Coke has pulled an ad featuring Olympic no-show Michelle Kwan, but McDonald's says it will stick with a Wayne Gretzky commercial despite a gambling controversy swirling around people close to him.
Companies that sign sponsorship deals with Olympic athletes can ride their successes to the top of the marketing podium.
But they need to be aware of the potential down side, sports marketing experts say. Medals are never guaranteed. And the potential for controversy is always there -- from injuries to doping scandals to inflammatory comments in the press.
"It's always a bit of a gamble. There's always the potential for an athlete not to perform well -- or in Michelle's case not to perform at all . . ." said Garnet Nelson, managing partner of Altius Sport Marketing in Vancouver, which advises companies on sports sponsorships. "You do have to go into it with your eyes wide open and fully aware of the potential for not a very good performance or a controversy."
Mr. Nelson said brands don't need to suffer when athletes perform poorly. He doesn't believe Ms. Kwan's last-minute decision not to skate for the U.S. because of an injury will hurt sponsors Visa USA and Coca-Cola Co.
And McDonald's Corp.'s brand won't suffer because of the gambling controversy, in which Mr. Gretzky has no direct involvement. Rick Tocchet, the assistant coach to Mr. Gretzky at the Phoenix Coyotes hockey team, has been accused of promoting gambling, money laundering and conspiracy.
Mr. Gretzky's wife, Janet, is alleged to have placed bets. Officials have said betting is not necessarily an illegal activity. Mr. Tocchet has denied the charges.
Mr. Nelson said there is great upside for sponsors when athletes deliver. That's good news for Johnson & Johnson Inc., which is running commercials for its Aveeno products featuring Canadian skier Jennifer Heil, who struck gold for Canada on the first day of the Games.
Johnson & Johnson president Jeff Smith said the company was "very pleased" when Ms. Heil won gold. But he said Aveeno was attracted to her for more than just her potential to win a medal.
"From an Aveeno brand perspective, we went into this more because she fit the values of the brand than the potential to win a gold -- although we knew she had a strong showing in the World Cup events," Mr. Smith said.
He said Aveeno was attracted to Ms. Heil's personality, her smile and the fact that she is an environmentalist. And he said Aveeno would have stuck with Ms. Heil no matter how well she performed.
But when trouble occurs, companies can face tough decisions. Sponsors such as McDonald's and Coke severed ties with basketball star Kobe Bryant when he was accused of sexual assault in 2003.
But most of the time, companies stick with their athletes. Like McDonald's, Ford Motor Co. of Canada Ltd. is standing by Mr. Gretzky (even though he showed up at a press conference Monday in a Dodge, not a Ford vehicle).
Even after bad-boy U.S. skier Bode Miller said in a high-profile television interview that he sometimes races drunk, sponsors including Italian pasta maker Barilla stood by him.
Keith McIntyre, president of Mississauga-based K.Mac & Associates Marketing, said he advises clients to do full due diligence on all athlete deals and to be conservative in costing out the potential value of the sponsorship.
Before the 1998 Games, he was involved with an effort by Cheerios to sign up 10 Olympians with the potential to win gold medals. None of them did.
"What we learned from that is that you want to choose your best team possible, but you've got to build your program" that will ensure a return on investment, Mr. McIntyre said.
Celebrity endorsements
Tying a brand to an Olympian looks smart when the athlete strikes gold. But when controversy hits, that also reflects on the brand.
Wayne Gretzky
Executive Director of Canada's Men's Olympic Hockey Team
Sponsors:
Ford Canada and
McDonald's Restaurants
of Canada
The results:
Sponsors say they will stick with Mr. Gretzky even though people close to him have been swept up in a betting controversy
Bode Miller
U.S. Olympic Alpine Ski Team
Sponsors:
Pasta maker
Barilla and Bretton Wood Ski Resort in New Hampshire
The results:
Sponsors stuck with Mr. Miller even after he admitted in a 60 Minutes interview that he sometimes races drunk.
Jennifer Heil
Canadian Olympic Alpine Ski Team
Sponsor:
Johnson & Johnson
The results:
Ms. Heil's gold medal
performance on Day One
of the Games looks good on J&J's Aveeno, a skincare brand, which features Ms. Heil on television
advertising.
Michelle Kwan
U.S. Olympic Figure Skating Team
Sponsor:
Coca-Cola and Visa USA
The results:
After Ms. Kwan withdrew from the Games, Coke pulled one of its ads referring to Ms. Kwan, while Visa said it is sticking with her.
