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Should Advertisers Shun Celebs?

8/22/2015

5 Comments

 
by David Hagenbuch, Founder of Mindful Marketing
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By now you’ve heard the disturbing news about iconic Subway spokesman Jared Fogle, who has admitted to possessing child pornography and soliciting sex with minors.  Not surprising, Subway quickly ended its relationship with Fogle, saying “Jared Fogle’s actions are inexcusable and do not represent our brand’s values.”

It’s hard to remember now, but when Fogle first became a pitchman for the sandwich chain in 2000, he wasn’t famous but a rather average American who had lost an exceptional amount of weight (245 lbs.) thanks to a diet steeped in Subway.  Fogle’s story was perfect promotion for the restaurant, which for many years used his example to position itself as the healthier, good-tasting alterative to typical fast food.

Not that Fogle deserves all or even most of the credit, but before he became the chain’s main spokesperson, Subway had around 14,000 stores worldwide.  Fifteen years later its store total had ballooned to over 43,000, making it the world’s largest restaurant chain in terms of number of locations.  Meanwhile, like certain other current celebrities of note, Fogle had become famous for being famous.

Of course, Fogle is not the first celebrity spokesperson to fall precipitously from grace, much to the chagrin of their corporate sponsors.  A few other celebs who reputations and endorsement deals have taken dives not long ago include sports stars Adrian Peterson, Tiger Woods, and Michael Phelps.  Fogle’s failing will likely eclipse all three of these, however, putting him on par with the likes of OJ Simpson.

Given that Fogle has been the face of Subway for 15 years, it will be hard for even the most forgiving folks to forget his insidious acts when thinking of Subway.  That negative association could lead to backlash against the chain, the extent to which is difficult to estimate.  Such potential fallout makes it fair to ask whether it’s worth it; that is are companies better off not using celebrity endorsers?

First, there are many product categories that have no compelling need for celebrities, for a variety of reasons, like low potential for good product-personality fit (e.g., copy paper), little affinity among target market members for those who are famous (e.g., Matures, 68+), and lack of scale or scope (e.g., a local grocery store).

Still, there are certain situations in which celebrity endorsements do seem to make a difference.  For example, star athlete signings apparently have paid off for several major sports apparel companies.  In a recent court case, for instance, the market value of the Jordan name was reported to be worth at least $480 million to Nike.  Also, a few weeks ago Adidas stole Houston Rockets star James Harden away from Nike with an endorsement deal worth $200 million over 13 years, which also suggests that such sponsorships offer stakeholder value.

When a celebrity like Fogle falls, however, his public flailing bruises the reputation of his corporate sponsor, to at least some degree.  So, should Subway have steered clear of Fogle in the first place?

Subway likely had little reason to doubt the integrity of Fogle when the company came across his unique weight-loss story 15 years ago.  Fogle had recently been a student at Indiana University in America’s heartland, and at the time may or may not have practiced the behavior that will likely land him behind bars.  In any case, it would have been virtually impossible for Subway to know such details of Fogle’s private life, especially when one considers that Fogle’s wife, who shared the same house, said that she was “extremely shocked and disappointed by the recent developments involving Jared.”

It’s very upsetting that Fogle apparently used the status and wealth he gained from endorsement fame to commit such unspeakable acts.  Subway, however, appears to have acted in good faith.  The company could not have reasonably known about Fogle’s well-concealed, dark secret.  However, it did establish that his experience of dramatic diet-induced weight loss was legitimate, and the restaurant chain responsibly shared that story in its promotions, which helped revolutionize thinking about healthy eating—an important societal value.

Despite their larger than life personas, celebrities are humans and equally susceptible to sin.  That potential to fail, however, does not absolve them or any of us from trying our hardest to avoid objectionable acts, particularly the kinds that have devastating impact on others.  Likewise, companies that use celebrity endorsers need to exercise due diligence in screening their spokespeople.

All that said, in its dealings with Fogle, Subway twice demonstrated “Mindful Marketing”: first by identifying him as a credible spokesperson in 2000 and second by decisively ending their endorsement relationship a few weeks ago.


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5 Comments
Jay
9/1/2015 10:46:47 am

I found this blog very interesting. I do agree with you that it was a mindful thing to pick and later on end the sponsorship with him and that companies should either terminate their sponsorship if they do not wish to be associated with their celebrities actions. It is a give and take with sponsoring celebrities because you get both the good and bad. Most view the good, which would be the marketing value that they may create (or even stakeholder value). The bad is that they also come with their individual sins and secrets that a company may not be able to screen for or even notice, but that is where they company must choose to proceed with the sponsorship or terminate it.
All together, I would say that I do agree with most of this post and think that it is an interesting topic to bring up.

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David Hagenbuch link
9/2/2015 02:45:40 am

You're right, Jay. Celebrities can really be a mixed bag . . . some more than others.

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Jonathan link
9/23/2015 10:42:24 pm

i believe that this blog introduces a very good subject for discussion. celebrity endorsement is nothing new and has been going on for many years. sometimes however certain circumstances arise and the company and celebrity go their separate ways. in the case of Jared Fogle and Subway, it was nothing more than Subway deciding that Jared was no longer a person that they wanted to represent their brand. Since companies pay celebrities to endorse their brands, it is only fair that they have the ability to cut ties with those celebrities if they feel that those certain people no longer can accurately represent the companies values. while celebrities have a lot of say in today's society, they are still human and therefore they need to take responsibility for their actions and decisions. whether they know it or not, celebrities' decisions affect countless lives including the companies that pay for their representations.

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Jacob Reeves
10/21/2015 10:12:22 pm

I thought this blog was very interesting and brought up a good question. Should companies endorse celebrities for more publicity? I agree that in Subways situation they did everything the right way. Jared was not even a celebrity when they found him and Subway basically made him what he was. There was no way of telling that he would ever bring about bad publicity for the company, but people are unpredictable. If companies are going to use celebrities for more publicity, then they ought to keep very close tabs on them or just not use any celebrities at all.

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Yousun Song
10/27/2015 07:25:23 pm

Celebrities are human beings and make mistakes or sins as well as other people do. As being a representatives of the brand, they should have been more careful about their actions, but since it happened already, the firms should decide on what to do next. Like the author mentions, Subway was smart on their decision of recruiting Jared Fogle as their spokesman, and even smarter when they ended their endorsement with Fogle. When Applebee stood for their employee who had an unacceptable attitude toward the customer, many people gained negative impacts on Applebee. It is wise for the firm to make a right decision rather than covering up the problem.

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