The law of unintended consequences is a very important concept that has been studied, discussed and utilized in various social sciences. Basically, the law states that calculated interventions in a complex environment may lead to unexpected outcomes. A famous example is French theorist Frederic Bastiat’s broken window fallacy, in which Bastiat shows how the law of unintended consequences and opportunity costs results in unforeseen economic outcomes.

In the case of Lowe’s and Kayak, both companies made advertising decisions that they believed would shield them from further controversy. However, these choices actually resulted in consequences that were the complete opposite of what they intended. 

Lowe’s and Kayak ran advertisements on a new TLC show called All-American Muslim, which chronicles the lives of five Lebanese-American families. The show’s focus on the impact of these families’ Islamic faith on their lives in American society caught the ire of a group called the Florida Family Association. The organization believed that the show’s content presented a distorted picture of American Muslims, resulting in what the Florida Family Association believed to be dangerous propaganda conducive to the spread of Islamic extremism. The group urged its members to send emails to the show’s sponsors in order to pressure these advertisers to pull their support from the show. Shortly after the email campaign, a number of advertisers pulled or discontinued advertising on the show, including Lowe’s and Kayak.

On December 6, The Florida Family Association posted an email from Lowe’s stating that the company pulled its advertising from All-American Muslim. A few days later, negative reactions to the company’s decision began to pour in.

Lowe's Perception Media Value for November 1 to December 16, 2011

Hip-hop magnate and Global Grind founder Russell Simmons

While Lowe’s generated steady and positive Perception Media Value during the time they ran advertisements on All-American Muslim (which premiered  on November 13), the company lost nearly three times as much Media Value in a week’s span after news spread about its decision. Most of the negative Perception Media Value came from Social Media and Twitter as angry customers called for a boycott of Lowe’s in Social Media channels. Celebrities such as hip-hop magnate and Global Grind founder Russell Simmons and actor Kal Penn defended All-American Muslim and criticized Lowe’s for its decision. Simmons offered to buy ad space on the TLC show and expressed disgust over the situation in comments to Entertainment Weekly.

This can’t happen in America; [Lowe's] needs to fix this immediately. They can’t get away with that, it’s ridiculous. There are American principles at stake here.

Lowe’s defended its decision to remove its advertising from All-American Muslim, explaining that it wanted to avoid controversial programming.

Individuals and groups have strong political and societal views on this topic, and this program became a lightning rod for many of those views. As a result, we did pull our advertising on this program. We believe it is best to respectfully defer to communities, individuals and groups to discuss and consider such issues of importance.

As Lowe’s began to be slammed, Kayak announced that it would discontinue its advertising during All-American Muslim. As the company began to receive backlash similar to that of Lowe’s, Kayak’s CMO quickly offered an apology for the company’s handling of the situation.

I should have communicated more clearly. We would not want anyone to think that we caved to hatred. I wish I could share some of the emails I’ve received from our team. They are also very unhappy with how I handled this.

Kayak’s response helped to lessen the PR blow from its decision, but the company’s Sentiment dipped sharply. The chart below compares Kayak and Lowe’s Sentiment to 3M and GEICO, current advertisers on All-American Muslim recently targeted by the Florida Family Association.

Sentiment Comparison of 3M, GEICO, Kayak and Lowe's for November 1 to December 16, 2011

The four companies had similar Sentiment trends throughout November, but Sentiment for Kayak and Lowe’s dipped sharply below 3M and GEICO after the controversy began. In fact, Sentiment for 3M and GEICO increased in December, though that was not related to its advertising support for All-American Muslim.

Negativity towards Lowe’s and Kayak hurt their perception significantly on Twitter.

Kayak and Lowe’s received more negative mentions than positive on Twitter, while current All-American Muslim advertisers 3M and GEICO generated a significantly higher positive percentage of Twitter mentions.

The negative outcome proved to be the polar opposite of what Kayak and Lowe’s executives envisioned when they were making their decision to cancel advertising for All-American Muslim. In their statements, both companies cited the need to avoid a ‘lightning rod’ of controversy. Kayak’s CMO elaborated,

The first thing I discovered was that TLC was not upfront with us about the nature of this show. As I said, it’s a worthy topic, but any reasonable person would know that this topic is a particular lightning rod.

This echoed the view of Lowe’s on the matter.

As you know, the TLC program All-American Muslim has become a lightning rod for people to voice complaints from a variety of perspectives – political, social and otherwise.

The Florida Family Association called for companies to pull advertising support from All-American Muslim

But if you look at the Sentiment and Perception Media Value charts, the show was not a prominent vehicle for controversy until after Lowe’s and Kayak announced publicly that they would be ending their support. People felt good about Lowe’s and Kayak throughout November even as they advertised on a show that was supposedly a “lightning rod” for trouble. These companies made a calculated and preemptive decision in order to avoid controversy about a sensitive issue but ended up receiving the worst of it. In reality, those who expressed concerns about All-American Muslim constituted a small minority of the population, which held little influence.

Aside from any ethical debate, Lowe’s and Kayak made a bad decision to publicly address the situation, overreacting to something that was not hurting their brands. Even if these companies wanted to take their advertising dollars elsewhere, they could have let their contract with TLC expire quietly like many other companies did. Instead, they appeared to take a particular side of a sensitive issue, ensuring they would become the center of controversy.

The lesson? Companies need to differentiate between several negative emails from small groups and negativity that actually affects their Sentiment on a broad scale before they react so strongly to an issue, manufacturing unneeded controversy. And sometimes the best PR response to a situation like this is to do nothing at all.

Inaction can be a virtue.