Friday, February 15, 2013

Athlete Endorsements: Risk and Reward

Two events this week lead us to reflect on the tenuous relationship between brands and celebrities hired to endorse them. First, the upcoming 50th birthday of Michael Jordan gives us pause to reflect on the impact MJ had not only on the NBA but sports marketing as well. ESPN business reporter Darren Rovell dubbed Jordan the "father of modern sports marketing." Jordan's 25-plus-year career as a product endorser has revolutionized the relationship between top-tier athletes and the marketing world. Jordan's role as a product endorser transformed the practice of endorsement from passive association of athlete with product to an active relationship in which athletes often are involved in product development and branding decisions.

Of course, not all athlete endorsers possess the charisma or marketing savvy of Michael Jordan. Moreover, the actions of some endorsers create unwanted publicity for the brands with which they are associated. In some cases, athletes that encounter controversy are able to overcome short-term, embarrassing situations and eventually retain their value as a product endorser. For example, Olympian Michael Phelps had to deal with negative publicity from unflattering photographs that went viral. The controversy died down, and for the most part Phelps continued to be an effective brand endorser.

However, there are times when the actions of an endorser or so controversial or unacceptable that there is no turning back. In the late 1990s, pro golfer Fuzzy Zoeller saw his career as a product endorser all but end after revelations that he had made several racially insensitive comments. Of course, the brand equity of the endorser comes into play when he or she is shrouded in controversy. Tiger Woods lost several endorsement deals after his personal problems became public, but he was not completely abandoned by companies that wanted to associate their products with his persona. High profile athletes may stand a better chance of weathering controversy, although it is not a certainty (see Lance Armstrong).

The latest story of an athlete potentially creating negative associations for a brand is South African Olympian Oscar Pistorius. He made history and inspired millions during the 2012 London Olympic Games, but his inspirational story came crashing to earth this week when he was charged with murdering his girlfriend. Nike has a relationship with Pistorius, and while it will undoubtedly show concern for the parties involved the brand will also show concern for protecting its reputation. The Pistorius incident is a tragedy, but a brand like Nike cannot afford to maintain an association with athletes or anyone else who find themselves in this type of situation.

Athlete endorsers are a risk/reward proposition for marketers. Anytime a brand is associated with an external object or person, a risk is assumed because there is not total control over the actions of the external party. But, associations can deliver exceptional rewards when an effective association is established between athlete and brand. Just as Michael Jordan and Nike... and Gatorade, and Hanes, and others.

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