When Advertisers Revolt: A Look at the Biggest Endorsement Breakups

Big Brands Spend Billions on Endorsements

Marketers spend an estimated $50 billion annually on celebrity endorsement deals.

● Why? Sales. Some brands have enjoyed a 20% bump in revenue after securing a high-profile endorsement.

● Endorsements also stand out among the 3,000 or so commercial images we’re exposed to daily. (Source: AdAge.)

Athletes, in particular, earn hundreds of millions endorsing gear they use on the fields of play.

Source: Adgeekdaily.com, Coca-Cola.

But Are They Worth It?

Source: T-Mobile.

Yet big names don’t always lead to big sales ...

● Before there was “T-Mobile Girl,” actress Catherine Zeta-Jones hawked the service, which to this day remains a wireless market laggard.

● Paris Hilton advertised the Carl’s Jr. spicy Six-Dollar Burger only to see struggling parent company CKE Restaurants taken private in 2010.

And, of course, there are the disasters and mistakes to consider ...

Chris Brown and Wrigley

Source: Gawker.

WHAT HAPPENED

The Incident: In early 2009, performer Chris Brown was arrested on a domestic violence charge and later found guilty.

The Fallout: Brown’s song “Forever” had become a jingle for Wrigley’s Doublemint gum. Revelations of his abuse of then-girlfriend and fellow performer Rihanna ended the deal.

Wrigley’s annual ad spend: $584 million, according to the latest available data.

Michael Phelps and Kellogg’s

Source: Kellogg’s.

WHAT HAPPENED

The Incident: Also in 2009, photos of swimmer Michael Phelps smoking what appeared to be a marijuana pipe surfaced.

The Fallout: Rather than cancel its endorsement deal outright, cereal maker Kellogg decided not to renew the contract.

Kellogg’s annual ad spend: $1.12 billion, according to the latest reported data.

William Shatner and Priceline.com

Source: Priceline.com.

WHAT HAPPENED

The Incident: None. Rather, Shatner had spent 14 years as “The Negotiator.”

The Fallout: Despite headlines that declared the company was committing “brand suicide” by offing Shatner’s character, Priceline shares are up nearly 60% over the past year.

Priceline’s annual ad spend: More than $1.2 billion, according to the latest available data.

Lance Armstrong and Nike

Source: Nike.

WHAT HAPPENED

The Incident: After years of denials, in January Armstrong admitted to doping in order to gain an advantage in races.

The Fallout: Banned for life from pro cycling and stripped of all 7 of his Tour de France titles, his former charity, “Livestrong,” also lost Nike as a sponsor.

Nike’s annual ad spend: $2.7 billion, according to the latest available data.

Paula Deen and (Almost) Everyone

Source: The Washington Post.

WHAT HAPPENED

The Incident: An old lawsuit brought forth allegations of the celebrity chef using racial slurs in the workplace.

The Fallout: Several brands dropped their associations with Deen, including The Food Network, which had aired her shows.

Advertisers cutting ties included Home Depot, Sears Holdings, and Target.

Buying to Hold Works in Advertising, Too

Amid a scandal and plummeting popularity, Nike chose to stick with Tiger Woods.

● The golfer is back atop the leaderboard again after years of underperformance.

● Meanwhile, Nike’s Golf sales have recovered, up 8.5% in 2013.

● But the payoff is actually bigger than that. Nike first signed Woods to a $100 million endorsement deal in 1996. Source: Nike.

Revenue has quadrupled since, from $6.5 billion then to $25.3 billion today. Successful endorsement deals with the likes of Woods and Michael Jordan have no doubt played a role.

3 Big Brands With Worldwide Appeal

Nike is the rare American brand whose success with endorsement deals has created global demand for its products. But it isn’t the only one. Two other U.S. stocks are cashing in abroad. Here’s a closer look ...

● One still dominates the fast food landscape here in the U.S., but which may be best known for inspiring a quip in an Oscar-winning film.

● Another has created a whole series of combo fast food joints that mash together different brands in a single store. This company is also slowly improving operations in China.

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