Some people will see an ad somewhere that they find offensive and they will then write letters to the company that makes that product advising that they will never buy the product again because of their support of X. I worked for a company that advertised during the super bowl the year that Janet Jackson and Justin Timberlake started Nipplegate and we were flooded with calls for more than a week afterwards about how people would never buy our product again because we supported nipple exposure, nevermind that we had nothing to do with it. If the ad is in a magazine that people find to be repellent or a commercial during a show that people find to be offensive many people will be very vocal in their dislike and advise that they will never purchase the product again.
I’ll second pbbth’s experience and go one further. My client got calls threatening a boycott because their TV commercial ended up on some show people found objectionable. Only problem, my client didn’t make the product that was in the commercial, and didn’t even advertise on TV. (Different company, similar name.) So, yes, some people do react to a scandal like that.
Another reason is even more fundamental: advertisers don’t want to advertise in a medium that distracts people from their ads. I think Ford and Peugeot believed (and were probably correct in believing) that any people who weren’t already boycotting News of the World would only look through the most gossipy, salacious items trying to figure out if the paper would get in trouble for publishing this or that item, not even caring about the ad.
Agreeing with the prior posters. Advertisers don’t like having their ads appear in a context which might make them look bad by association. Even if the sorts of boycotts / customer defections mentioned above don’t actually materialize, it’s usually not worth the PR headache to attempt to ride out the storm, and publicly ending one’s relationship with the offending property (TV show, spokesperson, or newspaper, in this case) is usually believed to help mollify the angry customers.
It’s an indirect way for consumers to let the media makers know that they do not approve of something. If you’re not a Nielsen family house, the producers of a TV show more or less don’t give a damn if you don’t tune in. So, you need to hit them in the pocketbook in another way, and one way to do that is to turn up the pressure on their advertisers.
It’s long been advertising practice to avoid guilt by association. When a plane crashes, all airline ads are pulled. The big time world of advertising is based on consistent reinforcement of imagery. The ad is the picture, and the publication is the frame. Advertisers don’t want their images shown in bad frames.
Advertisers spend an enormous amount of time, effort and money in building a popular brand. There’s no reason to persist in advertising or sponsoring something which will tarnish their brand by association. And when your potential customers are so heartily disgusted with a newspaper’s antics, it certainly doesn’t harm your brand to come out on the side of popular opinion. And you can just stick your ads in the rival papers.
In this case, there’s rather more to it than just the News of the World. If it were just that newspaper, one of the biggest papers in the UK remember, that were under pressure, I think the owners would have tried to weather the storm rather than promptly closing the paper. But the publishing company, News International, is merely a very small part of Rupert Murdoch’s News Corporation empire (the NotW makes like £40 million a year, peanuts to him). His chief concern in the UK right now is trying to to buy out the BSkyB satellite TV company, which makes more like a *billion *a year. For that deal to go through, he has to keep the regulating authorities, the government, and therefore ultimately the voters, happy. So rather than allow the furore over the behaviour of NotW journalists to affect News Corporation as a whole in the UK, the paper was sacrificed.
Also, if something or someone has become dramatically less popular, their endorsement is now a lot less valuable, and it makes sense that advertisers would want out of it, at least at the rates established before the collapse.