In 1995, I sat with colleagues watching the end of a golf competition on TV on a cold Autumn Sunday in New England. It looked like Tiger Woods would win. Our employer, Acushnet, was his main sponsor and supplied him with balls, clubs, gloves and shoes from their two main brands, Titleist and FootJoy.
We wanted him to win, but not without concern. If he did, he would top the money list for the year and Acushnet had promised him a US$2 million bonus, which was just enough to drop the company’s employee bonus scheme below the profit threshold to trigger payments. Annual bonuses were a big proportion of an annual salary, so the worry was real. In the end, the Acushnet board set aside the rule to allow bonuses to paid as normal.
The following year, Tiger Woods left to join Nike in a five-year, US$40 million deal. Acushnet CEO Wally Uihlein reportedly told Woods that he should take the deal, which Acushnet could not match as Nike was much bigger and growing fast. It could leverage his fame far beyond golf, where their product range was still in development. For quite a few years, he still quietly used Titleist and FootJoy equipment while Nike desperately tried to match the quality, and Acushnet gave him the products without any fanfare.
Further multi-year contracts were agreed with Nike, which has allegedly paid Woods at least US$500 million over their 27-year relationship, which ended last month. The relationship withstood his family breakup in 2009, costing him many other top sponsors like Accenture, and Nike’s exit from the golf market in 2016. His last 10-year deal was signed in 2013. supposedly for US$200 million.
Fast changing markets
Woods is one of a small number of celebrities who have stayed with brands for the long term but the fast-changing nature of markets and of modern communications means that the world of celebrity marketing looks to have changed forever.
Back in the 1990s, the sports market was dominated by Nike and Adidas, with Reebok lagging behind. Not so today. Nike is assailed on all sides by new, fast growing brands and diverse fields of sports and activities where its domination via college teams and professionals no longer functions as powerfully as before. Lululemon and On Running typify new generations of companies and product areas that mean it is harder for one iconic athlete to make as enormous an impact as in the past. Nike’s future growth will be tougher, more competitive and require much more of the clinical approach that has kept Acushnet as the top player in the narrow field of golf.
Communications have also totally changed with social media offering opportunities for clever and witty upstarts to wield enormous power over consumer choice. Celebrities who have had success with social media have become very expensive and often even less predictable than Tiger Woods and Kanye West. “Influencers” use tools not available in the first decade of the Nike-Woods partnership.
YouTube, X, Facebook, Instagram, TikTok and other platforms have revolutionised the marketing space and can swing companies and markets in unexpected directions. The basics of marketing communication remain unchanged, but these tools require much more creative management and can lead to immediate crash and burn for a brand if mistakes are made.
We often hear that all leather requires is to find a good celebrity endorsement, but those days are long over. Tiger Woods will continue to work with other brands and be paid well by them, even although he is now 48 and his golf exposure is restricted, but that work will be formulated in an entirely novel way and run alongside a bundle of other new approaches. The 1990s are long gone, but there is no doubt that for clever, creative marketing teams there exist lots of opportunities to break new ground.
Follow Dr Mike Redwood on Twitter: @michaelredwood
Publication and Copyright of “Redwood Comment” remains with the publishers of International Leather Maker. The articles cannot be reproduced in any way without the express permission of the publisher.