Five Tips For Marketers Eyeing Olympic Athlete Endorsements

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Questionable? Brilliant?

This Olympics-focused editorial series is written by Ronald Urbach, Chairman of law firm Davis & Gilbert LLP and the co-chair of the Advertising, Marketing & Promotions Practice Group at the firm.

Much of what we hear as we read the reports of the Olympics is: how many medals? It appears that the media is compelled to quantify success, sort of like an Olympic box score. Is the US leading in the total medal count? Is the US leading in gold medals? How many medals does China have? Will Great Britain, the host country, finally begin to rack up the medals? As I write this article, the US is leading in total overall medals, though not in gold. Great Britain is coming on strong - now in third, and Andy Murray beat Roger Federer for the coveted gold in men's tennis.

But to advertisers and agencies, the medal count pales next to the critical question - who will be the breakout advertising spokesperson of the 2012 Olympics? Will anyone rise to the level of a true advertising superstar?

We are confident that there will be one or more Olympic athletes on cereal boxes. We will see one or more members of the US Olympic team at the White House. We know that the "Q Scores" of several athletes are being studied. The social media indices of Tweets, number of followers, and chatter on the web, which have become the advertisers' version of crowd sourcing, are being reviewed to help guide future marketing decisions.

When you think of 2012 Olympics advertising superstars - potential or real - who come to mind? Michael Phelps seems to be a safe choice. He has won more Olympic medals than any other athlete; he has transformed men's swimming like no one else; and even his eyes misted-up at the right moments during his medal ceremonies.

How about Gabby Douglas, the 16-year-old African American teenager who won the gold medal for individual overall gymnastics? She has a stellar smile; she was not expected to win big; and she has a compelling human-interest angle to her life and family. Or will it be the next swimming phenom Missy Franklin? She is the 17-year-old winner of multiple gold medals who is not at the zenith of her Olympic career, but at the nadir.

It is hard to divine the tea leaves and find the correct answer. What we do know is that Gabby may be on an upcoming Kellogg's Corn Flakes box; Missy may forego all endorsement deals to focus on her college career; and Michael will continue with and expand his endorsement deals. Whoever it will be, there are critical issues that must be taken in to account when you hire an athlete/celebrity. If you don't, you'll wish you saved the money and did something else.

Here are some key pointers.

Will the athlete remain a successful competitor? An athlete is a unique type of celebrity. His/her celebrity status is preconditioned on having a high degree of success on the sports field. This is especially true in certain Olympic sports where the competitors are truly amateurs, like in gymnastics and swimming. If you hired an amateur athlete as an advertising spokesperson and he/she has a career ending injury or decides to retire, the talent agreement needs to cover such a circumstance - i.e., the advertiser can pull out of the deal and get its money back, or a pro rata portion.

Should an advertiser enter in to a long-term deal? This is a gamble. If you sign the athlete to a long-term deal, problems caused by retirement or injury are exacerbated. Not only is there more money at stake, there is risk to the brand. The positive is that if you bet right, and this athlete becomes the next Michael Jordan or LeBron James, there will be tremendous value in signing the athlete before he or she actually becomes a real superstar.

How do you handle exclusivity? Exclusivity and its importance is a function of the history of the parties and the nature of the competitive landscape. If there is a blood feud between two companies and the fight is now personal, not just a marketplace fight, the scope of exclusivity will likely become quite broad. Though defining exclusivity by ensuring that your spokesperson does not "consort with the enemy" is perfectly acceptable, it just may not be acceptable to the athlete, and you might be blowing a deal over emotion, not over what is important to your business.

In today's era, is a "morals clause" still relevant? The answer is - Yes. Before all of his legal problems, OJ Simpson was an athlete that had made an effective transition to celebrity status, with movies and advertising stardom. Some of you may remember OJ running through the airport to make a flight after dropping off his rental car. Well, when he was accused of murdering his wife, there were frantic phone calls on Madison Avenue that led to a detailed review of documents. Why? Hertz needed to know if there was a morals clause in the OJ talent agreement. Since I was involved in that frantic effort and review, I can certainly say they were difficult times. Negotiating tip: always get a "morals clause".

Is a deal worth it? This is a very difficult question to answer. There is no such thing as unit pricing in talent deals. Consultants, agents, and advisors are only too happy to provide an opinion or advice (for a fee). Talent deals oftentimes are equal to an advertiser's budget for over-scale talent - i.e., how much it has to spend on a particular athlete. The best advice is: don't let your emotions drive the deal. Think about your car purchase or lease, when you tell the salesperson how much you have to spend and that you love the vehicle, his eyes see dollar signs.

An Olympic athlete as an advertising celebrity is like that little star in the sky, it does "Twinkle, Twinkle." But remember the second line to the song, it reminds us that we need to consider who the athlete actually is and if the deal makes sense: "How I wonder what you are." You can learn a lot from a lullaby.

Ronald Urbach is the Chairman of law firm Davis and Gilbert LLP and the co-chair of the Advertising, Marketing and Promotions Practice Group at the firm. His clients include numerous multinational, national, and regional advertising agencies, including those agencies that are viewed as being the top creative agencies in the world. Ron can be reached at rurbach@dglaw.com.

by Steve Hall    Aug- 8-12   Click to Comment   
Topic: Brands, Celebrity, Opinion, Policy, Sponsorship   

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