by Walter Bottlick
Putting someone famous in an ad and trying to sell something has become a familiar practice to consumers whether they are watching TV, driving by a billboard, or simply walking down the street. Celebrity endorsement is seen by companies as a practice that can really turn a product into a success and bring in high revenues, simply because they assume people want to be associated with a product that a celebrity appears to use. Often celebrities make huge amounts of money off of these endorsements, and companies see them as ways of saving a product or even the whole company. Does it really work in the end? The unfortunate answer for most of these companies is no. A celebrity endorser cannot just sell any product on the market successfully. Through the examination of an endorsement giant, Michael Jordan, one can see when a celebrity can be successful at selling a product and when he or she cannot be. This all depends on the association the consumer makes between the product and the endorser.
In the debate over whether celebrity endorsement is effective or not, it really just depends on the product and the celebrity. Two rules can be identified. First, the more successful endorsements often have a good connection between product and celebrity that the consumer can easily identify and be persuaded by. Such a connection exists between Michael Jordan and the Air Jordan shoe line, while it doesn’t exist between him and Hanes. The second rule is that in the end celebrity endorsement is also partly a gamble.
Michael Jordan is viewed by many as the quintessential celebrity endorser. Despite his success as a basketball player which people naturally look up to, he and every other endorser depend on a deeper connection they can make with a product in the eyes of the consumer. Many find that they can relate to the early years of Michael Jordan’s story. He was born in Brooklyn, New York, moved to North Carolina, and then played basketball for the North Carolina University Tar Heels. After a very successful career there, he was signed with the Chicago Bulls in 1984 and made a legend of himself through his extraordinary skills as a basketball player (Johnson). He lived the story of a kid coming from a small background to becoming a sports icon through hard work, something that people later can on idolize and respect. His many championship rings, MVP trophies, and scoring titles have immortalized him and made his a very commonly known name, anywhere in the world (Johnson). Jordan embodies what other people would like to aspire to be, especially adolescents who worship his success. This makes him an ideal personality for advertisement. The way companies trying to sell products see it, if their product is associated with Michael Jordan, then the consumers of the world will want to buy them just to have that association (Daye). In Jordan’s case, this tends to be somewhat a correct assessment. The products that he endorses which have no association to him do tend to sell well, something which cannot be said for others in the endorsement game. Despite this, however, the profits of the products with which he does not have an association pale in comparison to those of the products to which he does have a connection.
Many companies have jumped on Jordan’s success and have used him to their fullest advantage when trying to sell products. Some of the brands and stores that Jordan has endorsed have been: Michael Jordan cologne, Nike, Coca-Cola, Chevrolet, Gatorade, McDonald’s, Ball Park Franks, Rayovac, Wheaties, Hanes, MCI, Finnish Line, Sports Authority, Palm, Venator Group, Upper Deck, WorldCom, Oakley, Wilson, and many more. Many of these have seen great success from the use of Michael Jordan, and from the nineties alone he made around 240 million dollars in endorsement money (Johnson and Dukcevich). To delve further into the endorsing world of Michael Jordan and examine his success, one can look into the details of two of his major endorsing brands: Nike and Hanes.
Nike is the one brand that Michael Jordan can immediately be associated with; it is “the brand that he built” (Dukcevich). Jordan’s self-titled basketball shoe line: Air Jordan, has become its own separate division of Nike, bringing in revenues of over 300 million dollars per fiscal year (Johnson). Air Jordans have also set a record for becoming the most expensive sneakers ever, selling for over $200 (Dukcevich). Despite this, there has been no trouble selling these products due to their affiliation with Michael Jordan. Each year they have been continuously flying off the shelves as soon as they come into stock (Dukcevich). Since 1998, Nike’s overall revenues have grown from $8,776.9 million to $19,176 million in 2009. In that eleven year period, Nike has doubled its revenue, in large part due to the sales of the Air Jordan basketball shoe line (Annual Reports: Nike). At its highest point during 2009, Nike common stock shares went for $70.28 (Annual Reports: Nike). This has given Nike the edge over its competitors such as Reebok, who started to make a dent in Nike’s financial empire in 2001 until the return of Michael Jordan to the marketing world. In that year, marketers expected his return to the business game to increase revenues by $170 million in just six months, a goal that his return did meet, putting Reebok back in its place and returning Nike back to the top (Dukcevich). Compared to the shoe brands put out by other basketball stars, such as Allen Iverson, the Nike made Air Jordans are in a league of their own. Unfortunately for Iverson, he was considered to be only the second most popular basketball player in the world right after Michael Jordan (Dukcevich). The difference between being in second and first can be seen in the first day sales when either man releases a new show line. For Iverson, he can see around 15% of his shoes being sold on the first day. Jordan sees between 50-60% of his shoes flying off the shelves as soon as they come out (Dukcevich).
Obviously, Nike has seen huge success due to its partnership with Michael Jordan, but when switching gears to another brand endorsed by Jordan—Hanes—one can see a slightly different story (“Investors”). Hanes is the producer of clothing of all types. A consumer can see Jordan backing Hanes through his men’s underwear commercials which many have come to know and love over the years. These commercials often take on a more comical tone, with Jordan standing alongside actors such as Cuba Gooding Jr. and Charlie Sheen (Johnson). Although in 1998 Hanes was doing well with Jordan and was expecting to surpass $10 million in revenues annually, today Hanes is not nearly as successful as that, and nowhere near as successful as Nike has been with him (“Investors”). Even though he continues to do Hanes commercials, Hanes has actually seen a slow and steady decline over the past six years. Since 2004, Hanes has gone from overall revenues of $4,632,741 thousand to $4,248,770 thousand at the end of the fiscal year in 2009 (“Investors”). At its highest point in the 2009 fiscal year, Hanes common stock was worth $25.98 (“Investors”). Jordan still makes a good amount of money off of his endorsement efforts with Hanes, but their slow and steady fall in overall revenues, coupled with the greatly varying costs of sales which have ranged from $2,871,420 thousand to $3,223,571 thousand, in the past six years have had an effect on their profits (“Investors”). This suggests that there are other factors affecting the sales of Hanes products that override Michael Jordan’s endorsement efforts. These could include the tough financial times that the nation has been going through, a factor that Jordan as an endorser has been able to overcome with Nike, but not with Hanes. This says something about the effectiveness of celebrity endorsement, and leads one to try and look further into such problem.
Generally, Michael Jordan is deemed a successful and effective endorser. Some marketers have used the term “The Jordan Effect” to describe just how much he can change the playing field in sales (Johnson). He is also described as the “10 Billion Dollar Man” due to the overall amount of money that this Jordan Effect has brought in over the years of Michael Jordan’s marketing and endorsement campaign (Johnson). But when it comes down to looking at just Nike and Hanes, there is a big difference between the $4,248,770,000 brought in by Hanes and the $191,761,000,000 brought in by Nike during the 2009 fiscal year (“Investors,” “Annual Reports”). Jordan’s effectiveness in these two areas is answered by Derrick Daye and Brad VanAuken, two professional brand managers and marketers. According to these two, the effectiveness of a celebrity endorser has to do with the association between the celebrity and the product (Daye). In other words, Michael Jordan’s Air Jordan shoe line sells a lot because in this instance he is a basketball player selling basketball shoes. His fame and success in the basketball world become associated with a product that can be directly linked to that (Daye). People see Michael Jordan jumping higher than they ever could in order to make an amazing dunk, and the height of his jump is accredited to the quality and build of the sneakers he is wearing, which, of course, are Air Jordans. People are presented with the message that his success is aided by his shoes, and so the consumers go out and buy Air Jordans in order to try and capture some of the essence that has helped Michael Jordan succeed (Daye). That message does not exist with his endorsement campaign for Hanes. Hanes makes no effort to attribute Jordan’s success in basketball to the type of underwear he is wearing, and even if they did, it wouldn’t be believable.
This is the type of association that Daye and VanAuken explain is so important when using a celebrity endorser. The celebrity needs to have some association between the cause of their fame and the product that they are endorsing if the campaign is to truly be successful (Daye). There are plenty of examples where this has been used properly, and plenty more where is hasn’t. The two look at Tiger Woods,another successful and famous sports star, and present a situation similar to the one between Michael Jordan, Nike, and Hanes. When Tiger Woods began to endorse Nike golf balls, their sales shot through the roof, because golfers make that connection between Tiger Woods’ success on the green and the type of ball he is using. On the other hand, Tiger Woods also endorses Buick, a partnership which has not worked out too well because there is no connection between the two (Daye). Celebrities can make or break a product according to Daye and VanAuken, and oftentimes using celebrities can be very risky if they mess up in their lives outside of the endorsement. Some examples cited include James Garner, who attempted to sell beef products until he had a heart attack and triple bypass surgery; Kobe Bryant, who lost his endorsement deals with McDonald’s, Sprite, and Nutella when he was charged with sexual assault; and Martina Hingis, a tennis star who ended up suing the Italian tennis shoe company she endorsed because she claimed they were the cause of the injuries she received (Daye). In the end, Daye and VanAuken conclude that, while there are some endorsement stars who can make good connections to products and help the sales, for the most part celebrity endorsement is a waste of money that is more often hurtful to a company than it is helpful (Daye).
In the end, celebrity endorsement is partly a gamble; the celebrity could be like Michael Jordan, who can in fact promote a product that has nothing to do with basketball effectively. Despite the Hanes example, he has been very successful with other products such as Oakley and his cologne. On the other hand, the celebrity could be like Michael Vick, who seems promising until he turns out to be running illegal dog fights, thus helping to soil not only his name, but also the names of the products he endorses.
“Annual Reports: Nike’s Performance.” Nike. Nike Inc, 2009. Web. 9 Nov 2009.
Daye, Derrick, and Brad VanAuken. “Celebrity Endorsements: Selling
and Unselling.” Branding Strategy Insider. The Blake Project, 19 March
2008. Web. 12 Nov 2009.
Dukcevich, Davide. “The Michael Jordan Portfolio .” Forbes Magazine, 28 September 2001. Web. 9 Nov 2009.
“Investors.” Hanesbrands Inc. Hanesbrands Inc, 05 March 2009. Web. 9 Nov 2009.
Johnson, Roy. “The Jordan Effect The world’s greatest basketball
player is also one of its great brands. What is his impact on the
economy?.” Fortune Magazine, 22 June 1998. Web. 9 Nov 2009.