Sports Endorsements – Worth the mega money?

Following on from my ‘Sports Marketing – It’s like social media’ blog, I thought I would look into player endorsement. I’ve looked at things like the costs and benefits of athlete endorsement; and in addition I’ve looked at what happens when it all goes wrong!

We all know that sports are broadcasted to the masses, and I’m talking internationally not like Eastenders! Their market exposure makes them some of the most recognised names and faces in media. This makes them a very attractive prospect for brands to associate themselves with.

It’s not just their market exposure that makes them attractive. If I asked what words you would describe a professional athlete some of the following would no doubt come up!

Can you imagine if consumers used some of those words to describe your business? One of the major benefits of player endorsement is associating your brand with the words or key attributes that the public perceive the chosen athlete to have.

Unfortunately like most things in life, it’s not as simple as paying any old athlete to endorse your product and waiting for the magic to happen. You must carefully consider the athlete’s popularity, if the public doesn’t like your chosen athlete then they aren’t going to buy into the endorsement. The negative association with a disliked athlete could even potentially harm the brand.

The association between a brand and an athlete needs to be believable. Sorry to point out the obvious, but the reason brands sponsor an athlete is to create brand awareness and impact sales. So consumers need to believe that the player/athlete uses the product that they are endorsing, otherwise the association isn’t credible. Are you familiar with Tom Brady? He’s an American Footballer who plays for the New England Patriots (ladies you may know him as Gisele Bundchen’s husband). Well he has an endorsement with the footwear brand, Ugg. Yes that’s right the sheepskin boot that is typically worn by females aged between 10 and 35!

For more NFL players with bizarre endorsements then click here

One particularly successful endorsement that stood out in my research was Michael Jordan and Nike. In 1985 Nike released the ‘Jordan Air’ trainer; the demand for the shoe was so high that it actually created a bout of ‘shoe jacking’.

Or have you heard of the lean, mean, grilling machine? It may be better known as The ‘George Forman Grill’, which is actually made by Russell Hobbs. The collaboration between the two has resulted in sales of over 100 million units since it was first launched.

Forbes Top Athlete Endorsers (Last 12 months) 2011

  1. Tiger Woods $90m
  2. Michael Jordan $45m
  3. David Beckham $37m
  4. Phil Mickelson $35m
  5. Roger Federer $26m
  6. Lebron James $25m
  7. Arnold Palmer $25m
  8. Vijay Singh $24m
  9. Ronaldinho $24m
  10. Ernie Els $23m

But what happens when it goes wrong?

The most well documented case is that of Tiger Woods, that man had everything:  14 ‘Major’ titles, 74 (as of today) PGA Tour Wins, 38 European Tour Wins, 2 Japan Golf Tour Wins, 1 Asian Tour Win, 1 PGA Tour of Australasia Win, 15 Other Professional Wins, 21 Amateur Wins, a hot wife, a son and daughter, and lucrative endorsement deals. In 2009 Forbes confirmed Wood’s as the first athlete to earn over a billion dollars in his career (before taxes).

In November 2009 Tiger’s crown slipped, he was wrapped up in a series of scandals which he referred to as ‘private matters’. Unfortunately they didn’t stay private, and lead to several companies re-evaluating their relationship with the athlete.

  • Accenture, AT & T, Gatorade and General Motors all ended the sponsorship deals with Woods’.
  • Gillette suspended their advertising which featured Woods’.
  • From December 2009, Tag Heuer didn’t utilise Woods’ in their advertising and officially ended the contract in August 2011 when it expired.
  • Golf Digest, suspended Wood’s monthly column starting with the February 2010 issue.

It looks bad, and it was. The ‘personal matter’ is said to of cost Woods’ up to $30m in lost endorsement deals, this isn’t even taking the cost of his divorce into consideration. He did have two companies stick with him, Nike and Electric Arts (they were working on the game Tiger Woods PGA Tour Online).

He had gone from the number one golfer to a low ranking 58 in November 2011. That said I think we are seeing the return of the Tiger! As of June 2012 he is now ranked number 4, and has just won his latest title at the Congressional totalling 74 PGA wins, and gaining yet another record. Over taking Jack Nicklaus’ 73 career PGA wins. One company that has recognised the rise of the Tiger is Rolex. It was announced that they are the first major sponsor of Woods since the ‘personal matter’ events. They were keen to be associated with the golfer, even with the knowledge that he doesn’t wear a watch when he plays, so the logo won’t be visible!

Maybe Woods’ agent had a similar conversation with him!

Does player endorsement work? There seems to be little data to support the thesis.

Let’s see what the nuggets say! (Welsh averages)

  •  3% Say celebrities influence their purchase decisions
  • 6% tend to buy products from companies who sponsor sports events and teams

(Source: GB TGI Radio+ 2012 Quarter 2, Kantar Media, Wales BARB region)

What do you think? Are Sports endorsements worthwhile? Can you think of any other examples of good, bad or funny player endorsements? If so leave a comment or get in touch with me by email, or @realradiojodi

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