Tiger Woods and the Risks of Celebrity Endorsements

Discussion
Dec 17, 2009
Tom Ryan

By Tom Ryan

After news of
his infidelity and his decision to quit golf, Accenture became the first
firm to end its marketing relationship with Tiger Woods. To some, the ordeal
underscores the risks around celebrity endorsements with the propagation
of Hollywood gossip websites and social media.

Writing for Advertising Age,
columnist Pete Blackshaw said that while gossip in the past was traditionally
spread at office coolers, social media and the web’s search capabilities
acts like a “feeding frenzy on steroids” for curiosity seekers. In the
last two weeks, the shelf-space for Google search results for “Tiger
Woods” had shifted from 95 percent favorable to nearly 50 percent hostile.

What particularly keeps scandals
around, however, is that the web creates a permanent record of any scandal.
And the bigger the scandal, the more content spreads across the web, equating
to a perpetual “Reminder-gram,” Mr. Blackshaw wrote. He noted that Wikipedia
alone had nearly 500 words dedicated to “Car Accident & Alleged Affairs.”

“At the end of the day, fair
or not, our brand equity is inseparable from the volume and composition
of our search results,” Mr. Blackshaw concluded. “And the web rarely, if
ever, forgets.”

But writing
for CNN, Anita Elberse, a professor at Harvard Business School,
cited a study she conducted that showed that brands across a number of
product categories jumped an average of four percent in the six months
after the start of an endorsement deal. Some grew more than 20 percent.
Importantly, the endorsements differentiated themselves from competitors, “which
did not experience any spillover of increased sales.”

Beyond connecting
a star’s fans to a brand, an endorser reassures consumers about a product’s
attributes and quality. For example, seeing Maria Sharapova using a Prince
racket shows the item is premium quality or the tennis star “herself would
be at risk of damaging her reputation.”

Ms. Elberser
said Accenture’s decision to drop Mr. Woods made sense since his actions
ran counter to the consulting firm’s messages, including the payoffs of
risk-taking behavior and recovering from setbacks. But she believes the
rewards in most cases far outweigh the risks.

“Marketers who
rely on athlete endorsers know they can be in for a rocky road — their
allied partners can suffer from injuries, a loss of form, scandals, rumors,
and a range of other woes — and they need to adapt accordingly,” wrote
Ms. Elbserer. “But don’t expect firms to cut back on the strategy altogether,
as endorsers on the whole generate considerable value.”

Discussion
Questions: Has the proliferation of internet and social media chatter
increased the risks around celebrity endorsements? If so, how should strategies
around using celebrities in campaigns be reassessed?

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21 Comments on "Tiger Woods and the Risks of Celebrity Endorsements"


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Joel Warady
Guest
Joel Warady
11 years 4 months ago

I don’t think we can blame the internet for this one. If the Internet did not exist, and there was no social media, the fact that Tiger Woods had relationships with 10 -13 women other than his wife, while his wife was pregnant, would still have made the news, and would still have made headlines. Some people think he is the world’s best athlete; do you think it is only the social media sharing of information that has spread the story about his infidelities?

In this case, one shouldn’t blame the Internet and social media for Tiger Woods’ problems. It is more the fault of the moral decay of parts of society, and the sense of entitlement that permeates Mr. Woods’ generation.

Mel Kleiman
Guest
11 years 4 months ago

For everything that has an upside there is a downside. When it comes to endorsements, the upside gain is greater than the downside risk.

Yes, as I walked through the airport yesterday and saw the Tiger Woods ad on the wall, I felt like Accenture took a hit. But for the last 3 years those ads have had a positive effect on me. It is one of the few ads that in the airport that I have remembered.

Even the negative image that Tiger Woods has created for Accenture is getting a lot of coverage which equals brand recognition.

Endorsements turned sour have a very small impact and in fact, may create great opportunity.

I can think of some great ads that Accenture could be running right now to capitalize on this situation.

Doug Stephens
Guest
Doug Stephens
11 years 4 months ago

This may be hard for most of us to wrap our heads around but the notion of “privacy” will soon become something we look back as a nostalgic idea from the past.

With the advent of geo-location, social search, closed-circuit video and RFID etc, our every move will be known or at least traceable.

Transparency is no longer optional.

I think we’ll see a greater degree of “fessing up” on the part of celebrities in advance of endorsement deals as it becomes increasingly apparent that secrets can no longer be hidden.

David Morse
Guest
David Morse
11 years 4 months ago

A brand absolutely takes risks by tying its reputation to the vicissitudes surrounding a celebrity’s reputation. The decision to support or drop a celebrity facing trials and tribulations says as much about a brand’s integrity as its initial decision to sign him or her on.

The case of Tiger Woods shows that, as usual, Americans stand alone in the world, in our apparent gusto in throwing stones at our heroes because of their sexual indiscretions.

It’s difficult to say how much of the public’s reaction to Tiger Woods is due to true moral outrage, and how much of it is fueled by the gossip mongering that fuels so much of social media today.

I, for one, would be impressed by a brand for having the courage to stand by a celebrity guilty of sexual peccadilloes. Is it really any of our business? Unfortunately, Accenture has decided that what Tiger Woods does in the privacy of his bedroom has everything to do with their public image.

Anne Howe
Guest
11 years 4 months ago

I agree with the notion that privacy is fast becoming a relic of the past. But because of our ridiculously insatiable appetite for scandal, risky behavior is in fact a core part of what makes a celebrity rise to superstar status. The 20% gains a marketer gets feel great and look great on the upside, but create a lot of red faces and angst on the downside. Therefore, it’s almost fully incumbent on the sponsor organization to assess the risks of a “crash and burn” and have a crisis mode action plan in place before they sign a multi-year “gazillion dollar” deal.

My question is this: have we become a society so obsessed with celebrity that the downside risk is just a minor blip on the radar? That’s the scary side of marketing today, because to me it means we’ve lost our way.

Ben Ball
Guest
11 years 4 months ago

It absolutely has.

I’m not sure even the high-flying, risk loving crew at Pepsico would make some of the bets today that we made back in the ’80s and ’90s. Jay Leno for Doritos worked out OK, but would we really have taken a hit on Michael Jackson? I don’t know.

But a big part of the flap over Tiger and Accenture is, as Mel pointed out, about the part of his image they tied into. Integrity and reliability are the unspoken offset to the risk reward behavior that Accenture encourages, equating themselves to Tiger in that regard. They simply had to drop that.

Other sponsors, however, are tied purely into Tiger the athlete. Tiger the tournament winner. None of that has changed. And he can rebound from that, Internet legacies or no. Just ask Kobe Bryant.

Liz Crawford
Guest
11 years 4 months ago

It’s not clear that celebrity endorsements are the issue here. It’s vetting the celebrities before hiring them.

I have worked at firms where we hired endorsers–and I do not remember gathering much intel beforehand. Of course, this was years ago, before the internet sent gossip into warp speed. Still, would this sort of issue been discoverable ahead of time? Maybe, maybe not. Are there psychological tests that could help screen for those celebrities, whose behavior would be more predictable? Perhaps these are the questions that marketers can ask themselves before hiring an endorser.

Celebrities are just people. And without excusing Tiger’s actions, I believe it is probably challenging to stand up to the prolonged scrutiny of the public gaze.

Patricia Berry
Guest
Patricia Berry
11 years 4 months ago
It truly amazes me that we have come so far that a good brand no longer stands on its own merits. I guess I have a hard time fathoming the notion that people will only buy a brand because a celebrity endorses it. I probably shop like most women do by purchasing the brands that mom always used. We grew up with those brands and loyalty will probably continue to those brands whether a celebrity endorses the brand or not. When I purchased my last set of golf clubs, I can honestly say that when trying the different brands out, I never once thought about purchasing a club because Tiger used them. I went with the ones that felt the best and heaven knows that even if I bought the kind Tiger uses and I practiced 24/7 during the next 20 years, I would never hit the ball like Tiger. As damaging as the Tiger news was to the American public, I know that I will not stop purchasing Nike or Gatorade or any other… Read more »
Warren Thayer
Guest
11 years 4 months ago

Very little in the world today remains private. The upside of that is that we may slowly become more accepting of human frailty, and less accepting of hypocrisy–as in, “There but for the Grace of God (or whoever/whatever) go I.” Perceptions of morality are on a continuum. I personally would not now want to be a corporate sponsor of Tiger Woods; I’d also have no problem with companies that wanted to continue. The guy’s in a lot of pain; I think it’s sad to see everyone piling on. Having said that, I still have laughed, in the past week, at sick Tiger jokes. No easy answers here, folks.

Charlie Powell
Guest
Charlie Powell
11 years 4 months ago

My question is this and it may be quite naive but why aren’t celebrity endorsement contracts written to spell out behaviors and situations that if they occur provide the company with sole discretion for continuation, termination, or modification without regard to time frames specified in the contract?

Also, I always marvel at the strange hypocrisies companies display when they do cancel contracts for as it used to be called “moral turpitude.” Despite a holier than thou attitude that garners headlines, most have had prior contracts with celebs that have done as bad or worse.

Do we just chalk that up to the short attention span of our shared stakeholders?

Jonathan Marek
Guest
11 years 4 months ago

Of all Tiger’s endorsement deals, there is only one company that should have known better–Accenture. For the others, it just doesn’t matter. The guy still evokes the Nike vision. He still golfs like a Swiss watch. But Accenture, they make their living advising other companies on what those companies should do, where evaluating risk is a huge part of the decision making. In not just using Tiger, but in the messages they tied him to, they showed that they were extremely poor judges of risk in their own marketing.

On the other hand, it is pretty funny to walk around airports and see the irony in those Accenture ads.

Rick Moss
Guest
11 years 4 months ago

Perhaps marketers should give more thought into the type of image they’re creating for the celeb. Woods has been portrayed as a super hero: squeaky clean and virtually inhuman. Keep these people on solid ground and they won’t have so far to fall.

Susan Parker
Guest
Susan Parker
11 years 4 months ago
Athletes and politicians have been having extramarital affairs for years. Rumors emerged back in the days about Arnie and his pals. The sense of entitlement that Joel references is not new–just more overt perhaps. The only difference is that the media had more respect for indiscretions in the days of yore. Today, there is no respect. The media feels no need to protect the image of the celebrity (for lack of a better word). In fact, they strive to dig up dirt on anyone. If the President of the United States can be brought down by indiscretions with an intern (and insert any other number of politicians or celebrities here), no one is immune. And although the web and social media are not to blame, technology does play a role is keeping the story line (even once it has had its 15 minutes) alive and in the present. Google search “Monica Lewinsky” for just one example. To answer the question (which I think means to say ‘reassessed’), the only thing companies can do is not… Read more »
Paul R. Schottmiller
Guest
Paul R. Schottmiller
11 years 4 months ago

Projecting attributes onto celebrities that are way outside the scope of why they became famous in the first place, is a significant underpinning of these endorsement deals. Creating this illusion works, otherwise the only thing Tiger would be selling would be items related to playing golf. Technology in general and social media in particular are driving more transparency and these illusions are getting more and more difficult to keep up…the falls are much faster. Not only do you need to beware who you are signing up with, but you also need to recognize the risks of what you are saying they represent.

In any event, Accenture got it right…by a show of hands how many think Tiger’s risk taking “skills” are ones to be emulated in business? How much that answer has changed in only a few weeks! Illusion over.

Craig Sundstrom
Guest
11 years 4 months ago

I would have to agree with Joel (at least his first paragraph). This seems rather reminiscent of OJ–quantitatively, fortunately, rather than qualitatively–which IIRC preceded the web.

As for celebrity endorsements: like anything else, there are benefits and, yes, risks: most companies probably have a pretty good idea of what they’re getting into when they sign someone, but as this case reminds us, there can always be unpleasant surprises.

Gene Detroyer
Guest
11 years 4 months ago

Is it just coincidence that Accenture didn’t drop Tiger until after he announced his decision to stop playing golf?

Scott Knaul
Guest
Scott Knaul
11 years 4 months ago

Celebrity endorsements are just a part of the landscape and with the benefits they provide come the risks, if the investment turns south. Not all of Tiger’s product endorsements will take a hit but some will, that’s the inherent nature of RISK.

Mark Burr
Guest
11 years 4 months ago
Before blindly jumping on to the Tiger bandwagon, wave or whatever you want to call it, did any one of these companies that paid dearly for endorsements check one bit into Tiger? Did they care then? Or, did they only care that he was ‘Hot’ and could benefit them even if it didn’t last? There seems to be little expected of your character as long as you are the ‘Hot’ item. Did we even as a society care? Do we care now? One comment made was that it was ‘sad’. Is it? If as I have read, that this behavior was very well known on the tour and by insiders, writers and observers, why didn’t it come out sooner? My guess–the wave was riding and the cash was flowing. There was clearly no expectation by any of the endorsers of his character in the outset. Why then now? Thirteen, maybe fourteen women? But who’s counting. Its likely not even a small measure of the entire list. So why now? Well, the cash just dried up… Read more »
Jerry Gelsomino
Guest
11 years 4 months ago

There are a lot of questions and studies out there about whether celebrity endorsements really sell products. To the intelligent, they don’t. To the fanatical (fans), they do. I think that when a celebrity signs on to a brand, and the brand ties themselves to the total character, not just their performance stats in their profession or expertise, they have an obligation to keep their image intact. Those who are tied to Tiger’s golfing, are safe. Accenture was tied to much more.

Sports fans, like music fans, can’t seem to get enough of their heroes, but when they get too close, and see the truth behind the facade, they are disappointed. Kind of like slowing down to look at an auto accident victim, and then wishing you didn’t when you see the body.

Celebrities like Tiger deserve their privacy, but cross the line of what’s allowed when they profit from selling themselves as bigger than life. Actually, I say shame on advertisers!

Mark Johnson
Guest
Mark Johnson
11 years 4 months ago

I think the idea of privacy may be abating and although Tiger did challenge the media (a la Gary Hart or Bill Clinton) he made a huge tactical mistake. Having a one night stand may have been one thing, but to have a 32 month (whatever the number is) affair with a woman is a fairly large tactical error.

I feel bad for him. Losing your wife is a horrible thing, but to have her take the kids to Sweden is a whole another realm of that “suckxxxxxxxxx.” I wish him well. I agree that the Internet or not, this would have been a HUGE story.

Rick Myers
Guest
Rick Myers
11 years 4 months ago

I didn’t know who Accenture was before the scandal. I believe people are more aware of who they are now. Tiger is still a top performer, regardless of his personal life. I think any company who uses a celebrity to endorse their products would be hard pressed to find one that is a perfect angel.

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