There's an old saying in show business: "There is no such thing as bad publicity." But it doesn't always hold true. You can ask the members for Brinsley Schwartz, for instance.*
Klaatu was victim of ill-conceived publicity, and paid a hefty price for it.
The group (named, of course, after the alien in The Day the Earth Stood Still) released its first album in 1976. With its spacy cover and songs, it looked like a throwback to the psychedelic era, and the fact that the musicians were not listed added a bit of mystery.
Too much mystery. Steve Smith, an writer for The Providence Journal wrote an article asking "Could Klaatu be the Beatles?"
The songs, especially their single "Sub Rosa Subway," were Beatlesque enough to give the rumor traction. The Beatles didn't comment, nor did the record company. It worked to get the album onto the charts.
But, though the question was asked, most people who heard the songs figured out the answer was "no" (I remember listening and knowing at once it wasn't the Beatles). When the actual musicians were revealed -- Canadian musicians Terry Draper, John Woloshuk, and Dee Long -- the backlash set in. Album sales dropped off as people felt the group was just making the claim to hype their sales (even though the claim sprung up independently). Later albums never went anywhere.
But there was some good stuff on the album. "Sub Rosa Subway" is a fine little song, and their "Calling Occupants of Interplanetary Craft" was later covered by the Carpenters and made the charts. There album isn't perfect, but, if not for the publicity, the group may have had a moderately successful career. As it is, they have a core of fans, but are otherwise forgotten.
*A British group featuring Nick Lowe. Their record company planned a big splash, flying a group of British music critics to a special show at Madison Square Garden in New York City. The flight was a disaster -- almost literally. The plane developed engine trouble and barely made it to New York. The critics were drunk (from free drinks on the plane) and nasty when they arrived and it didn't help that the group had visa troubles and couldn't rehearse until they went on stage. They were trashed in the press and their album sunk.