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The Dark Sides of Endorsements

116 & West

The Risks of EndorsementsAs we’ve discussed previously, signing with an endorser can provide great brand lift and expand the reach of your message. But we have all seen the dark side of endorsements through tangled, highly-publicized contract breakups in an attempt to preserve a brand’s reputation. Famous celebrity scandals have cost public figures huge contracts—particularly in the world of athletics. But the risks of endorsements aren’t only high for the Nike and Gatorade’s of the world. Consider these caveats and best practices for working with endorsers.

You are what they say and do

Perhaps one of the most unsettling parts of using an endorser is the vulnerability to their own words and actions. By associating your brand with theirs, you accept the risk of tying your name to their potential slip-ups or controversies.

We see this in multiple arenas. After his controversial actions at the Rio Olympics, Ryan Lochte lost several commercial sponsorships, including deals with Speedo and Ralph Lauren. Lance Armstrong lost lucrative deals with Nike and Anheuser-Bush after his doping allegations. Ultimately, these athletes’ offenses combined with misleading testimonies earned damaging reputations that brands quickly needed to avoid.

These controversies certainly aren’t limited to athletes’ endorsements. Numerous actors, musicians, and models have lost endorsement deals after controversial statements or actions. Some of the most famous fallouts include Lil’ Wayne, Chris Brown, Madonna, Whoopi Goldberg, and Paula Deen. As one example, Kate Moss’ modeling career took a massive hit after drug abuse reports swarmed through the media. The iconic British model lost contracts with H&M, Chanel, and Burberry.

What does this mean for brands?

1) Watch out for a loose cannon. A provocative or outspoken spokesperson probably isn’t a smart investment. 2) Don’t stop at their rhetoric. Evaluate their actions and integrity. Even though Lochte and Armstrong’s missteps came as a shock, we can all take away lessons from those situations. Learn everything you can about an endorser before offering any contract.

Assess the personality connection

Consider an endorser’s level of connection to your brand. Is their personality and/or career an innate connection to your product or service? Fortune reminds us of these naturally fitting connections, like Brooke Shields to Calvin Klein or Stephen Curry to Under Armour. If your audience pictures your product next to the face of the endorser, then that connection is deeply engrained in the consumer’s mind.

Some endorsement contracts don’t have such deep roots between a single endorser and brand. Companies like Microsoft and Bose hedge some risk by using multiple NFL player endorsements. Surface tablets and headphones are not strictly associated with football players, allowing some flexibility for these companies to vary their endorser marketing investments.

Consider Nike Golf’s tough decisions when Tiger Woods’ personal life was unraveling in 2009. Huffington Post reports that Woods lost an estimated $22 million in endorsement deals for 2010. While the Woods’ scandal stunned the sports world, Harvard associate professor, Anita Elberse, argues that the tremendous benefits that Woods’ association with Nike Golf produced far outweighed the short-term, negative impacts of his personal life.
Overall, a closely tied connection between brand and endorser brings its risks and opportunities. Companies who sign endorsers face this tension between leveraging as much value the endorser can bring while hedging their bets in case that relationship suffers.

Evaluate the relationship

Public relations experts share varying opinions on the best options for endorsement companies when these scandals arise. Business Insider reports on the need to distinguish how interwoven the endorser is with the product. If the brand and product have been constructed around the endorser, as is the case with Nike Golf, considering a hiatus from endorsement-driven advertising can be a cautious but smart move, allowing time for the dust to settle.
As a brand, ask your internal teams the following questions: Is it more damaging to keep our endorser or to break the relationship? Do we still get a brand lift from this endorser? How does this change how our audience perceives our product?

Establish a crisis communication plan

As a general best practice, arm your staff with internal communications plans to have a protocol ready if crisis occurs. Nothing looks worse than appearing unprepared or releasing poorly worded statements when controversy happens. Unplanned communication can be costly for your brand’s reputation—especially in a social media storm. By anticipating crisis scenarios, your team can have some level of direction and control of your company’s communication, helping your messaging come across more proactive and thoughtful than reactive and unrefined.
Forbes emphasizes the need for preparation to avoid knee-jerk reactions.

Following these steps can help set your crisis communication up for success:

  1. Seek understanding of the situation on all sides.
  2. Know the stakeholders and parties that should be notified in an emergency.
  3. Identify the spokespeople who are authorized to speak on your brand’s behalf.

Influencer marketing can also provide great opportunities to achieve similar brand lift. Here’s how to put together an influencer marketing strategy.

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