Tiger Woods Controversy Affecting The Golfer’s Brand Name
Tuesday, January 5, 2010
Why are some companies dropping Tiger Woods from their ad campaigns, while others are standing by the golfer? We speak to marketing experts about the Tiger Woods controversy, and how it has affected his brand name.
MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh. You're listening to These Days on KPBS. From the wee hours of the night after Thanksgiving to the present, the world has turned upside down for golf superstar Tiger Woods. Whether or not you've wanted to follow the scandal, you probably know Woods has admitted cheating on his wife and has withdrawn from at least this season's professional golf circuit. You also probably know Woods’ numerous paramours have flooded the tabloids. Besides being one of the best pro golfers of all time, Woods was also one of the most sought after corporate spokesmen. His sponsorship agreements reportedly brought him $110 million a year. But that has turned upside down, too. Joining me to talk about the decline of the Tiger Woods brand name and what makes a celebrity marketable are my guests. Dr. George Belch, professor of Marketing and Chair of the Marketing Department at San Diego State University. Dr. Belch is also the co-founder of SDSU’s Sports MBA program. Dr. Belch, George, welcome to These Days.
DR. GEORGE BELCH (Professor of Marketing, San Diego State University): Good morning. Good to be here.
CAVANAUGH: And Kathleen Cunningham is president of Advanced Marketing Strategies, which is a local marketing and communications firm that has worked on branding campaigns for many local companies including Mossy Nissan and San Diego County Credit Union. Kathleen, welcome.
KATHLEEN CUNNINGHAM (President, Advanced Marketing Strategies): Hello.
CAVANAUGH: Well, Kathleen, what do you think about this Tiger Woods controversy? Are you surprised about how far he’s fallen so fast?
CUNNINGHAM: Yes, I’m very surprised. And I think that it’s a great case study on celebrity endorsements and, really, how great they can be and how quickly they can go sour.
CAVANAUGH: And why was – Let’s look back. Why was Tiger Woods such a sought after advertising icon before this whole thing broke?
CUNNINGHAM: Well, the reason that his name was so valuable when attached to products as a brand was that he delivered a consistent brand promise. And what I mean by that is you could always count on him to be the same person, to deliver the same performance, which was excellence. His performance on the field was top notch. He was a hardworking guy. He was full of integrity. People liked him. And that was a great brand to attach to a product. And he always delivered that. He was very, very, very consistent, almost robotic in his consistency, and that’s great for a brand. You want to be consistent in delivering your brand promise.
CAVANAUGH: And, George Belch, I’m going to ask you the same question I started out with Kathleen. Are you surprised about Tiger Woods’ fast fall from favor?
DR. BELCH: Oh, I couldn’t agree more with what Kathleen has said and also, yeah, I am tremendously shocked at this because I don’t think we’ve ever seen such a high profile sports celebrity fall so far. You know, Tiger Woods was held up on a pedestal. He was, as Kathleen noted, like a paragon of the sports world and of the endorsement world, arguably one of the most effective endorsers that we had had in marketing for a number of years. But then to literally overnight and, you know – and be on the front page of all the tabloids and just, you know, one day after another just be held up to ridicule and, you know, the whole scandals and everything surrounding him and it’s pretty much unprecedented in the whole marketing endorsement world.
CAVANAUGH: George, you are a professor of Marketing and Chair of the Marketing Department at San Diego State University, so I’m going to ask you what makes a celebrity brandable? I mean, why do so many athletes become brand names?
DR. BELCH: Well, there’s several reasons. One is performance, as Kathleen – or it has to be based on performance. And he was, you know, the – arguably one of the best golfers, and still may be one of the best golfers ever, and, you know, he came onto the golf scene very celebrated, you know, as a endorser for Nike. You have to remember Nike, a few years ago back in the mid-nineties, made a strategic decision to almost bet a big part of their company on Tiger Woods and signed him to a very lucrative, longterm endorsement deal, decided to enter a whole new market: golf equipment. And he was the leverage for them entering that market, and so he came onto the scene extremely celebrated, you know, very advertised, if you will, but he delivered. He won and he won consistently, and he was this model of perfection. He, you know, went to Stanford, very articulate, very bright, handled himself very well. And the Tiger that we saw on TV obviously is not the one that we’re really finding out about right now.
CAVANAUGH: Now why, George, in your – with your expertise, are some companies dropping their sponsorship deals with Tiger like Accenture and AT&T, while other companies seem to be standing by him.
DR. BELCH: Well, I think in a case of companies like Accenture, they had no choice. I mean, they had completely tied their image of high performance consulting to Tiger’s image, and they had kind of hooked their brand image to his bandwagon. And when this hit, there was just no way that Accenture could stay with him. AT&T is a very high profile company, and I think they had very little choice. Now, on the other hand, Nike—and Nike has always been a little bit edgy—Nike uses Tiger for golf and, among golfers, Tiger’s image is surprisingly holding up. They’re not condoning what he’s done but at the same time I think they’re still saying, well, you know, I’ll still buy golf balls or golf equipment that he might be endorsing.
DR. BELCH: The other companies like the Gatorade, I don’t think – You know, they put him on the back burner, them and Gillette, and I don’t think they’re going to bring him back, I really don’t. I just don’t think that – You know, a lot of women are purchasing this product that these companies sell and I think they’re particularly offended by his actions.
CAVANAUGH: I’m speaking with Dr. George Belch and Kathleen Cunningham, who’s president of Advanced Marketing Strategies. We’re talking about the Tiger Woods brand name and what makes a celebrity marketable to corporations. I think, you know, in reviewing this, I don’t think many of us were deeply involved in the knowledge of which brands Tiger Woods sponsored, had sponsorships from and so forth. What would be – why would Accenture, these non-sports related companies, latch onto Tiger Woods in the first place?
CUNNINGHAM: Well, it’s a great strategy for a company like Accenture to differentiate theirselves (sic) from their competitors. In professional – Well, let’s just say what they’re selling is very hard to articulate and so they’re selling integrity, they’re selling good business decisions. They want to be a good partner. And so if they latch onto a celebrity like Tiger Woods that embodies those brands that they want to bring forward then that’s a good tactic for them because it’s very hard to differentiate one professional services company from another. And so if you look at all your points of difference and you all sort of stack up the same, then you say, okay, how am I going to differentiate my company from another company? So you get somebody like Tiger Woods and you put them as the face of your company and all of a sudden people recognize you. You get better awareness. You’re more believable in your attributes. And so that’s a tactic that people use in using celebrity endorsements.
CAVANAUGH: And Tiger Woods was – I read somewhere that he was ranked number one in brand name sponsorship, brand name before this happened. Are there actually rankings? I didn’t know that, Kathleen.
CUNNINGHAM: Yeah, it’s very interesting. There’s polls that are taken on celebrities to determine their likeability, their awareness, their credibility, and there are rankings. And he was definitely the top. And it’s amazing right now, even on the internet, there’s different things, there’s blogs, all the social networking. You can sort of gauge the positive and negative reaction to a product or a celebrity and Tiger had around a 90% positive awareness and now it’s down to 30. And the interesting things is the products that he’s associated with have also seen some negativity attached to their brand name just because of their association with Tiger. So in marketing and branding, you always want to be testing and seeing how things are going and adjust. So if the celebrity is high-ranking and has great awareness and great likeability, you continue to go with them. If they start to fall down—and it can be from their performance, you know, if Tiger went from number one to number thirty, his awareness would go down, his likeability, his brandability would go down. So you’re constantly testing and measuring.
CAVANAUGH: And, George, who are some of the other really top advertising icons that we have. I guess perhaps your expertise is in the sports world. So who gets those endorsement contracts?
DR. BELCH: Well, you know, that’s an interesting question. I mean, clearly, if you look at – among sports celebrities, we had one other of those high profile sports celebrities, Kobe Bryant, have his own problems a few years ago.
DR. BELCH: And he was pretty much disappeared from the endorsement scene for about five years and is just now slowly coming back with a few companies. This is probably going to open the door for people like LeBron James, who, you know, is really up there. Michael Jordan, although he’s not playing anymore, is still a, you know, favorite among many marketers although, you know, Jordan is not there every day and that’s important. You want to have the celebrity that you have your brand hooked to in front of the public as much as you can. And so, you know, we don’t really have any heir apparents, if you will. I think LeBron James might be one. Kobe Bryant might pick up a few endorsement deals but because of his problems, some of these big name companies, Fortune 500 companies in particular, are going to be very careful about making any big deals with him as well.
CAVANAUGH: And, Kathleen, can you compare what happened with Tiger Woods to what happened with Kobe Bryant? I mean, obviously the charge against Kobe Bryant, which was dropped, was really much more serious than what Tiger Woods has admitted to doing in the sense that he’s, you know, marital infidelity as opposed to rape, and yet the firestorm around Tiger Woods seems, in a sense, to be hotter and brighter.
CUNNINGHAM: Well, I think it has to do with Tiger Woods was more seen as untouchable and he was really almost inhuman in his perfection in his sport and what he delivered. So I think it’s a matter of we held him in such high esteem that we’re all just so surprised and it’s just the opposite of what we’ve always thought. And I think it’s to the extent, too, I mean, it wasn’t just with one person; there were several people. And I think it’s just a matter of how different it is from what we thought he would be.
CAVANAUGH: And I want to also ask you, Kathleen, you know, when – I started talking about Tiger Woods, he reportedly make $110 million a year in his sponsorship agreements. What – Does he still get that money? When we say that the companies drop him, have they actually dropped the contract with him?
CUNNINGHAM: Yeah, they’ll have clauses in their contracts that will be for morality and if you breach any of that then the contract can be broken, absolutely. And I think just to back up what George was saying, that some of these big companies are really going to be thinking twice about these celebrity endorsements and if they do enter into these contracts, you really have to plan for this kind of thing because, after all, we’re dealing with human beings. So you have to make sure that you’re ready. You have a crisis communications team available for when something like this happens, you have ads that you can get going right away that don’t feature this person. I mean, the problem with Accenture is that everything had Tiger’s face in it. You know, they’re in airports. And with big companies, it takes months and months and months to change a campaign. So, you know, my advice to those companies, if they’re going to enter into these, is have a campaign that’s ready that you can put into action right away that everybody’s already approved, and recheck this on a regular basis and make sure that you’re ready for this kind of thing.
CAVANAUGH: I’m speaking with Kathleen Cunningham and Dr. George Belch and we’re talking about the problems that Tiger Woods has had in maintaining any kind of corporate spokesmanships considering the personal scandal that he’s been dealing with in the last few weeks. And, George, I – When Kathleen mentioned how the companies are – you know, they should have a team of people ready to go if there’s some sort of scandal erupts, I think a lot of people have been actually surprised the way Tiger Woods has handled this particular problem. Is the way he has been inaccessible and silent and withdrawn, has that only exacerbated the problem of his maintaining any kind of relationship with these corporate sponsors?
DR. BELCH: Well, I think that’s probably contributed to the problem, no doubt about it. I think a lot of experts have said he should’ve come out and at least make a public statement, address the situation. But the problem we have here is this whole situation is very fluid. It changes every day. Every day there’s another story coming out about Tiger Woods. You know, I read an interesting statistic the other day and the New York Post, he was on the cover of the New York Post, front page of the New York Post, for 20 straight days. And the only other situation or event that ever was on that much was 9/11. You know, the media’s having a field day with this, for one. They’re just covering it and not only on the celebrity talk shows but the mainstream media. It’s, you know, it’s the major networks cover it, the major news media cover it, and so the situation is so fluid. And I think the problem here, no one exactly knows what’s going on. There’s rumors, innuendoes going around. Every day it’s a different story. You know, one story, Tiger Woods is in Phoenix getting his plastic surgery for injuries inflicted. The next time, you know, he’s in Palm Beach partying with his old girlfriends. I think that the whole situation is just so much up in the air. He’s definitely handled it very poorly and you’ve got to wonder if his advisors are even able to get through to him.
CAVANAUGH: So, Kathleen, if Tiger were one of your clients and you were advising him on marketing and trying to salvage his brand name, what would you advise him to do?
CUNNINGHAM: Well, at Advanced Marketing Strategies, we always advise our clients to take control of your own press. Put your own story out there. Craft your side of the story. Don’t run and hide. If he were to have somebody that’s advising him and say, here’s where I’m going to be, I’m going to be on my boat, and film yourself on your boat. Or, you know, I’m going to be in rehab, and show us that. Instead, he’s letting the press take control over his own story and that’s never good. He could squish all these rumors if he’d just come out and tell people where he is, what he’s doing, that he’s sorry, he’s recouping, he’s getting his life in line. And so the most important thing is to take control of your own press in a situation like this. And that’s back to actually having a plan, too. His people should have a plan for something like this. His companies, his sponsors, should have a plan for something like this and you just shouldn’t let it just run by itself like a wildfire.
CAVANAUGH: Let’s take a phone call. Dana is calling from UCSD. And, Dana, welcome to These Days.
DANA (Caller, UCSD): Hi. So I had a thought. Maybe if Tiger’s image isn’t so effective for promoting Accenture’s products anymore, I did a quick search on the internet and it seems there already is a cologne, T Woods cologne for men.
DANA: Maybe his image would work better for promoting fragrances these days?
CAVANAUGH: Well, thank you for that, Dana. Thank you for the phone call. Which brings us to the idea, George, that maybe Tiger could be marketable in a different way, not perhaps the squeaky clean image that he’s had for such a long time but as, I don’t know, maybe promoting some sort of a sports bad boy image. Has anyone been successful doing that?
DR. BELCH: There have been a few sports celebrities a few years ago. There was an athletic shoe brand, Pony, who tried to take people like Pete Rose and a few others who had fallen from grace and try to, you know, show them in this kind of bad boy role. But that’s very short-sighted. I really don’t think that that’s what he wants to do long term. Yeah, he could get a ton of endorsement deals from a lot of second tier companies or even some companies who want to exploit what’s going on here but that’s only going to exacerbate the problem for him. And I really think that he needs to stay away from that just at a personal level. I mean, he’s just going to drag himself further, you know, down if he goes that particular route.
CAVANAUGH: And that does bring us to this idea of the personal level. Kathleen, of course we’re talking about Tiger Woods as a brand name and what companies look for in brand names when they give celebrities these huge amounts of money but, you know, there is this sense, as an outsider looking at this unfold, that this is a real personal meltdown that Tiger Woods is going through. I mean, this is something that he is going to have to come back from in a – from a very deep part of his being.
CUNNINGHAM: Yes, I think so. And I think the one thing about America and consumers that we are very forgiving and I think one day when he comes back and maybe he goes to rehab and he comes back and he tells us his story that he will be forgiven. But as far as what he’ll be able to do with his brand name, I think that it’s going to be very limited. I don’t think that companies like Accenture, AT&T will be able to sponsor his events or he’ll be able to sponsor their products. And, you know, the gentleman caller talked about a cologne. I can’t even imagine what women would want to buy their man that T cologne. I mean, just think of there’s such a stigma now. And, you know, they’re even – I even heard on television the other night that there’s the Tiger Woods syndrome, you know, is your husband cheating? So the products associated with Tiger Woods are not going to have a good run, so I agree with George that there’s probably not going to be very many things he’s going to be able to do. It’ll be limited.
CAVANAUGH: That’s interesting. So he – Kathleen, as far as you’re concerned in making predictions, that he will probably come back personally and perhaps professionally as far as sports goes but not as this endorsement icon anymore.
CUNNINGHAM: Not as the billion dollar man, I don’t think so. I do agree that some of his sports sponsorships will stick as long as his performance level stays to where it has been. I mean, he’s got to come back. And I mean, if he wins his first tournament, you know, Nike is going to be in great position but if he comes back and he really can’t get it together because this is such a personal meltdown, as you said, then he’ll start to lose those endorsements, too.
CAVANAUGH: Now, George, doesn’t even Nike have a big problem with Tiger in the sense that there’s a whole golf classic or something with his name on it. Forgive me, I’m not really familiar with this.
DR. BELCH: No, Nike doesn’t really have any tournaments tied to him but to Kathleen’s point, Nike is Tiger’s biggest endorsing source of income. He has a very large contract with Nike. And that’s the one that he will probably retain. But even with Nike, I think they’ll stand by him; they stood by Kobe Bryant through all his problems and they’ve started using him again. I think Nike is the one company that will stay with him but he has to be careful there as well to make sure that that’s the one sponsorship that he probably can preserve out of all this. He might pick up a few minor sponsorships if, as Kathleen noted, his performance level was high and, you know, he kind of stays out of the media. But I think, you know, his role as a big spokesperson, as she noted, the billion dollar man, I really do agree that those days are pretty much over for him.
CAVANAUGH: Okay, George, give us your forecast for Tiger Woods. And I’m thinking about if he returns to sports, if he is the top golfer in the world again. Do you think that will ever happen? And if it does happen, what kind of advertisers will return?
DR. BELCH: Well, I think this is the $64,000 question because when he goes back on tour, it’s not going to be easy for him. Golf is a very unique sport because the fans, the spectators get very close to you. And, you know, he’s going to get the comments, he’s going to get heckled, he’s going to have a lot of derogatory remarks leveled at him, and it’s going to be hard for him to tune all that out. And the real question here is, can he return to the same level once he goes back into the public? That’s going to be quite difficult. As a sponsor, I see Nike staying with him if he continues to perform. And maybe four or five years down the road that he might get a few other endorsements if he stays clean but other than that, I don’t see him returning to the endorsement high profile docks any more.
CAVANAUGH: Well, Kathleen, we seem to be harder on Tiger Woods than we are on a lot of politicians, a lot of people that we elect, a lot of people we place a lot of trust in. Is it because we expected more of him?
CUNNINGHAM: Yes, definitely. And it was the way he always held himself. He always held himself on the golf course like he was better than anybody, and he was, and it was great because he could really deliver that. But to see him in this light is just not so good. And I just hope that his endorsement deal with Nike does hold up. I’d hate to see him stoop to the levels as a John Daly on the course who now has, you know, he’s fallen from grace as well and he was a great player. And his big sponsor now is Hooters.
CUNNINGHAM: So, you know, I would hate to see Tiger go down that route.
CAVANAUGH: And, as it stands, though, I think the one good spot in all this is we know he doesn’t need the money.
CAVANAUGH: Well, I want to thank both of you so much for speaking with us today. Dr. George Belch, thank you for being here.
DR. BELCH: Thank you.
CAVANAUGH: And Kathleen Cunningham, thanks for speaking with us.
CUNNINGHAM: Thank you, Maureen.
CAVANAUGH: You’ve been listening to These Days on KPBS. Stay with us for hour two coming up in just a few minutes right here on KPBS-FM.
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