Media Business Strategies

The Blog of David Polakoff

Check Endorsements

Posted by David Polakoff on January 4, 2010

The Windmills of My Immediate Mind

Media Business Strategies – David Polakoff

Check Endorsements

Advertising, marketing, branding, sponsorship, product placement, naming rights, and celebrity endorsements are all separate sales strategy categories.  A previous posting questioned the value of naming rights (Namely Speaking) and two other posts discussed brand issues (Brandishing the Brand; Two Scoops of…Bunk?).  Since the Tiger Woods story drew news headlines for the most consecutive days since the story of September 11th, I’m compelled to check endorsements.  There is an actual and implied deal between brand, consumer, and celebrity.  Unlike other Woods story coverage, let’s focus on the consumer impact.

Last month, Mediaedge: cia (MEC) issued a report, “MEC’s Celebrity Endorsement SENSOR,” noting that 30% of 18-34 year old respondents indicated they try products especially if they are endorsed by admired celebrities.  Interestingly, only 14% of those 35-54 are so influenced; and merely 11% of those above 55 years are celebrity endorsement influenced.  35% of the report’s respondents think celebrity endorsements improve a brand’s overall awareness.

A separate news story cited University of California, Davis, Professors Victor Stango and Christopher Knittel in their contention that Tiger Woods lost billions of shareholder value in the companies with which Mr. Woods had endorsement deals.

Hence, celebrity endorsements influence not only sales value and brand value, but also shareholder value.  The influence can be favorable but can turn unfavorable.

While professional athletes and actors have morals and behavior clauses in their contracts (and ensuing endorsement deals do, as well), we still see countless stories of such celebrities violating those pacts and often having those contracts cancelled.  These incidents not only handicap, inhibit, or end these persons’ careers and related endorsement deals; but they cost the companies sales; cost the company a revamped marketing or ad campaign (in replacing that utilizing the celebrity); cost the company public relations expenses; and cost investors’ shareholder value.  Plus, companies are loath to soon re-launch a celebrity endorsed campaign, so it also costs other celebrities their valuable endorsement opportunities.

The operative word in “endorsement deal” is not endorsement but deal; everyone receives something from it.  The company has a deal with its consumer to provide a quality good/service. The consumer has a deal with the company to puts its trust, faith, and loyalty in the product/service.  The celebrity has a deal to speak well of the company’s product/service and s/he also has a deal with the public to extend the integrity of the existing celebrity/fan relationship to the endorsed brand and product/service.

A celebrity accepting endorsement checks must not gamble with this commitment; too much is riding on his/her word – for all of the involved parties.  Cancelling a celebrity endorsement relationship, after-the-fact of a scandal, is more than a lost endorsement check for her/himself; it is very detrimental to the consumer and to the brand; a fact that too many celebrities fail to grasp, appreciate, and behold.

I don’t endorse a “cut and run” policy in every celebrity endorsement gone awry.  I do, though, question how some companies handle the situation through the event cycle.  The chairman of Nike, Phil Knight said, “I think he (Tiger Woods) has been really great.  “When his career is over, you’ll look back on these indiscretions as a minor blip, but the media is making a big deal out of it right now.”  So how does a parent, who buys his child Nike products, explain to his 10 year old why Tiger is taking a hiatus from golf; and why it is no longer okay to wear a t-shirt with Tiger Woods’ picture?  I do not have a problem with Nike standing by Tiger Woods, over the long term, but Nike should better value its relationship and its “deal” with its consumer.  As a media consultant, again (see other column posts), I proselytize about always keeping my clients’ consumers as top priority and focus.  In Tiger Woods-like cases, the consumer feels betrayed and may hold more than the celebrity to account.   In the self-indulgent society of today, the consumer must demand more from scandalous celebrities and their sponsors than their just pushing the “I’m sorry” button.

In my adulthood, I don’t view celebrities as heroes, as perhaps I did in my pre-teen years.  I do, now, view heroes as celebrities.

Also in the month of December, Colonel Robert Lewis Howard passed away at 70 years old.  (Retired) Colonel Howard was considered the USA’s most decorated soldier.  Howard served in the Army from 1956 to 1992. He was nominated three times for the Medal of Honor, the nation’s most prestigious award for combat veterans. He was awarded it once, for his bravery in Vietnam during a mission to rescue a missing soldier in enemy territory.  He was wounded 14 times in Vietnam and was awarded eight Purple Hearts.  Colonel Howard is a hero but not a celebrity.

Celebrities are not heroes, but need to act in a more heroic fashion; honorable, altruistic and trustworthy.  If you accept an endorsement check; that’s what’s owed and expected – it shouldn’t be that big a deal.

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