Celebrity Endorsement And Scandal: Who Bears the Brunt?

In the twilights of 2009, world Number One golfer, Tiger Woods was enmeshed in a moral scandal that jeopardized his endorsement deals with many notable brands. While Woods expended considerable fortune and lost public goodwill in the ensuing crisis, it is alleged that the brands he represented cumulatively lost about seven per cent of their aggregate market value relative to both stock market value and the competition. Olaseeni Durojaiye speaks to industry practitioners on who bears the greater loss when celebrities drag their names  and consequently the brands they represent  into the murky waters of bad press.

Celebrity endorsement is not new to marketing. Long before Michael Jackson endorsed Pepsi in 1994; or Michael Jordan’s endorsement of Nike; or Akeem Olajuwon doing the same, celebrities have been known to throw their fame behind brands and products, often with fat cheques attached. In fact, a good chunk of the wealth of star sportsmen is traceable to sponsorships and endorsements outside of their professional calling.

Responses among agency staff with bias for strategic marketing reveal that existing market situations indicate that celebrity endorsement can indeed help a brand leverage on a celebrity’s popularity to grow its market share. It is recorded that during the 18th Century, Pope Leo XIII endorsed the cocaine-laced patent medicine Mariani Wine. Besides doing the same, Queen Victoria was also known to have offered a royal endorsement to some strong alcoholic drinks favoured by sea going merchants.

Nonetheless, a good endorsement should be natural while the partnership between person and product should be seamless to be credible. It is important to be realistic when picking a celebrity to endorse a brand as the reality of it is that the brand has to be seen in good light, appeal to its target audience, and ultimately sell.

Celebrity endorsement, however, appears to be enjoying an unprecedented boom in recent times as many companies and marketing agencies are now more disposed towards using people in the public eye to rev up acceptance of their brands and products. Though the trend started in more advanced economies, Nigeria appears to be catching up fast enough.

Superstars, such as the late Michael Jackson, Michael Jordan, Magic Johnson, Shaquil O’ Neal, Kobe Bryant, and more recently, Roger Federer, Thierry Henry and Tiger Woods, among a host of others, have joined the endless list of celebrities to endorse one product or the other.

On the home front, the Nigerian market is not left out. More than ever before, Nigerian movie and music stars have been smiling to the banks for agreeing to throw their popular faces behind corporate and, sometimes, product brands. Among them are 2face Idibia who endorsed Guinness Extra Smooth upon the brand’s entry into the Nigerian market. D’Banj has also endorsed Virgin drinks, Virgin Nigeria Airlines, as well as telecoms company Glo. Kate Henshaw, a popular Nigerian actress endorses Onga food seasoning and Glo.

Others on the Glo train include Wasiu Alabi, Sunny Neji, Uche Jumbo, Desmond Elliot, and Jim Iyke, among others. In sports, the likes of JayJay Okocha, Kanu Nwankwo, Obafemi Martins, Osaze Odemwengie, Joseph Yobo, and Julius Aghahowa are names commonly associated with brand ambassadorships in Nigeria .

However, the celebrity endorsement trend has occasioned a worrisome issue: What happens to the brand when such celebrities get enmeshed in one scandal or the other? Does the brand lose face with its consumers? Do the company and shareholders lose revenue?

The most recent on the international scene is the sex scandal involving golfer, Tiger Woods. Before Woods, Kobe Bryant was also enmeshed in a similar offense. On the home front, the one that stands out the most in recent times is 2Face Idibia’s alleged sexual escapades.

Industry people that spoke to M2 hold divergent opinions on the issue. Some argue that the brand has nothing to lose when a celebrity endorser is involved in an odious act, attracting recriminations from the public. Others opine that it is the celebrity that loses out in such cases.

Some contend that the only scenario that could make a brand lose out is when it is a new brand unlike the case in the Nigerian market where the brands are usually bigger than the army of endorsers.

Speaking with M2 in an interview, Toni Kan Onwordi, managing partner of Radi8 PR, explains that celebrities getting involved in scandals should not be viewed in isolation of the fact that they are human beings so long as the scandal does not involve loss of life or an act of pedophilia.

“I don’t think a scandal involving a celebrity who has endorsed a brand hurts the brand that much. When you hear of brands dropping a celebrity embroiled in a scandal, what you are experiencing is herd mentality.”

“Look at the case of Tiger Woods,” he says. “While most brands dropped him, Nike said they would stand by him and there was no negative fallout.”

According to him, “a celebrity is first of all a human being and when an act of indiscretion occurs, especially one that does not involve murder or pedophilia, the public will forgive the celebrity and the brand will thrive once suitable contrition is shown. In Nigeria it is even less damaging because the market is not very discerning and I don’t see much benefit accruing to brands from these so called celebrity endorsements.

“The 2face issue bears out my thesis of the herd mentality. When his baby-mama issues came up, he was on the payroll of Guinness and a few others. They didn’t drop him, they just didn’t renew his contract and the press didn’t help matters.

“Nigerian musicians usually have multiple wives and lots of children. Check from Fela to Sunny Ade to Okosuns to Orlando Owoh to Ik Dairo, Victor Uwaifo and Kwam 1. I am still not sure why 2face’s case was different but he was hounded and harangued and I think it affected his output,” explains Onwordi.

Like Onwordi, Adekunle Ayeni, a music industry insider known to have handled Brand 2Face at some point agrees with Onwordi. He asserts that celebrities are the losers when they run into scandals and not the endorsed brands.

In buttressing his point he explains thus: “I don’t think the brand stands to lose anything when a celebrity that endorses it gets involved in scandal; rather, it is the celebrity that ends up losing. The scandal affected 2Face’s music, it created a distraction and people began to judge him and his music by his private life. For someone whose music appeals to both Christians and Moslems, he lost the respect of both groups,” he explains.

Ayeni also toes the line of Onwordi when he says there was no way 2Face’s scandal could have affected Guinness Extra Smooth, hinging his conclusion on the premise that Guinness is a bigger and more established brand than the endorser.

“If Guinness were a new brand, maybe, it would have affected the brand but I don’t see how 2Face’s endorsement could have affected the brand. It is like expecting D’Banj to affect Glo or Kel to affect Soulmate if any of them runs into scandal because these brands have a following that has been there before the celebrities became popular,” he concludes.

On his part, Isiaka Lawal, head corporate affairs at Promasidor, states that his company has an official policy not to talk about the personal lives of its brand ambassadors. He hints tacitly that if any brand ambassador working with his company gets into some ugly drama it cannot affect the brand.

“With or without a celebrity endorser, our products will do well so I don’t see how it will affect our product or company if, say, Kate Henshaw who is the face of Onga is involved in any scandal. With or without her our brand will do fine,” he declares.

While some agree that the brands may not suffer, they argue still that is not enough reason for a brand custodian to turn blind eyes to misdemeanors on the part of its brand ambassador. They posit that by ignoring allegations and credibility issues raised by the public regarding a specific celebrity endorser, a company does its brand a disservice that can easily affect the bottom line and the message.

However, it is apparent that in most cases celebrities, rather than the brands or products, lose more when they get in the wrong book of the public due to one scandal or the other. The cases of 2face and Tiger Woods are proof.

At the peak of the scandal, Gatorade, Accenture and AT&T discontinued their endorsement deals with Woods. General Motors that provided the Escalade Cadillac (as part of an endorsement deal) which Woods crashed also severed relationships with him. While Nike and EA among other companies publicly stood by Woods, Tag Heuer and Gillette retained their deals but halted Woods’ advertising appearances.

Jennifer Schmidt, spokesperson for Gartorade, declared on CNBC at the time that “I can confirm that we no longer see a role for Tiger in our marketing efforts and have ended our relationship.” Her words suggest that there would be no further relationship between the parties, “We wish Tiger all the best.”

The same was the case with 2Face as he lost out both psychologically and financially. First, Guinness Extra Smooth refused to renew its sponsorship deal with him. Besides that, he lost face with music consumers; he also did with brand managers as he was excluded from A-list musical concerts at the time. Even top music promoters gave him a wide berth. Unconfirmed reports suggest that an ambassadorial honour was also withdrawn from him. But, while 2Face may not be the only popular Nigerian face to have had issues while lending their voice or face to leading brands, such issues are usually kept out of the public domain in this clime.

Industry insiders disagree on how to manage the situation when a celebrity endorser runs into crisis that calls his morals into question. While some argue that it is better to be quietly settled, others contend that the celebrity should be made to pay.

A source who declined to be named argues, “If I handle a brand whose ambassador runs into the kind of problem 2Face had, I’d just quietly drop the celebrity without making any fuss about it. I’ll stop having him at functions he or she should naturally attend for as long as the scandal rages in the public domain. I’ll maintain sealed lips about it with the media.

“If I do anything contrary my brand suffers. For every reportage in the media linked to my brand will be bad press and I wont want my brand stigmatized, even if my brand were to be Coca Cola, the world’s Number One brand,” explains the source who works as an Events person at a Lagos based agency.

The second school, adopting a more hard-line stance, however differs and recommends that relevant clauses in the contract be evoked to serve as a deterrent to other celebrities who endorse brands.

According to Hillary Igbanoi, an Outdoor and Events Practitioner, “The most recognized way that agencies evaluate a celebrity’s ability to be an endorser or spokesperson is source credibility. When they betray that credibility they should be made to pay. Why do you think that a good number of endorsement contracts today contain a moral clause that allows companies to exit without penalty in the event of an incident by the celebrity that greatly damages the company’s reputation?”

Whether a brand custodian chooses the quiet exit out of an endorsement contract or not, the fact remains that the celebrities oftentimes turn out the greater losers when they run into rough times due to their libido, crime or drug offence. As in the cases of Tiger Woods, 2Face or Kobe Bryant; the lesson for others remains that the celebrity, more often than not, loses financially and in terms of goodwill.