Brands take out ‘disgrace’ cover
by Nader Khosrovani on Jan 14, 2011
One of the most curious articles I have read this year has been reported by Marketing Magazine. They say that brands are taking out extra ‘disgrace cover’ to make sure they are insured against the cost of celebrities they sponsor doing naughty things… a little like Tiger Woods (a married man) sleeping with other women. In that way, you might say it’s a little like a divorce settlement.
Anyhow, the policy insures brands against the costs of a campaign relaunch. However, much like a divorce settlement, whilst money might be an immediate gain, the long term emotional and reputational damage is far more costly and takes a much longer time to heal.
Indeed some brands, like Dasani in the UK, have never recovered from failing to live up to their promise and representing a false image to consumers.
In my humble opinion, I think the best answer in every case is honesty. It’s as true to life as it is to branding and in our digitally enabled world, the brands that take advantage of being open, honest, collaborative and look to establish meaningful dialogue are the ones that will win.