General Mills, Inc. (GIS) Stock Gives a “Cheerio” Welcome to Controversy

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.

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, Inc. (NYSE:GIS) 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, 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.