The Brand Man Speaks

Tiger woods: This brand in free-fall may significantly impact sports endorsements in the future: Update: Gillette and Accenture put use of Tiger officially in phase out mode

THIS POST HAS BEEN UPDATED. SEE BOTTOM FOR DETAILS

Nearly two weeks after the 2:30AM car crash that has led to the acknowledgment of infidelity by the world's richest Golfer and best known athlete, Tiger Woods, we still don't fully know what happened to cause this to become the most notable celebrity misstep in years maybe decades.

What I do know is that the damage is significant and the Tiger Woods Billion Dollar brand is in free-fall. His agents and handlers are of course saying any loss of endorsements is pre-mature but I'll bet senior marketing management and lawyers at Tag Heuer, AT&T, NIke, Accenture, Gillette among others are up sleepless nights trying to figure out how to manage this PR disaster and discern whether or not they can can him. (I'll bet GMs decision to drop Tiger last year as an endorser of the Buick line because of financial difficulties at the automaker is heralded as "brilliant" somewhere inside that company).

Tiger announced today that he is leaving the game of golf "indefinitely" to figure out his life. A little late for that huh? You should have done some figuring before Thanksgiving and leaving all those emails and voice mails. Was Tiger so naive to think none of these women wouldn't go public for big money?

One TV pundit I saw insisted that he "knew" the contracts with Tiger were "ironclad" and nothing could force sponsors to stop paying him. I find that hard to believe. Virtually all endorsement contracts I have seen or have worked on in my career always had a back door out clause if the celebrity failed to perform or caused the sponsor's company or brand harm by his actions. Even if this were true..that all deals were unbreakable....it doesn't stop sponsors from not using him in their ads (I think all endorsement uses of TW have been stopped to my knowledge as of this point) and I do not expect them to use him in anyway for an indefinite period of time.

Wood's story continues to get worse and the lack of information keeps the story top news and only causes more financial harm. He is the butt of late night comedians and the internet is on fire with "have you heard" jokes about Tiger. Certainly no longer the perfect sports role model.

Speaking of which, because Tiger Woods was the single largest sports endorsement brand on the planet (as far as I know) this completely unexpected incident will certainly make all companies that use celebrities, especially sports stars re-evaluate hiring these folks in the first place. If Tiger can fall so hard and fast it proves the risk/return is becoming too great. My understanding is more companies are sponsoring sports teams or events rather than specific performers to reach their targets with far less risk. It is clearly possible the fall out from Tiger Woods infidelity may change an entire industry permanently. 

The Tiger story goes way deeper. It impacts Television sports, ratings and revenues. Tiger helped build this sport into a more democratic one bringing millions of new fans and dollars to the industry of Professional Golf. When he last left the game for medical reasons, TV viewership dropped dramatically as did ad revenues. This will happen again, except, if and when Tiger does return to televised golf, the ratings will likely soar, at least in the short term and golf on TV will be hot again. It does remain a serious question: Might Tiger give up the game permanently to find "religion, healing, forgiveness and family"?

Watching out for you everyday.

Eli

UPDATE: As of late today, both Gillette and accounting consultancy Accenture have announced they will put their marketing efforts behind Tiger Woods on hold indefinitely with Gillette indicating it will phase out use of the golf phenon relatively quickly. $$$ signs are dropping. I'm expecting more fallout within days. Word also has it that Tiger's yacht "Privacy" docked at Miami Beach Marina is being prepped for departure. Access to its dock has been restricted/keys changed even name on boat is being covered up. Privacy at sea shortly? Likely

Playboy brand coming to South Beach, Miami linking with Sagamore Hotel

Playboy, the male oriented iconic sexual fantasy brand from the 60s, has been struggling to survive on revenue from its magazine alone these days given strong competition from the internet and a changed culture in America.

So, it may be surprising to learn that the "bunny" brand is trying to team up with lux hotel Sagamore in famed South Beach Miami to get back into the hotel business.

Years ago Playboy was a fixture around the globe with hotels and lounges extending the magazine into three dimensions. As a kid I remember how cool it seemed to know someone who had access to a Playboy "key" to gain admittance to one of the famed locales to see the bunnies up close and personal. It was the era when the old James Bond character and his bed hopping swinging lifestyle was the envy of most men.

The brand has suffered as culture changed and competition increased.

The Sagamore Hotel, known as the "Art Hotel" in South Beach for its prized art collection, boutique size and more low key orientation than its grand neighbors such as the Delano and Shore Club, is unable to pay its mortgage. The recession has hit lux hotels around the US including in popular South Beach hard. Once rooms were easily fetching $400 or more a day. This past year many lux hotels in this market were lucky to get $200 and were losing lots of money.

It is reported that to "save" the Sagamore, a hotel I found very comfortable and highly enjoyable when I stayed there 7 years ago, the owners and loan holders are talking with Playboy about a brand merger. There would not be a casino, like Playboy would like to have and is associated with at the Palms in Vegas, but it would have all the rest of the Playboy trimmings, bunnies included.

Can the Playboy brand work in South Beach and at the Sagamore? I actually think yes. I think the retro nature of the Playboy brand albeit an updated one (culturally) which is more PC has a strong appeal and would attract audiences who come to South Beach to party hard and to see and be seen. The Sagamore was overshadowed by so many higher profile hotels in the area....new ones opening every year...(the W South Beach is the "it" hotel of the moment and booked) that it seemed lost among the frey. The Playboy association would give it new life.

Thus, I feel the Playboy brand is NOT dead just in need of a bit of retooling but its 60s/70s feel is consistent with other retro things happening in this country to a time of yore perceived to be more care-free and stable than today.

Watching out for you everyday.

Eli

Spirit Airlines "uses" Tiger Woods to sell cheap tickets; in bad taste?

I just came across the new TV ad for Spirit Airlines promoting their usual low low no frills fares. The unusual element is they are "using" the Tiger Woods car crash in an animated way to sell low fares titled "Eye of the Tiger".

In bad taste or is Tiger open for such abuse of sorts?

Watching out for you everyday.

Eli

Brand "Tiger Woods" put to its biggest challenge; Will sponsors stay on or bail?

The recent car "incident" involving the biggest richest branded athlete Tiger Woods is the first real test of the golfing greats ability to manage his brand (worth billions) under extreme stress beyond the course.

Brand Tiger Woods has become the biggest athlete brand in history primarily due to his squeaky clean beyond reproach family man/super athlete identity. There have always been rumors here and there about women coming on to Tiger...quite frankly I am amazed he hasn't been the target of more damaging rumors earlier kudos to his extremely well oiled PR and management machine.

But now comes the real test. Had the incident occurred during "normal" hours of the day or even evening I would bet silence without deviating from "full speed ahead" would have made this matter disappear and Tiger would be completely unscathed. However, the time frame of 2:30AM (or thereabouts) really won't allow this matter to be just ignore and pushed aside. Everyone knows it was a very odd hour to be out and about and to be "unnerved" (for a guy with nerves of steel) enough to smash his SUV leaving him unconscious within a few feet of his own home spells big trouble.

Tiger is going to have to come clean one way or another with the public or at least with authorities. Unwillingness to talk in our culture equals hiding something.

A brand like Tiger's worth more than 1 Billion Dollars has a lot to lose so his crisis management team must not make any mistakes.

As with other athletes, sponsors have so far said they are behind their man. However, I believe, many will reduce their use of Tiger, even eliminate it, for a period of time hoping for a positive resolution soon. The longer nothing is said and public opinion creates its own spin on the events, the more damage to the brand and the more likely sponsors are going to suspend their relationship with him or even drop him altogether.

Since Tiger was so "clean" this event only magnifies the circumstances and every move is being watched and monitored by the press and public alike. We, the public, want to believe in his fairy-tale life and career and unlike some other athletes or entertainers who get into trouble, we really do want everything to be ok with Tiger and for him to still be the gold standard among athlete/celebrities. If anything, we can accept that he is human, as long as we are told some of the truth versus nothing that is believable right now.

One thing in his favor; he didn't (it appears so far) do anything illegal just possibly (if rumors pan out about an affair) something questionable to negatively impact his perfect very moral family values posture.

Come Clean Now Tiger, show us you are human, seek forgiveness and get back to what you do oh so very very well...play golf.

Watching out for you everyday.

Eli

Wall Street Journal declares "Branding" is more important than ever

In a recent WSJ article entitled, "The Wrap: consumers do spend on innovative goods" the newspaper declares that consumer spending is not dead in this recession, rather it is becoming more selective as money is tight and waste cannot continue in this new paradigm.

I was surprised by this revelation, as it is not really anything new. Consumers have always made selections of goods based on what fulfills their needs, desires and emotions.

What seems to have changed is that consumer products' companies are waking up to the fact that just creating tons of "me-too" products that do not provide meaningful reasons for being in consumers' minds no longer works. These companies got lazy finding the robust economy would absorb many useless products and services that did not provide any differentiation from what was already available.

Differentiation and uniqueness along with tapping into consumers' emotional needs has always been key to successful products and services. Many of us call this "Branding": creating a core reason for being for any product. Too many companies cut back on R and D in the last recession and failed to bring to market anything very interesting and innovative to consumers. Sony Electronics is a prime example of this. A company once known for innovation, it became almost an afterthought in the past decade.

A few companies have always understood the need for meaningful differentiation. Apple tops the list in my mind and in many ways they have replaced Sony as the master electronics innovator. Actually, left them in the dust like the endless line of useless jets airlines no longer use that sit in the desert somewhere in the US west.

Contrary to the WSJ piece, we are not entering a new era of marketing. Rather, we are experiencing a re-awakening of marketers brains to the fact that "old school" marketing is still important...more than important...mandatory for success in the world of consumer products. I am relieved to hear this news. Faux branding is dead. Real branding is about to take its rightful place at the top of the marketing world again. Consumers rejoice.

Watching out for you everyday.

Eli

CNN.com's new website format undermines CNN brand

I was stunned the other day to see a new format for CNN.com. I have religiously read this page everyday for several years as my first source of news and information in the morning.

I found nothing wrong about the old format. I found the information I wanted easily and the site in my opinion was consistent with the brand's television effort...both dependable sources for world news easy to access.

Sure websites need to be updated and tweaked periodically, however, the new CNN.com site is simply awful and a sharp departure from the original...not in a good way.

The site now is weak on news and looks more like a page of advertisements with cute links to rather low level video stories. It no longer speaks "news expert" or "superior source for news and information". It might as well be a tabloid page selling garbage celebrity stories.

I think whomever redid this site has completely lost sight of what the CNN brand is all about. I no longer have it as my home page, having switched to MSNBC.com's home page as an easier to use, more definitive news and information source.

CNN television still remains a good source for news, however, when you start to muck with various brand channels the overall brand strategy starts to fall apart and years of hard work to build the brand can be lost in mere weeks. That is what I think will happen to CNN if they don't immediately fix their website.

This move reminds me of Tropicana Orange Juice's recent major misstep with its package design which made the brand generic and sales dropped enormously and fast. They listened to the market reaction and fixed the problem quickly, saving the brand from a disastrous financial downfall and possible extinction.

Watching out for you everyday.

Eli

Abercrombie and Fitch CEO, Jeffries, the most OVERPAID exec in survey

Teen, young adult retailer Abercrombie and Fitch had been one of America's most successful apparel companies. Despite premium prices, its targets...young men and women (who wanted to aspire to the brand's young, good looking and sexy image) bought its clothing in large numbers. Even older men who kept fit were avid buyers of A and F.

Then the recession hit and it hit A and F big time. The publicly traded company refused to discount its products or have big periodic sales to drive business. Instead, the brand (under its CEO Michael Jeffries) insisted in could withstand the weak economy (and a major drop in sales and profits) by staying the course with its premium pricing and lifestyle positioning.

I generally have been a proponent of consistent branding and NOT falling into the hole of going the discount pricing route to generate traffic and business---it is hard to recover from that move. However, this recession is unlike any we have seen before and with any significant paradigm shift, long held beliefs and business strategies get tested. Evolution of one's brand strategy is the appropriate course these days.

It does appear in today's new economy ( and it will continue I believe even with a recovery) consumers are demanding value and a strategically sound pricing plan (whether its Prada or Levi's or A and F) has to become a part of any brand strategy.

A and F's refusal to alter their business model seems to be causing the brand some major harm. It is no longer the darling of its prime target...on a recent shopping trip across the US, I found A an F stores consistently empty while other competitors for the young market were busy like H and M and Forever 21.

What is amazing is that CEO Michael Jeffries was paid in excess of $71 Million in total compensation last year despite the company's terrible financial performance...he was paid higher than virtually all of his industry peers again despite the brand's significantly declining sales and profits. Why? I'm not sure, but The Corporate Library, a research entity that tracks CEO compensation, has identified Mr. Jeffries as the one of the MOST overpaid CEOs.

Mind you this is NOT a privately held company but a publicly traded one...and one would think and hope that stockholders and Board members would significantly adjust Mr. Jeffries compensation given the company's very poor performance. If I was a stockholder in this company I would be screaming at the board...to take some of his compensation and plow it back into the company's marketing effort. I also find it hard to believe that ethically and morally Mr. Jeffries can justify his compensation. Where are the CEO's who do the right thing and voluntarily reduce their compensation when their companies are doing poorly? I wonder how may employees have lost their jobs and A and F because of the weak economy while Mr. Jeffries still gets paid top dollar?

Watching out for you everyday.

Eli

Corporate Group Travel down dramatically; Will the word "Resort" be dropped from hospitality brand names?

The economy has had an enormous negative impact on bookings at hotels and resorts throughout the US. Especially hard hit have been hotels that cater to corporate groups as business travel has been reduced dramatically across the board.

A recent report indicates this may not be the only or primary reason that hotels that live off corporate business are sufferings so much. Blame the AIG fiasco last year at the St. Regis Hotel in Dana Point, CA. While banks were being bailed out to the tune of billions, AIG executives were partying like it was "1999" at the St. Regis, running up a nearly $500,000 bill. Needless to say the negative publicity this event generated was unprecedented in corporate travel circles.

Since that time the St. Regis Hotel and Resort filed bankruptcy as bookings dropped to such low levels that the facility could not pay its creditors. But the mess hasn't just impacted the St. Regis.

It turns out the word "Resort" in a hotel's brand name or in the parent company's name may now be a kiss of death to that hospitality operation. Apparently, due to the AIG backlash, corporate travel groups are told to avoid bookings at ANY facility that uses the name "Resort" to avoid the possibility of communicating corporate partying vs. real work.

This has hit the top end hotels mostly but even properties with few frills are feeling the impact if their corporate parent's name includes the "Resort" word.

Hotels in South Florida, which has been a popular US destination for corporate retreats and meetings in the past, are complaining heavily that because so many of them are called resorts or affiliated with resorts they are no longer being considered by corporate travel planners.

Will this lead to the dropping of the word "Resorts" from hotel brands? It could if this AIG backlash continues for much longer. One travel planner indicated he was told he couldn't book any meetings with an organization that had the word "resort"  in its brand name--- indefinitely. Wow! If that is true for lots of other travel planners that is very bad news for "resorts" and the hospitality industry in general.

Watching out for you everyday.

Eli

Lack of Civility cuts across occupation, race and political affiliation...is the end of the empire near?

I just felt compelled to write a short piece on what appears to me and many others to be an rapidly approaching end of any type of civility in this country....maybe the world....that reminds one of the decline of the Roman Empire....

Between Serena's  unsportsmanlike/unladylike behavior at the US Open that cost her the match, Kanye West's selfish and inflated ego stage stealing from Taylor Swift at the MTV Video Awards to Congressman Joe Wilson's outrageous outburst during a Presidential speech to congress, ("You lie")....what has become of us, our cultural...more importantly our future? We are in deep trouble and it doesn't look too promising for things to get better.

Watching out for you everyday.

Eli

Brand Reinvention: Defunct retailer brands get new life: Linen and Things revisted

The recession has taken a toll on a whole host of retailers many of whom were well known names in the consumer products industry. Several notables include Polaroid, Sharper Image and home goods retailer Linen and Things.

When Linen and Things went out of business some months ago after failing to recapitalize and restructure out of bankruptcy, many thought it was a dead brand name. Not so. A partnership of Gordon Brothers Brands and Hilco Consumer Capital bought the former retailer's brand and have reinvented it hoping to capitalize on good will, a notable name and a strong loyal consumer base through email addresses.

The new venture is only web based with no effort to launch any brick and mortar stores. The goal to use a lower overhead business model via the internet to regenerate the brand into a profitable one.

Can it be done? Maybe yes, maybe no.

Linen and Things came to life in a robust economy in which consumers couldn't stop consuming especially for their homes. Housing sales were booming and people were spending lots of time in upgraded home environments entertaining and living large. Bed Bath and Beyond created the big box "discount" home goods category and Linen and Things was a me-too follow up.

When Linen and Things business started to waiver, I wrote that one of the reasons it was suffering (and Bed Bath and Beyond was not) was it had no real brand identity. It was just enjoying the spill over from Bed Bath and Beyond and it thrived on sales generated by easily available and plentiful discount coupons (20% off a single item) to spur sales. BB and B also used these coupons, but they were distributed more sparingly. I had at any one time 3 LNT for every 1 BBB coupons. That drove my business to LNT over BBB frequently.

I found the stores very very similar, preferring BBB which seemed to have more higher end goods and an overall better selection. But save for the coupons, I really couldn't see any reason for LNT to exist...other than the sheer volume of people buying stuff for their homes.

As the economy faltered, so did the fortunes of LNT, as has been the case with many me-too brands when consumers cut back spending and the brands with less identifiable reasons for being had little to keep them in business.

Can LNT reinvent itself and succeed just online? I think it can as long as its brand strategists understand they have to create a meaningful reason for being....a pricing strategy that under cuts BBB significantly because the LNT brand's overhead is so much lower?...perhaps offering unique items BBB does not carry that are desired by consumers (yes, consumer interest is key...just carrying different stuff that doesn't sell isn't going to work)....great online service? Top notch experts online or by phone to help with decisions, (BBB is weak in this area both online and in-store)...

I have read that the company is planning to launch a private label brand called, "Linen and Things" as well. That might have some value (if the products are good value) given consumers strong interest in private label brands these days...decent quality and a great price...

Whatever it is, LNT will only succeed online if it develops a core reason for being that resonates with consumers and is significantly distinguished from BBB and any web-only home goods "store". One key competitor in the web only game is Overstock.com which offers an amazing array of home goods for some incredibly low prices. (I recently picked up a high end flatware set for 70% less than a home goods store and 40% less than Amazon.com). So if LNT takes a discount pricing posture they have stiff competition already in the web only marketplace.

I expect more defunct brands to be reinvented but online only.

Watching out for you everyday.

Eli