MKTG Insights: Old is Gold for Some Corporate Sponsors
Celebrity and athlete endorsement is a case study in risk-reward marketing. Last month, MKTG explored this risk dynamic through the lens of youth talent and the challenges that can be presented to corporate sponsors when they partner with young athletes and celebrities who so often succumb to the pressure and weight of "too much too soon". The maturity and morality factor is magnified in the case of young athletes, often causing sponsors to be burned by the personal transgressions of those on their endorsement roster. And while it is the presence of certain qualities that made Michael Vick and Ryan Braun, and still make Johnny Manziel polarizing figures, it is the absence of those very same qualities that make veteran and retired athletes so attractive to sponsors. In a culture where salaries are rising and individuals are incentivized to leave university or college at a younger age than ever before, the struggle young athletes face with their new found fame are simply not as prevalent with veteran athletes, who are experienced at managing the burden of the spotlight.
When a professional or marquee amateur athlete retires, their accomplishments and credentials - and even their failures - are established. Rather than investing in potential or performance, sponsors are investing in a legacy. In Brazil, that strategic discrepancy is exemplified via a comparison of the sponsorship portfolio's of two household names: legendary retired soccer player Pelé, and current superstar Neymar. Neymar, the face of the Brazilian Men's World Cup team that played at home this past June/July, and one of the world's top strikers, earns just 6% more in annual endorsement income, despite being nearly 70% younger than Pelé who retired in 1977. Pelé currently has deals with Coca-Cola, Subway, Proctor and Gamble, and other blue chip sponsors. In a year where a Brazilian World Cup meant increased sponsor attention on both Pelé and Neymar, the free market steered nearly as much investment to a 73 year-old retiree as the footballer predicted to take his throne. MKTG examines why Pelé - and his fellow elder statements - represent an attractive opportunity to corporate sponsors.
Advantages of a Retired Athlete:
Experience as Brand Ambassador: Beyond all else, it is experience that set apart a veteran athlete. Retired athletes are seasoned at dealing with senior leaders in sponsor organizations, media professionals, and consumers at on-site activations. With experience as an ambassador under their belt, retired athletes are more likely to have a defined brand positioning, versus the work-in-progress of a young athlete.
Decreased Reliance on Performance: The marketing clout of a current athlete can be cyclical. Injuries and inconsistency can impact exposure, personal appearance opportunities, and fan sentiment. In 2012, Adidas placed a large bet on Derrick Rose: $185 million over 13 years. However, back-to-back seasons riddled by devastating knee injuries meant little usage of Rose by Adidas, ultimately impacting the value of the deal to the sponsor. While retired players may have aches and pains, the motive for partnering with them is independent of their current athleticism and ability to perform on a nightly basis. For sponsors, partnering with a retiree means a decreased dependency on performance.
Decreased Moral Pressure on Athlete: Professional athletes, particularly in microscopic and social-media driven culture, are scrutinized for their every move. In retirement, former players are not held to the same moral standard and present less risk to brands of bringing their sponsorship off-message.
Increased Availability: Between training camp, travel, and potentially long-postseason runs, access to a personality can be difficult to obtain for acorporate sponsor. In retirement, increased freedom of schedule makes appearances, filming, and other activations involving the ambassador easier to accomplish.
Resonance within Lucrative Demo: While retired athletes may not garner the same type of buzz as a current star within the 18 - 34 demographic so coveted by today's marketers, former stars appeal to an older demographic with increased purchasing power. In expensive, time-intensive, planned-purchase product categories like Auto, Airline, and Financial Products like Mutual Funds or ETF's, an older ambassador can bring increased relatability and credibility with an older target.
Freedom from Property Sponsorship Legislation: Current players can face restrictions on their availability to certain marketing partners. Michael Phelps, while still an Olympian, was prevented from partnering with non-Olympic sponsors within a certain window of the Olympic Games due to IOC bylaws, decreasing his usability with sponsors. As a retired athlete, Phelps has the opportunity to be more selective with opportunities, and sponsors are not subject to property governing bodies.
Case Study - Linking Retired Status of Athlete to Optimize Business Benefit:
While the notion of a corporate sponsor partnering with a retired athlete can provide generic strategic benefit across all brand categories, in specific instances, the retired status of the athlete can be emphasized as part of the marketing narrative and aligned to the business objectives of the sponsor. It is in this vein that Nationwide Insurance's recently announced partnership with the Denver Broncos and Peyton Manning can be considered best practice. Nationwide signed Manning, one of the NFL's most marketable athletes, to a 5-year deal, despite the fact that his career will likely be over in 1-2 seasons. In retirement, Manning will be used to promote Nationwide's suite of retirement products and appear in creative designed to make people feel better about the transition into retirement. One of the fundamental pillars of Nationwide's brand promise is to help clients plan for retirement in a way that protects themselves and their families. Manning, who between endorsement deals and charity work has prepared himself well for life after football, is an authentic spokesperson for the role. Brands are often reactionary in their endorsement activity: "what should we do now that a player is traded/hurt/suspended/retired/ridiculed". Nationwide's proactive strategic approach to how they will activate Manning will only yield greater value and bake in a layer of authenticity to the partnership.
Risks and Considerations:
For future-focused brands seeking to resonate with millennials, retired players may not communicate the appropriate messaging for certain sponsors. Brands who are betting on performance, specifically endemics, an older ambassador may not make strategic sense. Particularly for brands seeking to activate digitally, a younger talent may be more primed to meet those objectives through a large social media following.