General Mills Stock Gives a "Cheerio" Welcome to Controversy

Some companies go out of their way to court controversy, while others, like General Mills (NYSE: GIS  ) , seem to unwittingly be thrust into the middle of it -- though its stock will surely benefit nonetheless.

Its most recent commercial for its Cheerios brand cereal showing a mixed-race family went viral on YouTube -- currently the video has been viewed nearly 3.6 million times -- and apparently unleashed a torrent of racist commentary, which the cereal maker was slow in responding to. While comments to the video are now disabled, General Mills is being critiqued for not acting fast enough to shut down the vitriol.

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's (NYSE: NKE  ) 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 rapePepsiCo  (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 (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 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 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.

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  • Report this Comment On June 20, 2013, at 6:33 AM, cowboyjake wrote:

    It could be worse...at least it's not a commercial for Oreos

  • Report this Comment On June 22, 2013, at 7:06 PM, leewolfson1950 wrote:

    General Mills has taken other progressive positions in the past, most recently its public opposition to an anti-gay constitutional amendment here in Minnesota. Protests by supporters were met with polite indifference, as was the threat of organized boycotts. The sheer size and international reach of GM made this an absurd threat anyway.

    Bravo, General Mills!

    Proud to be a Minnesotan!

  • Report this Comment On June 24, 2013, at 6:58 AM, sweetgurl79 wrote:

    To General Mills, THANK YOU! THANK YOU! THANK YOU! for this SWEET Cheerios commercial with the biracial family, I love, Love, LOVE it! It is just So Precious!! Who cares what "race" the family is, they're still a family! I wonder if you had caught so much heat if the adults were Asian (etc.), and the spouse was maybe half and half any other "race"? Who cares anyway, if they love each other and take care of each other (like the little girl was trying to "take care" of her Dad!) I loved it from the first time I saw it, and I love it every time I see it! THANK YOU SO MUCH ! ! !

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