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Should Sponsors Forgive Lochte?

8/27/2016

by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

To err is human, to forgive . . . is not something that most sponsors are willing to do. That’s what defamed Olympian Ryan Lochte recently realized, as have many other deposed endorsers whose sponsors quickly dropped them because of bad behavior. So, is one bold new sponsor right to give Lochte another lease on his endorsement life?

As companies have become increasingly skeptical of spokespersons’ abilities to keep their private lives under control, most endorsement contracts now include morals clauses, which offer advertisers an easy way out of their obligations when celebrities’ personal behavior tarnishes the reputations of their organizational underwriters. Such contract additions are legally expedient, but should companies exercise them? Doesn’t everyone deserve forgiveness?

Thanks to Lochte’s public drunkenness, vandalism, and deception involving the gas station incident in Rio, the twelve-time Olympic medalist has become a four-time released spokesperson. Speedo, Ralph Lauren, Gentle Hair Removal, and Airweave have all dumped the scandal-struck swimmer. Of course, Lochte is only the latest in a long line of celebrities who advertisers have dropped because of moral infractions. Other notable castaways include Lance Armstrong, Paula Deen, Bill Cosby, Tiger Woods, and even Lochte’s Olympic teammate, Michael Phelps.

Yes, in the wake of his unbelievable Rio Olympic performance, some have forgotten that Phelps had more than one moral meltdown that put him at odds with the law and advertisers. In 2009, the swimming legend was photographed using a marijuana pipe, which cost him the support of Kellogg’s. Then, in just December of 2014, he pled guilty to driving under the influence for the second time in ten years. Yet, despite these ethical issues, several sponsors have stuck by Phelps, including AT&T, Speedo, and Visa.

Maybe, then, it’s appropriate that a new sponsor has already decided to support Lochte, just a couple of weeks after his revelry in Rio. Lochte plans to appear in a series of print ads for Pine Bros., maker of “softish” throat drops. The campaign will be based on the theme of forgiveness, suggesting that Pine Bros. drops are “forgiving on your throat.”

What should we make of Lochte’s new endorsement deal? First, it’s hard to know the motives of Pine Bros. Perhaps the company is truly interested in encouraging compassion and helping Lochte bounce back from the bad behavior he has exhibited, not just in Rio, but also at other times. According to CNN, in 2005 and 2010, Lochte was cited three times and arrested once for crimes that included trespassing, urinating in public, disorderly conduct, and fighting in public.

Yes, everyone deserves to be forgiven, but forgiveness doesn’t mean that: 1) people escape the consequences of their actions, 2) offenders are enabled to repeat their behavior, or 3) others are encouraged to commit the same acts. Unfortunately, Pine Bros. sudden support of Lochte allows all three of these outcomes by: softening the financial hit on Lochte of the other lost endorsements, empowering him to continue illicit acts, and suggesting that such abhorrent behavior is acceptable for others. In addition, Pine Bros.’ fast funding, while an investigation of the incident is still underway, shows little empathy or respect for the Olympics, the nation of Brazil, or the owners of the gas station that Lochte despoiled.

But, isn’t Pine Bros. bold move good marketing? By linking with Lochte, the company is buying buzz that’s hard to match. If it’s true that any publicity is good publicity, Pine Bros. may realize some benefit from the sponsorship, but more likely the advertising campaign will collapse. The idea that the drops are “forgiving on your throat” is a weak unique selling proposition expressed in an awkward theme. In terms of AIDA, the use of Lochte may generate some attention and interest for Pine Bros., but the illogical pairing of throat drops and a scandal-ridden swimmer is unlikely to produce much desire for the product or action.

On the surface, Pine Bros.’ attempt to forgive Lochte seems commendable, but diving deeper into the sponsorship implications reveals weak values propelled by poor promotional strategy. As a result, Pine Bros. and Lochte have sunk to the level of “Mindless Marketing.”

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Advertising Rules Help the Olympics Win

8/19/2016

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Watching the Rio Games, we’ve not only seen some of the world’s best athletes run, jump, and swim, we’ve also seen some of the world’s biggest companies advertise, sponsor, and promote. That commercial content helps make the Olympics possible, but has the International Olympic Committee (IOC) made such exposure at the Games too exclusive?

This question raced to the front of many minds recently when Olympic steeplechaser Emma Coburn made U.S. track history, winning a bronze medal. Before Rio, no American woman had ever medaled in the event, but what Coburn did after the race was also remarkable—she took off her spikes, tied them together, and slung them over her shoulder as she strode along the track.

Although most runners don’t remove their shoes right after a race, what made Coburn’s action significant was not her bare feet but the New Balance logos on her spikes, which were suddenly in clear sight of spectators, the media, and their cameras. Coburn is an outspoken supporter of her sponsor, New Balance, so it seemed this atypical act was aimed at elevating her underwriter on athletics’ highest stage. Coburn also mentioned New Balance in a post-race press conference.

While it’s refreshing, in an age of entitlement and self-centeredness, to see true expressions of gratitude, Coburn’s post-race behavior likely ran afoul of the intent of Olympic promotional policy, specifically By-law 3 to Rule 40 of the Olympic Charter, which states: “Except as permitted by the IOC Executive Board, no competitor, coach, trainer or official who participates in the Olympic Games may allow his person, name, picture or sports performances to be used for advertising purposes during the Olympic Games.”

The reasons for this “blackout” rule are multifold. For one thing, the mandate aims to maintain the Game’s focus on the athletes and to keep the Olympics from becoming over-commercialized. There’s also a very practical purpose: The IOC needs to preserve the Game’s revenue stream, 90% of which “goes to the development of athletes and sports organisations at all levels around the world.” The promotional podium of the Olympic has limited space.   If non-authorized advertisers try to stand atop it, the platform becomes overcrowded and sanctioned Olympic sponsors lose out.

A historic case of such party-crashing occurred twenty years ago at the 1996 Atlanta Games. Although Reebok put down a reported $50 million to become an official Olympic sponsor, non-sponsor Nike stole the spotlight with several unconventional marketing tactics: It outfitted legendary U.S. sprinter Michael Johnson with his now-famous golden Nike spikes, which were later featured on the cover of Sports Illustrated; it opened a grandiose “Nike Centre” right next to the athletes’ village; and it distributed flags to fans.

According to Adweek, it was Nike’s actions in Atlanta, more than anything else, that led the IOC and the United States Olympic Committee (USOC) to enact the very strict regulations that are in place today. Now companies that aren’t official sponsors are prohibited from saying “anything even vaguely evocative of the Olympics,” e.g., Rio or gold medal. Athletes, however, may be included in generic ads during the blackout time, provided that they don’t explicitly reference any of the Olympics’ intellectual property.

Nike became an authorized sponsor for the 2000 Sydney Games and since has had a long-standing official Olympic relationship, including in Rio where Nike has been a Team USA Domestic Sponsor, along with the likes of Citi, Kellogg’s, and Hershey. Ironically, it’s now Nike, which outfits many American Olympic athletes, that stands to lose from unauthorized marketing tactics, like those of Coburn for New Balance.

Olympic athletes are allowed to wear whatever brand they personally prefer when it comes to sunglasses, watches, and shoes, so Coburn was well within her rights to wear New Balance on her feet. By hanging her spikes over her shoulder, however, she transformed her footwear into advertising signage, which is out-of-step with IOC rules.

Maybe, though, Olympic promotional policy is unjust. After all, what would the Games be without elite athletes like Coburn, and how can athletes, particularly those hailing from non-paying sports, ever get that good unless someone supports them? Of course, the most likely supporters are companies, which need to receive advertising exposure in return. So, shouldn’t the IOC be more accepting of Coburn and other athletes who want to thank the firms that fund them?

The preceding point is a good one. Dependency does exist among the Olympics, the athletes, and their personal sponsors. However, that relationship does not provide enough reason to allow the Games to descend into advertising anarchy. As suggested in the Olympic charter, a primary appeal of the Games is that athletic accomplishment outshines commercialism—something that’s not always true in professional sports where venues are saturated with signage and some players’ jerseys even contain ads. In marketing terms, limited promotion for the Olympics is a powerful positioning tool.

Despite their wide embrace of advertising, even professional sports leagues like the NFL, NBA, and MLB know that official sponsors need to be protected, partly to preserve those lucrative revenue streams, but also to prevent competitions from becoming commercial mêlées in which every athlete advertises his/her personal sponsors on the same stage, at the same time. A classic example of the NFL’s restrictions came in 1986 when Commissioner Peter Rozelle fined Chicago Bears quarterback Jim MacMahon $5,000 for wearing an unauthorized Adidas headband.

Yes, Rule 40 of the Olympic Charter likely costs athletes and their personal sponsors some income in the short-run, but the promotional policy is certainly in the best long-term interest of the Games and all its stakeholders, including consumers. Good, enforced rules are a key component of any successful sport. They’re also an important part of profitable and positive promotion, which ultimately makes them “Mindful Marketing.”

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Size Suspense

8/13/2016

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Variety may be the spice of life, but standardization makes life manageable. Think of all the products we use daily that work only because many different manufacturers have made their products compatible: K-cups, DVDs, light bulbs, batteries, etc. Then, there’s clothing.

Why do many of the products we wear each day vary so much in their sizing? The numbering systems they utilize should produce pretty consistent results across different suppliers; however, it’s not uncommon to find a pair of men’s 34” waist pants in one brand that are much bigger than the same size of another label.

Although men face some sizing snafus, what they experience pales in comparison to what most women endure in trying to find clothes that fit. Of course, women’s bodies come in many more shapes and sizes than men’s do, which makes it truly remarkable that designers claim to capture multiple anatomical variations in a single sizing digit, e.g., 8, 10, etc. A video by Vox provides a great summary of how such sizing came to be.

As if the single-digit system weren’t ambiguous enough, enter vanity sizing. It’s not surprising that many women want to wear smaller-sized clothes, given the emaciated models found in media and steady social pressure to be thin. Apparel makers recognize this desire, and some have decided to cater to it by revamping their sizing systems so their clothes are cut bigger. For instance, women who used to wear a size 6 can now fit into a 2, and those who had sported a 4 might don a double zero. The idea behind vanity sizing is to play upon people’s preference to think they’re thinner than they actually are.

Many people have long suspected manufacturers of vanity sizing, perhaps based on their personal experience, but is there proof that the strategy actually exists? Yes, the evidence is ample. For instance, a reporter for Vox documented her purchase of jeans of the same size from three different retailers, Forever 21, Topshop, and Zara, and showed how vastly different the widths were among them. Similarly, a writer for Esquire found that the actual waist measurements of men’s pants were sometimes as much as five inches bigger than their marked sizes.

If neither of those examples is convincing, checkout charts from the Washington Post which show how, over several decades, sizes have gotten smaller at the same time that people have become bigger. In 1958, for example, a size 16 fit a woman with a 29 inch waist, but in 2011, the same size fits a woman with a 36 inch waist.

So, there’s little question that many manufacturers have kept their sizes the same while making their clothes bigger in an effort to make consumers feel smaller, but couldn’t such vanity sizing be a good thing? In an age of body shaming and eating disorders, why not let people think they’re thinner than they actually are? In fact, a study in the Journal of Consumer Psychology found that vanity sizing was associated with positive mental imagery and improved self-esteem.

Unfortunately, any positive effects of vanity sizing are short-lived; instead, the strategy may be doing significant damage in other ways. Vanity sizing only works for so long. Eventually people realize that a size 4 is no longer as small as it once was, and they redefine what represents a thin size and what does not.

As suggested above, consumers also often experience frustration in dealing with significant size variations among manufacturers. It’s a waste of time to unnecessarily try on different sizes in order to finally find one that fits. The frustration can be even greater when shopping online, where realizing the right size might involve a series of shipments and returns.

Probably the biggest potential problem with vanity sizing, however, is the false sense of fitness it may give people. In the United States, nearly 69% of adults are either overweight or obese; almost 36% fall into in the latter category. With obesity comes increased risks for health problems such as high blood pressure, heart disease, high cholesterol, stroke, and some cancers.

Certainly people should consider their actual weight and their doctor’s diagnosis when determining their healthiness; however, it’s not unusual for people to use quick and convenient metrics like the fit of their clothing to decide whether or not they are overweight. Deceptively sized apparel does a disservice to consumers and can have physically damaging outcomes.

Given the detrimental impacts of vanity sizing combined with little promise of creating stakeholder value for marketers or consumers, there’s little question that vanity sizing measures up as “Mindless Marketing.”

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Too Easy to Order?

8/5/2016

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Technology makes our lives easier in many ways. For instance, Smartphone apps can help us find a nice restaurant, give us directions to it, and tell us what to eat while we’re there. Is it possible, though, that technology can make some activities too simple? Amazon’s Dash Buttons, may be one such example.

A couple of years ago, the world’s eighth largest retailer introduced “Amazon Dash,” featuring a handheld device that contained a barcode scanner and a voice recorder. The small smart stick communicated with the Amazon Fresh website and smartphone apps to help consumers more easily purchase over a half million products from the iconic internet marketer.

Although Amazon billed Dash as “Shopping Made Simple,” apparently it wasn’t simple enough. A little over a year later, the company introduced for its Prime members the Dash Button, which made ordering a variety of common household products like detergent and toilet paper as easy as hitting the snooze on your alarm clock.

Each Dash Button, which is just a couple of inches long, displays the logo of the specific brand to which it is tied. Consumers use their Wi-Fi connected smartphones to configure the specific product and quantity they desire, and they place the buttons near the locations where consumption occurs, e.g., on a washing machine. Then, when their supply starts running low, a press of the button sends an order to Amazon, generates an alert on the consumer’s account, and gets the product delivered to their door within a couple of days.

So, how have Dash Buttons been doing? By Amazon’s account, very well. Over a three month period earlier this year, the company saw Dash Button orders double in frequency from one per minute to two per minute, representing a total increase in orders of over 70 percent. This success has inspired the retailer to add 50 more brands to the list of those available with Dash buttons, including Campbell’s Soup and Cascade dishwashing soap. What’s even more interesting is that Amazon also has added certain toys to the collection, making it possible to press a button and receive a replenishment of Nerf darts and Play-Doh.

Despite the Dash Button’s apparent success, not everyone is singing its praises. One of those people is Mark Wilson who challenged himself to live with a Dash button in every room of his home. The experience left him cynical about Amazon and led him to conclude that although the concept may be good for the company, it signals a “futile” future for consumers. Here are several of his Dash Button concerns:

There’s no immediate gratification. Although we’re used to pressing buttons and getting rapid results, products ordered via Dash Buttons usually take a couple of days to arrive.
Product selection is very limited. Only 150 brands are available with Dash Buttons now, and each of those only has a small set of product options.
People are paying to hang up advertisements in their own homes. Usually companies bare the cost of advertising exposure, but by charging consumers $4.99 for each Dash Button, Amazon has found a subtle way of flipping the business model.
The products are generally expensive. Consumers gain convenience, but they forfeit the ability to use coupons or take advantage of special deals.

Although each of Wilson’s critiques has some merit, I don’t find the first two particularly compelling: There are other ways of satisfying needs for immediate gratification and larger selection, albeit, not as convenient as pushing a Dash Button. People wanting the former benefits have other purchase options.

However, Wilson’s suggestion of intrusive advertising is a very legitimate concern. What will our homes, workplaces, etc. be like if they become plastered with logo-laden buttons from Amazon and other companies? The commercial blitz may be unbearable.

Also concerning is Wilson’s fourth point, which he summarizes with the following statement: “The Dash button is an unabashed attempt to disconnect customers from the amount of money we're spending.” Although they’re not the most important things in life, buying and selling are significant human activities that shouldn’t be taken lightly. The money we have and the things we own impact our persons.

Yes, we make many routine purchases that don’t deserve much of our time or attention (e.g., bread, detergent, deodorant, etc.), but it can be dangerous if we treat other purchases too flippantly. For example, what lesson do children learn about the value of money when they observe it only taking the push of a Dash Button to get more Nerf Darts and Play-Doh?

As Wilson suggests, such monetary detachment can also happen easily for adults. Overspending on credit cards is partly a problem because paying with plastic is less painful for people than handing over cash. Studies have shown that people will buy more when using credit cards vs. hard currency. How much easier will overspending and compulsive consumption become if people start making substantial, non-necessity purchases with the push of a button? It seems like Dash Buttons could easily encourage reckless spending, undermining principles of stewardship.

The growth of Dash Buttons suggests that they currently create stakeholder value for both Amazon and its users. However, broader societal concerns related to commercial intrusion in our homes and unbridled consumption make the buttons an example of “Single-Minded Marketing.”

Subscribe to Mindful Matters blog.
Learn more about the Mindful Matrix and Mindful Meter.
Check out Mindful Marketing Ads and Vote your Mind!

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Should Sponsors Forgive Lochte?

Advertising Rules Help the Olympics Win

Size Suspense

by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Too Easy to Order?

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