The short answer is yes, it is.
There are others in the industry that may disagree with me. They will cite various studies that validate their opinions. Such studies by researchers have found that bad publicity has actually increased the loyalty. However this increase of loyalty was found only among customers with an already high commitment to the brand receiving the negative publicity. What about the customers with a low commitment to the brand? What about those without commitment? In other words, what about future prospects?
It seems that those who believe bad publicity is actually positive, are only concerned with immediate publicity. Clearly, they are not taking into account the company’s image among its various constituencies. The purpose of having a positive image and reputation is to sustain and grow a company’s client base.