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Google is spared the public’s anger over UK tax spat

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UK
Wed, 21/11/2012 - 10:34
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Last week executives from Amazon, Google and Starbucks appeared before the House of Commons public accounts committee to discuss the issue of tax avoidance, which led to some calls for consumers to boycott big brands that are accused of not paying their fair share.

But how is brand perception actually impacted by these sort of accusations and subsequent political grilling?

Back in April 2011 I looked at five brands that had been targeted by protesters over their tax arrangements, such as Vodafone, Boots, Tesco, BHS and Topshop.

The figures showed that there had been no big change in their corporate reputations as a result of those public protests.

Looking at the three US brands questioned by the public accounts committee, however, we see a more mixed reaction from consumers.

Firstly, on buzz (which measurers whether people have heard good or bad news) there is a big drop for Starbucks, from +1 to minus 29 in the wake of the tax avoidance story in the UK media.

The brand had slowly started to recover before falling back again after the appearance before parliament, and now stands at around minus 33.

There was less of a drop for Amazon and Google, however.

The biggish Google dip is largely related to the premature release of their financial results in October, which also prompted a brief collapse in the firm’s share price, rather than any concerns about its tax status in the UK.

We see a similar pattern on the Index, which is a composite of six key image measures including that of corporate reputation. Starbucks suffered a relatively steep decline after the story broke, Amazon experienced a smaller dip while Google’s scores barely moved.

So why is there a difference between the brands?

It could be down to the coverage, it could be that Google fares better because it doesn’t so obviously have a product that the average consumer pays for, or it could be because of the levels of built-up brand equity.

It’s possible that Starbucks suffers more from the public’s wrath because it hasn’t yet earned the right to be given the benefit of the doubt.

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