Ad Agencies: Reputation Insurance Is on the Rise for Celebrity Endorsements

The New York Times is reporting that insurers are being “inundated” with inquiries from companies seeking to protect their brands.

“Many companies take out death and disability insurance to cover themselves in the event that an athlete or celebrity endorser dies or is injured while under contract. In a new wrinkle, more companies are trying to insure against the potential loss of sales when an athlete product endorser is involved in a scandal,” according to the Times article.

After all, if someone like Tiger Woods can suddenly become a liability to companies that were linked to him through his endorsements, how many celebrity/athlete endorsements are really safe bets?  That’s exactly the point of my previous posts on this subject.

“Insurance policies can cover money paid to athletes as well as the cost of producing and booking television commercials, print advertisements and other promotions,” the Times article notes. “Some insurers will also cover the costs of new commercials with replacement athletes.”

Insurers say they base their assumptions on how much revenue grows after an athlete or celebrity became a company endorser, but no amount of insurance is going to protect a good corporate name if it gets tied to a scandal.

As one underwriter put it in the Times story, “Tiger Woods has made people think about their reputations. These days, people don’t worry about the office burning down, but about their intellectual property being damaged.”

Don Beehler provides public relations consulting services to small- and medium-sized advertising agencies and businesses.

Accenture Replaces Tiger Woods with Animals in Ads

This was too good to pass up. After posting my comments yesterday that it’s safer to link a company with an animal “spokesperson” such as a gecko, duck or cow than with a celebrity, today I learned that after six years of a sponsorship agreement with Tiger Woods, Accenture is replacing his image with a line up of animals.

According to an article in yesterday’s Wall Street Journal (which I just saw referenced in another publication this afternoon), “After nearly a month of focus-group testing and production work, Accenture is rolling out the new global marketing campaign this week. The creatures, which include an elephant, a chameleon and some frogs and fish, will star in a series of TV, print and online spots. They also will appear in airport ads in 28 countries.”

Wonder if this is the start of a trend where other companies will soon be following the herd?

Don Beehler provides public relations consulting services to small- and medium-sized advertising agencies and businesses.

Tiger Woods Fiasco Has Important Lessons for Ad Agencies

Until now, I’ve resisted weighing in on Tiger Woods’ marital woes. Like a lot of people, I already know more about his escapades than I wish I did. Still, there are some important lessons ad agencies can glean from this fiasco.

I can’t recall ever seeing a person’s reputation fall so quickly and dramatically, followed closely by sponsors dropping this hot potato left and right.

I found it interesting that earlier this month Ad Age ran a story saying some people in the sports-marketing industry were speculating that Tiger’s newfound notoriety “might actually redound to the benefit of the brands he endorses.”

One PR expert suggested Tiger could rebound if he and his wife stay together and he keeps winning. Apparently, winning covers a multitude of sins, at least according to this line of reasoning.

Well, it hasn’t quite turned out that way for Tiger, and now there are question as to whether he will ever play golf again professionally.

One of the most obvious lessons to be learned is that in a crisis, stonewalling doesn’t work very well. Especially when you’re someone famous, the media will dig out the truth and put you in a reactive mode.

A second lesson is the risk companies take in sponsoring an individual. When Tiger’s favorability ranting in 2000 was the highest in poll history at 88%, having a close corporate tie no doubt seemed like a good idea. In the latest USA TODAY/Gallup Poll, his favorability dropped to 33% — a 55-point swing from his peak.

Perhaps the most important lesson, though, is that in an age when tolerance reins supreme, there still are some things most people won’t tolerate from celebrities, and repeatedly cheating on one’s spouse with multiple partners is one of them.

Don Beehler provides public relations consulting services to small- and medium-sized advertising agencies and businesses.