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MKTG Insights: The Risk of Sponsors Leveraging Youth Talent

MKTG Insights: The Risk of Sponsors Leveraging Youth Talent

Celebrity and athlete endorsement is a case study in risk-reward marketing. While a variety of research reports have shown conclusive evidence that sales, brand health, and even stock price can benefit from a brand entering a personal services agreement with a notable personality, there are no shortage of examples where brands have received a negative brand transferenceimpact from a celebrity endorser in a moment of scandal.

Public figures are human beings, and all human beings make mistakes - this is a risk that brands must accept and assess as they develop their sponsorship strategy and evaluate potential sponsees. Maturity and Morality in a personality is a fundamental component to MKTG's model for evaluating an individual's sponsor fit. Is the individual mature and stable in their behavior on and off the court? Will they be a good fit to introduce to senior management, key clients, should they be leveraged for HVC hosting opportunities? Can you count on them to conduct themselves as an upstanding citizen in the public eye?

For sponsors, these concerns are likely to be amplified in the case of youth talent, whether it be in professional or amateur sports, or in the world of entertainment. For public figures who have been exposed to millions of dollars at a young age and have their privacy breached, celebrity culture comes at a cost. Pressure and influence to lead a certain lifestyle can derail a promising career and present a threat for partnering brands. Young athletes or performers are more likely to lack the maturity or experience to conduct themselves appropriately in the public eye, particularly in a digital age, where personal transgressions become headline news.

2014 alone has seen a notable example of a superstar youth talent mismanage their personal brand:

Justin Bieber - While Bieber still has a loyal following, his marketability and likeability has been tarnished  in 2014 by a string of incidents. Loyal sponsor Adidas has remained by Bieber's side - however, his usage with the brand has declined. Bieber's critics would say that he consistently presents himself to consumers as "above them" and abusive of his celebrity status, opposite what brands search for in their ambassadors.

For sponsors, Bieber as a teen star represented the opportunity for a brand to partner with a rising star that transcended music. However, as stars age, there is a consumer and brand expectation that they mature and alter the message they put out to the marketplace. Bieber must be conscious of this as his career progresses. There is a life cycle of relevance and relatability for public figures, and Bieber risks losing the halo effect that accompanied him for so long, and the sponsors that came along with it. Extreme fame and fortune at a young aged caused Bieber to miss many developmental milestones that contribute to the maturity of a young person. While sponsors and fans may have been surprised by his 2014, warning signs were on the wall for both.

For sport, the economics have begun to catch up to the world of music and film. A "child star" used to be restricted to those in arts & pop culture. However, athletes now hold a level of relevance and appeal that rivals celebrities. Further, the professional sports environment has become one where salaries are becoming increasingly lucrative. Since 1993, the average salary of an athlete in one of the four major professional sports leagues has increased by nearly 300%. Athletes face great incentives to enter professional leagues and forgo years of education, where they receive crucial personal development and life skills.

An athlete like Michael Vick, who in the time prime of their career, earning tens of millions in salary and endorsement money, fell victim to bad influences and committed moral transgressions. Too much, too soon, is becoming an increasingly greater risk for athletes, versus being a risk restricted to Hollywood.

These market forces have resulted in a younger crop of endorsement opportunities for corporate sponsors. Young, wealthy, and with less regard for their image than their more experienced peers, brands may face increased risk:

How Can Sponsors Protect themselves?

- Morality Clauses: Stricter contractual provisions can help brand marketers hedge against the risk of brand ambassador misbehaviour. With higher investment levels, such provisions can protect corporate sponsors from a negative impact to brand health.

- Increased Emphasis on Due Diligence: Many brands now bring an increased level of research when assessing a potential partnership. Vetting can manifest through interviews with the families, friends, and even past teachers of potential ambassadors.

- Offer Counsel and Mentoring: Just as professional sports team and leagues have been known to provide rookies with media / social media training, brands can do the same, and have access to experts in PR, social, digital, etc. This sort of activity can authenticate a partnership and integrate an ambassador into the organization.

- Build a Crisis Management Strategy: While no brands wishes to come under fire for a sponsorship, strategically planning for these situations will yield greater value and allow sponsors to act with efficiency.

- Start Small with Young Talent: As reported in this week's Toronto Star, shoe brands can longer justify large contracts, like the $180 million deal originally thought be offered to Andrew Wiggins. Instead, endemic sponsors are making small bets with younger players, and investing heavily once they are proven to be sustainable high-performers. This approach can applied to any property genre, not just sport.

The Upside of Sponsoring Uprising Talent:

There are moments when marketers should pursue agreements with young stars. Partnering with an athlete on the upswing of their career can assist a future-focused brand support their marketing narrative.

Younger athletes may also be more plugged-in to the increasingly sought after millenial generation, active on emerging social media platforms, and relatable to up-and-coming sport participants.

Brands like Foot Locker have specifically built their sports marketing strategy around a roster of rookies, versus monopolizing their spend on a single, marquee star.

For every story of a celebrity endorser gone wrong, there is a story of a youth talent who was able to navigate their early rise to fame into sustained marketability. Notable examples include:

1. Taylor Swift: One the biggest musical act draws in the world, Swift has been largely scandal free in her career. Her fan-first narrative and humility protect her from criticism. She has crossover appeal amongst multiple demos (rural, urban, teen, adult).  Sponsors Include: Coca-Cola, Elizabeth Arden, Keds, American Greetings.

2. Gabby Douglas: Coming out of the 2012 London Olympics, Douglas received the second highest N-Score rating of any American athlete (AC Nielsen's measure of endorsement power). The Olympic spotlight is intense and unexpected for many unexpected medalists. It requires a certain stability and composure to be able to navigate that wave of interest. Sponsors Include: Kellogg's, Proctor and Gamble, McDonalds, Capri Sun.

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