Celebrity Endorsement Risk Ryan Lochte

Risky Business: The Uncontrollable Heart of Celebrity Endorsement

Celebrity endorsement is typically seen as a huge win. When executed effectively, it can allow brands to:

  • Build trust with consumers who like that celebrity
  • Increase brand relevance and prestige
  • Stand out amidst the clutter
  • Sell more products

What happens, though, when a celebrity represents a brand and messes up on the job, caught in a moment when the brand would not want to be associated? Is it more damaging for the celebrity or the brand?

Let’s take a look — here are three cases when celebrity endorsement went wrong.

1. Ryan Lochte for Ralph Lauren and Speedo

What happened: In 2016, Olympic medalist Ryan Lochte was charged by Brazilian police with filing a false report over an incident during the Olympics in Rio de Janeiro.

Lochte had initially claimed that he and three other US swimmers were robbed at gunpoint at a gas station on August 14 as they returned from a party. He later backtracked on certain details, and the Brazilian police soon alleged that the U.S. swimmers were not robbed and had instead vandalized said gas station.

Brand reaction: Lochte released an apology statement, but Speedo saw the risk and swiftly announced that it would no longer sponsor Lochte. Ralph Lauren followed suit the next week, announcing that it would not be renewing its sponsorship with the athlete.

Outcome: Lochte suffered commercial loss and significantly damaged his image, but Speedo spun the incident into positive press. The iconic swimwear brand donated $50,000 of Lochte’s sponsorship deal to the charity ‘Save the Children’ to benefit Brazilian children.

2. Kate Moss for CHANEL and H&M

What happened: In 2005, British supermodel Kate Moss was photographed snorting cocaine. This photo was plastered on the front page of the U.K. tabloid, Daily Mirror.

Brand reaction: More than half-a-dozen companies distanced themselves from the scandal by dropping Moss from their campaigns, including CHANEL, Burberry, and H&M.

Outcome: Moss came out on top and suffered no long-lasting major commercial damage. Yves Saint Laurent continued to work with her, and the fashion industry as a whole rallied around her.

Only one year after the scandal, Sarah Doukas of Storm Modeling Agency (who discovered Moss) reported that the supermodel’s earnings had doubled. “All press actually is good press in this world we live in,” Doukas said.

3. The NFL and Bose / Beats

This one is a particularly unique case, not involving one single celebrity and not what you would deem a typical example of endorsement gone wrong.

Backstory: In 2014, the NFL signed an exclusive deal with Bose headphones to make them the exclusive headset provider of the league — meaning that all competing products were to be effectively banned from NFL games, locker rooms, press conferences, and official events.

The issue? A large number of NFL players specifically endorse Beats, being paid enough by the brand to never have to worry about dealing with any Bose-related fines.

What happened: In October 2014, 49ers quarterback (and noted Beats advertiser) Colin Kaepernick was fined $10,000 for tuning out league guidelines and wearing Beats before a game. When asked by reporters if Beats would be covering the fine, Kaepernick cagily replied, “We’ll let that question go unanswered.”

Other NFL stars who have been spotted wearing Beats (and not Bose) during NFL events include Richard Sherman, Tom Brady, Dez Bryant, and Cam Newton.

Outcome: Not much has changed. The cycle appears to continue to this day. Why? The NFL’s $10,000 league fine for non-approved apparel is pocket change compared to what Beats is paying the players to endorse their headphones. It is also likely that when a player is fined, Beats simply reimburses them.

Bose appears to be the loser in this scenario — paying for an exclusive deal with the NFL only to be pushed aside by Beats and the players’ natural brand preferences.

The Risky Business of Celebrity Endorsement

Cases like the ones detailed above only go to show that traditional celebrity endorsement can be a risk-laden brand strategy.

It’s not a fully controllable or regulated tactic, and far too often, we seem to forget that celebrities are not faultless. There’s always the danger that the celebrity (being human and generally larger than life) will do something to embarrass the brand in some way.

At the end of it all, the celebrity generally comes out on top, with the risk of endorsement involving only the brand and its highly tailored image.

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