The Double Edged Sword of Celebrity Endorsements

Pundits everywhere are speculating on the damage to the Tiger Woods brand. But what about the corporations and brands he pitches? CMO’s must always remember that celebrity endorsements are a “double edged sword” that carry both benefits and risks alike. 

Tiger Woods - What Impact on Sponsored Brands ?

I’ve written previously about the importance of Marketers contributing to corporate reputation efforts (Should Marketers Care About Corporate Reputation?), but the Tiger Woods story presents a new angle: how celebrities impact corporate and brand reputation. 

Celebrity Impact on Sponsored Brands

I was recently interviewed by Alex Witt on MSNBC about Tiger’s impact on his sponsored brands like Accenture, Cadillac, EA Video Games, Gatorade, Gillette, Nike, and others. We discussed  a range of topics and how Tiger has become a double-edged sword for sponsored brands: 

  • How does Tiger’s presence and performance affect PGA Tour TV ratings ? What impact will his absence have ?
  • What do we know about the effectiveness of ads which featured Tiger Woods versus those which didn’t ?
  • What impact has the late night talk show monologues, riffs, and skits had on Tiger’s sponsored brands ?

Clearly, Tiger Wood’s personal reputation has taken a crushing and perhaps irreversible dive. What about the brands that he represents? Learn more about the impact on his sponsors, as well as my own take on the issues, in Reuters, USA Today, BloombergThe New York Times, AdWeek, and BrandWeek, or watch my MSNBC interview with Alex Witt

Lessons For Marketers

There are three important Marketing lessons Marketers should take away from the Tiger Woods story: 

  1. Assume the Worst – CMO’s should assume that any celebrity they use in their Marketing, no matter how seemingly “pristine,” will have an issue at some point. And with the web’s ability to spread “spurned media” at an unprecedented rate, brand damage can be fast and severe.
  2. Diversify your Marketing Assets – Put simply, brands should use celebrity endorsements as one element of a multi-faceted Marketing program. Building your entire Marketing program around a single celebrity and related creative idea can put the brand at serious risk if problems arise.
  3. Have a Back-Up Plan – If disaster strikes,  brands must be prepared. What’s the plan to deal with any celebrity disaster fallout, including the digital trail of negative media that will live on for months and years on the web? And what’s the back-up Marketing plan?

It all reinforces an important, but oft forgotten point about the “double edged sword” of famous spokespeople:  brands can benefit from the association of a strong spokesperson brand–but face the constant risk of that reputation turning negative, no matter how unlikely it seems.  Accenture, Cadillac, EA Video Games, and others are relearning this lesson all over again while they recover from the collateral damage of a spokesperson gone awry. 

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4 Responses to The Double Edged Sword of Celebrity Endorsements

  1. Nice piece on MSNBC on Tiger, Randall! Great tie in to late night TV too. Enjoyed your perspective… thoughtful and analytical as always. Cheers,

    • beardrs says:

      Hi Laura — Thanks for the comment. It’s been interesting to assess Tiger’s impact on sponsors, and the media has done a reasonably good job on reporting the “double jeopardy” to brands: the category as measured by viewer ratings will almost certainly go down, and sponsored brands are being negatively impacted as well. While the blog post doesn’t specifically cover it, there is strong evidence that the biggest brands with the most diversified marketing programs–of which Tiger was only a part–gained the least from Tiger based ads. Conversely, the smaller brands which enveloped themselves in Tiger gained the most. I suspect that we will see this phenomenon play out in reverse now–the smaller brands will be most negatively impacted, the larger ones less so. More to come…

  2. Lan Guo says:

    Hi Randall, very interesting article. I knew Tiger was one of the highest valued celebrity spokesperson but still was amazed at the numbers you cited. I wonder what the average effect from celebrity endorsement would be. I was in China for the holidays and was overwhelmed by not only the amount of advertising but the absurd percentage of celebrity endorsement ads. Marketers there sure can learn a lesson from this. Lan

    • beardrs says:

      Hi Lan — Thanks for the comment. The research I’ve seen on Tiger shows that ads with Tiger do perform better than those without–at least before his personal woes. I haven’t seen this kind of analyses across multiple celebrities, but I’m certain that performance depends on a range of factors–fit with brand, spokesperson credibility, etc. I’ll keep an eye open for more on the topic.

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