Cos walk a tricky line with endorsements
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Nike forgave Tiger Woods after he apologized for cheating on his wife. It welcomed back Michael Vick once he served time for illegal dog-fighting. But the company dropped Lance Armstrong faster than the famed cyclist could do a lap around the block.
What's the difference? A marketer's prerogative.
The world's largest clothing and footwear maker has stood by athletes through a number of scandals over the years, but this week it became the first company to sever ties with Armstrong in the wake of allegations that he used illegal drugs to boost his performance during his 20-plus year racing career.
At least five other companies followed Nike's lead, highlighting the tricky relationship that evolves when marketers sign multimillion-dollar deals for celebrity and athletes to endorse their products. Everything a celebrity endorser says and does could negatively impact the company they represent. And when something goes wrong, companies act as the judge and jury when deciding whether to continue those deals. They consider everything from the offense itself to the fallout.
"The tighter the association and the more intimate the relationship, it can sort of be like breaking up a marriage,'' said Allen Adamson, managing director of branding firm Landor Associates.
Endorsement deals have been around for decades. The value of such deals are a closely held secret, but companies often are willing to shell out millions of dollars for celebrities to wear their shoes, use their equipment or appear in their commercials.
The practice is even more common in the world of sports, where companies are willing to do almost anything to have their brand associated with the high performance of a top athlete. Think: Adidas sneaker maker's deal with soccer player David Beckham or General Mills deal to have Olympic Gold medalist Gabby Douglas appear on a box of Wheaties cereal.
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