Wednesday, December 9, 2009

Tiger was the king of the endorsement jungle

I didn't really want to weigh in on this, but I can't resist a few musings.

The idea behind a celebrity endorser is that the celebrity's halo transfers over to the endorsed brand. In brand jargon this is called "secondary association" transfer. In the case of Tiger Woods prior to the scandal, Woods had extraordinary universal marketing appeal. His records on the golf course enabled him to halo "performance" and "champion" on to a brand that he endorsed. As the king of golf, a game about honesty, sportsmanship, sophistication and integrity, Tiger's celebrity could also transfer these desirable associations to a brand that he fronted. With such a winning combination of associations to transfer, it is not surprising that execs from Nike, Gatorade, Gillette, Tag Heuer, Accenture, Electronic Arts, Disney, Asahi Beverages, Buick, Wheaties, and American Express lined up to have their brands have their brands linked to the King of Endorsements. And line up and pay out they did. Over his career, Woods has had a revenue stream of more than $5 Billion - the lion's share coming from endorsements. He is the first billion dollar athlete and has been called the world's most marketable athlete.

So as the Web, TV, and tabloids further saturate with Mr. Woody's sexcapades, "silence monies", and nasty talk about Mrs. Woods, we can make some educated guesses regarding how much of a financial hit Tiger will take- at least from an endorsement perspective. In other words, which brands are most likely to dump Tiger and which brands are most willing to hang on to him. Here, I argue that the brands most likely to dump Tiger are:

1. Brands which used Tiger for "honesty, sportsmanship, sophistication and integrity" endowments
2. Brands that have a family orientation.

Alternatively, the brands most likely to stick with Tiger are:

1. Brands that have the most to lose from him going down (translation: those brands that have invested the most in him (e.g. Nike $30million per year)). Incidently, Nike stuck by Bryant after his alleged rape.
2. Brands that use him for the "championship" endowments, assuming Tiger continues to perform.

What are your thoughts on this? How much of a fall will Tiger take on endorsements? Would you continue to use him to promote a brand?

12 comments:

  1. Oh please, everybody cheats, just not everybody gets caught (actually, everybody gets caught - sooner or later). Give him a break! Bill Clinton cheated, and he got re-elected! If anything, it creates more publicity for him, and makes him more human.

    ReplyDelete
  2. I generally hate endorsement deals... Except maybe Jenny Craig. That kinda thing you really need people who've been through the program. But a Wilson brother hawking some cell phone? How does that even relate? I just end up hating AT&T more.

    ReplyDelete
  3. Supposedly his wife is going to stand by his side. I don't see why his endorsers should drop him either. When the dust settles, he will continue to dominate the sport...

    ReplyDelete
  4. Not everyone cheats......sorry that just isn't true..couldn't agree with you more Bob..Nike is IN for the long haul.

    ReplyDelete
  5. In those cases where the endorsement is about honesty and integrity I wouldn't stick with him.

    But when it comes to performance, I would apply a research with my clients to find out which perception is stronger when my brand is associated to his image: the lack of honesty(which is also important for sports) or the brilliant performance he has.

    If Nike has already spent that much with him, there's nothing that the company can do, but Nike can decide about the next years. The company has to check, not only if the clients still recognize Nike's values on his image, but also if this good image is stronger than the one created by the last scandal.

    More important than stick with an athlet is to stick with the clients, so maybe, this decision should be taken by them.

    ReplyDelete
  6. It is the hypocracy that I detest. Tiger always presented himself as an upstanding gentleman. Now it turns out that it is all a sham. If Nike sticks with him, they are signalling, "we tolerate hypocracy." They helped to make that BS image.

    ReplyDelete
  7. The thing about Tiger Woods is that he wandered around as this upstanding gentleman. This is such hypocracy. If Nike sticks with him they are signaling that they tolerate hypocracy. (They helped craft his image). To me, if Nike continues with Tiger, it suggests that Nike is comfortable with hypocracy on other things (e.g. sweatshops).

    ReplyDelete
  8. Bob, is your comment box working? I lost the first comment box that I made.

    ReplyDelete
  9. Staying with Tiger (or as some have renamed him "cheetah"):

    Nike, Gillette, Tag Heuer, Electronic Arts, Asahi Beverages.

    In addition to MacKalski's thoughts, I think that it may come down to a male/female split as well. Product lines targetting males are more likely to stay, while those directed at families or females are more likely to leave.

    Leaving his brand:
    Gatorade (previously announced), Accenture, Disney, Buick, Wheaties, and American Express.

    Those who think that "everyone" cheats are wrong. (Probably trying to forgive themselves for their own self-destructive behaviour)

    Tiger will also suffer on the golf course. He will now receive many more comments from the gallery and causes of distraction. He will still be very competitive, but not as dominant.

    ReplyDelete
  10. I think Tiger is going to come out of this pretty scot-free. Companies have been able to capitalize on the general public's willingness to forgive and forget, or at the very least forget. It's unfortunately an indication of how unimportant the sanctity of marriage is, and furthermore the growing acceptance of adultery, an act that was, at a time, considered illegal and punishable even within the U.S. Having said that, Bob you make a great comparison to Kobe who came out of that without a scratch, however a 4 million dollar diamond ring certainly helps.

    ReplyDelete
  11. Yes, cheating scandals in professional sports and politics is certainly nothing new. And I agree that Nike will probably keep Tiger because of his worth (contingent of course, on whether he decides to retire for good). However, I can't help but also consider that the nature of the sport of golf might also have an impact. Golf has traditionally been reserved for the affluent elite in our society. With expensive equipment and exclusive club memberships, to be a great golfer you need the dough. Along with that, the golf market seem to pride themselves on class and sophistication. Perhaps cheating is less acceptable in the golfing world than it is in other sports such as basketball? Could this mean that Kobe can get away with more because of his sport?

    ReplyDelete