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, jodi.stuart@realradio.co.uk or @realradiojodi

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Will the London 2012 Olympics affect the Welsh economy?

The London 2012 Olympics are finally upon us. But what impact will the London Olympics have on Wales, or in particular Cardiff? I’ve looked into a number of different resources in attempt to establish if the Welsh economy will benefit from the 11 football games being hosted in the Welsh capital.

Almost every article I came across had mixed opinions on whether or not the Olympics will benefit the Welsh economy. If we look at the temporary levy on Sunday trading hours, Chancellor George Osborne makes a valid point about not wanting to hang up a ‘closed for business’ sign when some of the biggest events will be on a Sunday. However shop workers Union USDAW oppose the temporary rule change, and say there is no evidence to suggest it will boost the economy or tourism. USDAW also go on to explain that the extended shopping hours won’t put more money in consumers’ pockets and the last thing retailers need is increased overheads with little or no return. Retailers are asking staff to volunteer to work the extended shift not forcing them. I imagine the additional income from the overtime will be welcomed by many retail workers.

From a consumer perspective the biggest obstacle I foresee with the extended Sunday trading hours is the travelling and parking situation. On days where there is only one football match, roads around Cardiff will be closed for just over five hours and if there are two matches then they will be shut for up to 8 hours. Arriva Trains Wales will run extra trains into Cardiff, there will also be park and ride facilities. Unfortunately as a shopper it seems like getting into town will be too much hassle. I’m not a football fan, but I thought before a game you go to the pub and that’s where you would end up after, not in John Lewis!

Retailers can’t even advertise within 500m of the Millennium Stadium for almost a fortnight. There will be an increase in footfall throughout the city and local businesses are being denied the opportunity to promote their business, in order to protect the rights of official sponsors like McDonalds and Coca Cola. I understand that the advertising ‘no go zone’ was a condition Cardiff had to accept in order to host the events, as did all of the Olympic venues. The Millennium Stadium is in the heart of Cardiff, so it’s likely to impact a higher proportion of local businesses than some of the other venues throughout the UK.

There is no doubt that the hospitality and tourism industry have already benefited and will continue to do so throughout the next few weeks. Before the Olympics kicked off, Wales was a training base for almost 1000 athletes and support workers. A number of hotels have already reported that occupancy is up.

Hundreds of thousands of visitors are expected to visit the capital; a global television audience of 4bn is also expected. I keep reading about this being the perfect opportunity to showcase Wales to the rest of the world. However hosting the 11 matches, torch relay and preparing the city has cost Cardiff Council tax payers over £300,000. With so many in the city feeling financial hardship is it an appropriate use of funds? It’s not even as if the events are a sell out yet, so far 250,000 tickets have been sold but they are struggling to sell the remaining 300,000.

Wales won the lowest amount of Olympic contracts than anywhere else in the UK (according to new figures released from the DCSM). In total, Wales was awarded £4.5 million of contracts from the £7 billion worth of contracts that were up for grabs. At this stage in it unknown whether there was any bias towards companies based outside of Wales or if Welsh firms simply didn’t ‘cut the mustard’.

Wales has paid to host the London Olympics and it remains to be seen what we as a country will see in return. The evidence so far suggests that many decisions aren’t going in the favour of helping local businesses and the economy. The Olympics may actually affect ‘normal’ tourism trade with visits being avoided whilst the games are on. The 2010 Ryder Cup hosted at The Celtic Manor has continued to boost golf tourism in Wales, but this is a specific demographic with a golfing agenda. I don’t think we will see the same surge in tourism after the Olympics simply because Wales hosted 11 football games.

So will the London 2012 Olympics affect the Welsh economy? Some industries will benefit hugely over the next few weeks, but I don’t think the impact will be to the extent that some are anticipating.

Please leave a comment below or email me at jodi.stuart@realradio.co.uk or through Twitter @realradiojodi

Letter of the week B

Broadcasters’ Audience Research Board (BARB)

BARB is an organisation that compiles audience measurement and television ratings in the UK. It can then be filtered down by regions, demonstrated in the map below.

Behavioural Targeting

This is a technique used by advertisers to target their audience based on their behaviours. It can be done via online data capture (there are consent constraints), alternatively demographic data may be used.

Below the line

If you have already visited my first marketing jargon post, you will be familiar with the term ‘above the fold’. Well below the fold is the opposite, when you load a webpage you would have to scroll down to view ‘below the fold’.

Brand Advocate

A brand advocate is a person or customer that talks favourably about your product or service. This may be done via social media, word of mouth or if they are existing customers it may be through a testimonial.

B2C

An abbreviation of business to consumer, this means that you as a business sell your product or service to individuals.

B2B

B2B is the abbreviation of Business to Business, which means that your products or services are targeted to other businesses.

Bitly

Bitly is a website that enables you to shorten a URL, it’s popular with Twitter users because of the character restrictions.

Bounce Rates

Bounce rates refer to the proportion of users that visit your website and only view one page. They don’t explore your website before exiting; bounce rates are usually recorded as a percentage.

Bread Crumbs

This is a sophisticated and online version of Hansel and Gretel’s breadcrumb trail. When users visit a website and navigate through to different pages it leaves a trail of ‘bread crumbs’, which allows the user to trace their steps back.

Below the line

Is a strategy companies use to promote or sell their products/services. It is much more specific than mass media advertising; sending flyers or brochures to targeted postcodes is one example of below the line marketing. It could also be used within targeted social media marketing.

Mid-week read, some fantastic social media stats in here.

Teleperformance UK

In my last blog I explored the increasing importance of the customer experience, particularly because customers are now also publishers – they can easily tell their friends how good or bad your service is at the push of a button.

Consumers have really become the driving force behind the adoption of social tools in the enterprise, changing many departments within companies to reflect this. 57% of companies are using social media to be more relevant to their customers, 54% are using it to build better customer relationships, and 50% are using it to build better product awareness.

In the past 8 months, the number of UK consumers using social media as a customer service channel has doubled to 18m. This is an enormous change to the entire customer service industry – just consider that 65% of people think that social media is preferable to ringing a call centre. 68% of…

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An interesting article

Stand-Up Strategy

Even though advertising agencies should be the experts in branding, the own brand names of agencies are traditionally quite cryptic. The usual method of naming are the initials of the founders like with the law firms. Whether the reason is egoism, tradition or just plain unimaginativeness, this list proves that in order to succeed as an advertising head, you have to have a distinctive name. No matter whether you are planner from Paris or copywriter from Portland, it is crucial to get those initials to the door.

I have collected most of the current biggest networks here and added some now-defunct but historically important agencies. There are many agencies missing, but add your own in the comment section below. I started compiling the list when I started to get lost of all the different acronyms and holding companies. I think the most funniest/annoying names are when two companies have merged and…

View original post 1,484 more words

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