Endorsed Brands Take a New Twist

Endorsed brands have always been an important brand strategy. Endorsements take on different variations. We continue to see people with lab coats acting as doctors to endorse the efficacy of a product or demonstrate what a "talk with a doctor" might look like. There are Ralph Lauren and Eddie Bauer interior in cars. Reebok sponsors work-out rooms in hotels. Martha Stewart is an endorser of towels, pillow cases, dishes, and other home products. Her name provides a risk reduction for those who are not certain they know how to properly decorate their homes. Oprah's endorsements can drive book sales, generate traffic at stores, and create new celebrities (Dr. Phil, Dr. Oz, etc. were all created by Oprah and have now become their own celebrities and are now endorsers).

Endorsements are designed to lower fear, uncertainty and doubt in the purchase. Endorsements are not designed to attract everyone. They are designed to attract the target. They connect the target with people who are admired or looked up to. They are a reference group--someone we aspire to be like or be associated with. A Nike shoe is a brand, but an Air Jordan takes on a whole new dimension because Michael Jordan is behind it. His endorsement was so strong that LeBron James actually said one time that he thought he could jump higher when he was young because he was wearing Air Jordans.

As a result of social media, consumers have become even more skeptical or celebrity endorsements, so a new twist has occurred. Celebrities like Ashton Kutcher and Lady Gaga are now taking a piece of the company and taking on management roles within the company so that their endorsements are not only more believable, but so that they share in the success or failure of the company (actually, there is little downside for the celebrity from a monetary standpoint since they get paid as well as a getting equity). Kutcher, for example, is going to be the head of social media for Popchips, a line of potato chips that are baked rather than fried. He is considered a social media expert because he has more Twitter followers than almost anyone on earth. He may not really know social media, but his Tweats about Popchips will likely lead to increased sales--at least amongst people who like Kutcher.

We saw how intimately tied companies and products are to their endorsers during the Tiger Woods problems. Accenture dropped Tiger immediately because his endorsement was no longer appropriate for a consulting firm. At the same time, Nike continued to support Tiger since he was responsible for the rise of Nike Golf. His personal issues could be separated from his athletic prowess. Tiger may not have had a piece of the equity at Nike, but he has a lot to say about design, similar to the input and responsibilities that Michael Jordan had at Nike.

Nike better watch closely what is happening. If Tiger or Jordan wanted an equity stake in the company, they would command a lot a hefty amount of stock--more than shareholders might be willing to tolerate, but the negotiations and calculations would be very interesting.

Gatorade Drops Tiger--Only Nike is Left

Gatorade, a Pepsi brand, announced that it was discontinuing its relationship with Tiger Woods, leaving only Nike as a major sponsor. Actually, the announcement was most surprising in that most people didn't know that Tiger endorsed Gatorade. Pepsi has so mismanaged the brand that it is becoming a shadow of its former self in the category. The CEO of Pepsi, Indra Nooyi, even was on TV and said that Gatorade is for athletes so they expected a bit of a drop in their market share. Okay, so you want to further narrow the market for your already withering brand?? Surprising, but, okay, if you insist, I will not consider this is the future because you have told me it is not for me. Guess I'll go for Powerade or some other brand. You're told me the brand is not for me. Hope you make up the difference in volume with athletes. I imagine that Pepsi will be supplying lots of Gatorade to the teams it sponsors in hopes of getting a bump from their association.

PepsiCo Inc. first announced it was partnering with Tiger in October of 2007, to develop a branded drink for its Gatorade line called Gatorade Tiger. The drink, which launched in March, 2008, came in three flavors “inspired and selected by Tiger.”

Since that time, Gatorade has changed a great deal. We do not really know if Tiger has changed or has always been a "skirt-chaser". Gatorade certainly cannot claim to be hurt by Tiger's off-the-course problems. The brand, which has since rebranded itself "G" to get more street-cred with the athletic types Pepsi wants, is certainly not looked at or positioned as being pristine. Look at the ads for Gatorade. They look like they are trying to win over the street ball and skate-board crowd. They want to be edgy and urban in their appeal. Few people would believe that the athletes Gatorade touts as being associated with them are pure and simple folk. Tiger certainly is not. I believe that Gatorade dropped Tiger because he is not actively playing golf and so has no monetary value for them. It has, I believe, nothing to do with values. Gatorade said it would continue to support Tiger's foundation--probably a loop-hole in getting out of its contract or a way for Gatorade to protect itself if is consumers balk.

Nike will likely continue to support Tiger. There would not be Nike Golf if it were not for Tiger. Nike defines its brand as being for athletes, and if you have a body, you are an athlete. In other words, unlike Gatorade, Nike is for everyone who wants to be active and do better at what they do--run, play basketball, golf, etc. Their brand is defined "between the lines", so to speak. It occurs on the playing field one chooses. So Tiger's indiscretions do not impact the Nike brand quite like they have other brands that borrowed his persona to equate with their own (e.g., Accenture). Nike sponsored John McEnroe, even though at the time he was considered the "bad boy" of tennis. His on-court performances, though, were outstanding and that's what Nike cared about. Accenture, on the other hand used the phrase: "Come on, be a Tiger", suggesting that it was his total package that the firm would help one emulate. When the chuckling from clients began, Accenture was out.

Brands are about symbols, attributes and associations. The associations with Tiger's private life were too much for Accenture; the attributes are what matter for Nike. Who knows what matters to Gatorade anymore?!