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What Every Brand Needs to Think About: The Risks and Rewards of Lance Armstrong's Saga

Posted by Corey Christiansen on January 28th, 2013 at 6:49 pm

As America watched one the most inspiring sports figures of the last century publicly confess to doping charges last week on the OWN Network, we’re reminded of the risks and rewards for brands engaging high-visibility influencers both officially and unofficially. While some of Lance’s large corporate sponsors take slack for sponsoring his doping, other companies are taking advantage of the news cycle with no official affiliation with him.

Every one of Armstrong’s major sponsors ended their endorsement contracts with him immediately after the U.S. Anti-Doping Agency released its report in October. Further, some sponsors are suing Armstrong for breaching their endorsement contracts. These aren’t the only organizations troubled by Armstrong’s confessions, though. Hundreds, if not thousands, of organizations and public figures, including Rick Reilly of ESPN, have unofficially endorsed Armstrong and had their reputations tarnished by his recent confession.

Brand Risks To Consider

While having a celebrity or athlete endorser can substantially increase brand recognition and awareness, there are risks involved with aligning with them. This image taken from a Facebook community page calling for a Nike boycott shows how sponsorships can backfire.

When high-visibility influencers like Armstrong come under fire, companies must evaluate whether the negative actions of their endorser could overshadow the partnership that the brand has with the athlete or celebrity. In some cases, athletes or celebrities will make poor personal decisions that are newsworthy, but don’t necessarily reflect on their talents or their sponsors. For instance, when Tiger Woods cheated on his wife in 2009 and was highly criticized in the news, Nike and EA Sports stuck by him because the allegations had little to do with his ability to golf. In Armstrong’s case, his ability to win races (what he was ultimately sponsored for) is in question, and so there is no longer a reason to sponsor him.

All celebrity and athlete endorsement contracts should have a morals clause that allows the brand’s owners to disconnect themselves when a violation occurs. These clauses can be tough to negotiate, and while they can protect monetary investments, they can’t protect the brand from being tarnished by the endorser’s actions. When negotiating morals clauses, it’s important to consider the actions or behavior covered in the clause and the remedy for a violation. As with any legal contract, you should consult a legal professional.

When publishing content about high-profile influencers or events, it’s not always about endorsements. As a social media strategist, I often find brands taking an unofficial stance on the actions of celebrities and athletes by sharing news on social networks like Facebook. Injecting your brand into the day’s news, or “newsjacking,” is often used by content strategists to take advantage of the increased traffic and engagement associated with newsworthy stories. If done improperly, newsjacking can cause backlashes, as we saw when American Apparel offered a 20% discount to the victims of Hurricane Sandy "in case you are bored during the storm."

At least one business has capitalized on Armstrong’s downfall via newsjacking. In October, Biz Community wrote about a clever newspaper ad by Alpecin that used the headline "A shampoo with a warning for competitive athletes." This timely public service ad made no mention of Armstrong, but at the time of publishing, Armstrong’s doping scandal was top of mind. Two days later, the South African Press Association picked up the advertorial and published a comical news story titled “Hair-loss shampoo a doping risk.” It’s hard to quantify the benefit of Alpecin’s newsjacking tactics, but they earned brand awareness simply by being clever and topical.

Next time your brand decides to leverage a high-profile influencer or story, consider the risks and rewards involved, protect your brand with a morality clause, and plan ahead.

Has your brand successfully leveraged a high-profile influencer or been the topic of a backlash? Share your experience in the comments section below!

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