods, we unify these perspectives to delineate contexts under which negative publicity about a product will have positive versus negative effects. Specifically, we argue that negative publicity can increase purchase likelihood and sales by increasing product awareness. Consequently, negative publicity should have differential effects on established versus unknown products. Three studies support this perspective. Whereas a negative review in the New York Times hurt sales of books by well-known authors, for example, it increased sales of books that had lower prior awareness. The studies further underscore the importance of a gap between publicity and purchase occasion and the mediating role of increased awareness in these effects.
Berger et al. (Thu,) studied this question.