Duets Blog : Creativity and the Law: DuetsBlog

Each of the brands that employed Woods was placed in an undesirable predicament. This was not a situation where there was one right answer. Each of the brands had to consider how Woods as an endorser fit into their marketing communication strategy. Because each of the brands approached the situation from a different perspective, that is why there were a number of different reactions to the situation. I don't think any brand has made the wrong decision yet in evaluating Woods’ future viability as an endorser.

Nike has made the decision to stay with Woods for the time being. Nike President Phil Knight is choosing to take the long view, as he believes that this incident will be a “minor blip” in the career of Tiger Woods. I fully support Nike's wait and see approach with Woods. Nike took that approach when Kobe Bryant endured consequences for his extramarital affair in 2003-04. Kobe Bryant's situation was more severe, as criminal charges were filed. Eventually, charges were dropped. At that point, Nike and Kobe Bryant resumed their relationship. Nike has shown over time that only athletic performance matters for the most part. From their perspective, off the field issues are relevant when an athlete is convicted of criminal behavior.

Nike has a huge commitment to Woods. Before Woods, Nike’s involvement in golf was extremely limited. Nike Golf has tied itself to Tiger Woods, and Nike is a brand that is defined by excellent athletic performance. Nothing about Woods’ behavior has changed the fact that he is one of the greatest golfers ever. 

Gillette and Tag Heuer made decisions to pull Woods from their advertising campaigns. Neither company has officially dropped him, but both (see here and here) chose to indefinitely suspend him. Both were initially attracted to Woods due to his winning performances on the golf course and they felt that their target consumers perceived that he had a charismatic personality that would benefit the brands. Due to the fact that athletic performance was not the sole reason for Woods’ presence, they wanted to wait and see how this situation would play out. However, they didn’t want to associate with him in the near term, for fear that his presence could damage brand equity.

Gatorade dropped Woods, but PepsiCo said the decision was made before the scandal broke. Gatorade has had a lot of branding problems in the last few years (see here and here). They have much bigger problems than Woods' recent behavior.

Accenture and AT&T both severed relationships with Woods (see here and here). Accenture's decision to drop Woods is unique in the domain of athlete endorsement. Companies will usually not terminate deals unless criminal charges are filed. Companies are prepared for behavioral contingencies, as most endorsement deals have a "morals clause". The "morals clause" likely helped Accenture escape the contract. Accenture strongly tied itself to Woods, a strategic decision that has to be questioned. Tiger Woods doesn’t have expertise in aspects of management consulting, a primary function of Accenture’s business. They also based their ad campaign around the slogan, “Be A Tiger”. "Be A Tiger" doesn't bring up as many positive connotations as it once did. As for AT&T, they dropped him, giving no indication that there will be a future celebrity product endorsement relationship. The AT&T logo is highly visible on Woods’ golf bag and they also sponsor the Tiger Woods Golf Tournament. AT&T is not primarily attracted to Woods the athlete, so it was a simple decision to let him go.

The second perspective of Tiger Woods concerns Woods’ ability to earn money in the future as an endorser. The events of November & December 2009 turned Tiger Woods from an ordinary, albeit highly talented golfer into a Mike Tyson-esque side show. Very few celebrities have fallen as far and as fast of Woods. Nevertheless, it is important to note that Woods didn’t do anything illegal. Extramarital affairs are commonplace. As a result, the Tiger Woods brand will survive as long as he remains one of the best golfers on the planet.

A good precedent for the current situation with Tiger Woods is Kobe Bryant. In 2003, Kobe Bryant had an extramarital affair and sexual assault charges were filed. In 2004, those charges were dropped. Kobe Bryant has been able to secure endorsement deals in the ensuing years. However, Bryant has not been seen endorsing McDonald's and Sprite, brands that are intended for wider audiences. I ultimately believe that Woods will remain a valued pitchman for brands where only athletic performance matters. Brands that take into account personal behavior will shy away from him for the foreseeable future.

Woods’ recent behavior has gotten him one job offer. Movie director Todd Phillips, best known for directing “Road Trip”, “Old School” and “The Hangover”, has offered Woods a role in “The Hangover 2”. This makes the aforementioned comparison with Mike Tyson even more apt, because Mike Tyson had a hilarious cameo in “The Hangover”. Also, an actual tiger played an important role in the plot development of “The Hangover”. However, I don’t believe that Woods will accept Phillips’ gracious offer. He and his PR team probably do not believe that “The Hangover 2” is an appropriate venue for image rehabilitation.

The steps that Tiger Woods takes to rehabilitate his personal image will determine how successful he will be in luring companies to pay him to endorse branded products. I believe that image rehabilitation is certainly a realistic goal. Other celebrities have bounced back from more devastating circumstances. Kobe Bryant went from having sexual assault charges filed against him as a result of an extramarital affair to earning $16 million in endorsements in 2007. Baltimore Ravens linebacker Ray Lewis pled guilty to obstruction of justice in a murder investigation and was able to secure endorsements after his plea agreement. The common thread between Bryant and Lewis is that they continued to be among the best players in their respective sports. If Tiger Woods remains a dominant golfer after his self imposed hiatus and he is able to downplay stories about his life off the golf course, he will receive lucrative endorsement deals in time. The roar of Tiger Woods will continue to be heard in the branding universe.

—David Mitchel, Norton Mitchel Marketing

I commend Gatorade for shifting their philosophy in 2010. In 2010, they will redefine their target consumer. Their 2010 efforts will focus on the serious athlete that desires peak athletic performance. This is closely aligned with their origins. For many years, Gatorade has tried to widen their audience, and not succeeded. It is very difficult to be all things to all people, and a laser focus on a specific group of people is a strong strategic approach.

The best decision that Gatorade made for 2010 is to remove high fructose corn syrup from all of their products. A few years ago, Gatorade changed the sweetener from sugar to high fructose corn syrup. The nutrition value (or lack thereof) of high fructose corn syrup has been intensely debated in recent years (here, here and here). Many attribute high fructose corn syrup to causing higher rates of obesity. It is not smart strategy to use an ingredient that can be perceived as harmful to health, particularly when your target consumer is athletic and health conscious. This move gives Gatorade a competitive advantage over chief category rival Powerade. High fructose corn syrup is an ingredient in Powerade products other than Powerade Zero (low calorie version). It also falls in line with the Coca-Cola model of returning a product to the original formula.

Gatorade is planning to revamp their packaging, for both G and the lower calorie G2. Packaging was a key reason why Gatorade struggled in 2009. Consumers did not recognize the nebulous “G” packaging and had no perceptions of the meaning of the “G” brand. The decision to redevelop the packaging is correct. The execution is likely to be a failure. Recently, PepsiCo has redesigned the packaging on the Pepsi line of products and Tropicana. Both redesigns were poorly conceived and executed. There was such a strong backlash against the Tropicana redesign that PepsiCo quickly reverted back to the old packaging. With regards to Gatorade, the only acceptable package redesign is a reversion to classic Gatorade packaging. If the packaging does not resemble classic Gatorade packaging, they will be wasting time and money.

The worst aspect of Gatorade’s 2010 marketing strategy is the expansion of the product line. A product line extension should accomplish at least 1 of the following 2 things: expand the size of the market and/or expand the number of a brand’s product offerings that a given consumer purchases. Gatorade’s line extension will not accomplish either.  By adding the “Prime” and “Recover” beverages to the existing product line (G and G2), Gatorade now has at least 4 distinct segments of their product line. It is bound to cause consumer confusion.  Generally speaking, it is difficult for consumers to perceive how the brand’s multitude of products is going to benefit them. Because of this confusion, consumers are more likely to choose a simpler alternative. This strategic problem is augmented by the current economic climate. Asking the target consumer to adopt product line extensions in the worst recession since the Great Depression is a recipe for disaster. Through this decision, Gatorade is showing how out-of-touch they are with their target consumer.

Gatorade’s stubborn refusal to return to its roots and provide simplicity in its branding strategy will continue to damage brand equity and negatively impact revenue. In the first four decades of its history, Gatorade had all of the makings of an iconic brand. The product was consistent, as well as the overall themes of the marketing communication messages. Consumers perceived the brand as valuable in its category. This is similar to iconic brands such as McDonald’s, Nike, Budweiser, BMW and Crest. Coca-Cola also fits this description, with the exception of a period of temporary insanity in the mid 1980s. Coca-Cola remains the best precedent for Gatorade, but Gatorade continues to reject their methodology in restoring a classic brand after an ill-conceived revitalization.

—David Mitchel, Norton Mitchel Marketing

I don’t play golf, and I’m not a Tiger Woods fan, but his accomplishments on the golf course are both incredible and undeniable. I wouldn’t defend his actions. He hurt himself, his wife and their children. But not us, and certainly not the media. We have no stake in this, and he owes us nothing. Tiger Woods is hardly the first mega-star caught in mess of his own making, but I’ll bet that his public image and marketability will come out of this a lot better than most people think. A little proportion and perspective will bare this out.

Does Tiger’s bad judgment pale in comparison to past superstar athletes embroiled in scandals such as Michael Jordan and Kobe Bryant? Yes. Remember Michael Jordan’s sudden “retirement” from the NBA back in 1993 was widely believed to be due to his gambling problems? He returned two years later to lead the Chicago Bulls to three more NBA titles, and then, despite the public nature of his messy divorce, his Nike brand continues to be a global powerhouse.

Kobe Bryant was on trial in 2004, accused of sexually assaulting a woman. He admitted to having an adulterous encounter with the accuser, but denied the sexual assault allegation. The case was dismissed when the woman refused to testify, and a separate civil suit was settled out of court. As a result, his endorsement deal with McDonald’s was cancelled. In retrospect he emerged relatively unscathed.

Once the trial ended and the story faded, the deal with Nike he signed prior to the trial was put on hold for two years before Nike began promoting his line of basketball shoes. Bryant’s reputation rebounded and was rehabilitated to the point that he now endorses Coca-Cola’s Vitamin Water brand and Guitar Hero World Tour. By 2007, CNN estimated Kobe Bryant’s endorsement deals at $16 million a year. Another NBA trophy for Kobe and the sky will be the limit again.

Last year, U.S. Olympic multi-gold medalist swimmer Michael Phelps lost his endorsement deal with Kellogg’s over his publicly photographed pot smoking. Cheating is sheer stupidity, and smoking pot isn’t any smarter, but it’s still against the law. Kellogg’s did the right thing. Phelps’ bong hit sent the wrong message to kids. His actions were more about youthful indiscretion than anything, and the punishment of losing his lucrative deal fit the crime. His marketability is still on the upswing. Add a few more gold medals in 2012 and no one will remember his misstep.

Martha Stewart went to jail for income tax evasion, and at the time, was vilified as a heinous individual and has since reinvented herself as a kinder, gentler Martha. Her “brand” bounced back with little-to-no damage and is stronger than ever. She cheated, got caught and paid the price by going to jail. Now she’s perceived as being a far less polarizing individual, and her marketability continues to grow. Perhaps as a result of her incarceration, the public is willing to forgive when celebrities are as flawed and human as the rest of us. It brings them down to our level and closer to us in many respects.

It’s no stretch to believe Tiger Woods will keep a low profile, sponsors will keep their Tiger ads and TV spots in cold storage and eventually, he’ll re-emerge publicly and professionally to continue his career as arguably one of the greatest golfers of all time. When everything is forgotten, he’ll get even more lucrative endorsement deals as a result of his prowess on the links. Until then isn’t Tiger Woods entitled to the same consideration we get at work? “So long as your personal business doesn’t affect your performance on the job, then it’s a non-issue.”

-- Joel Kirstein, Creative Director, CPG/Shopper Marketing

Well, in general, this format and style is more flexible, easier to clear for adoption and use, easier to register and protect each element separately, and easier to enforce rights in both verbal and non-verbal elements.

With respect to enhanced flexibility, a trademark owner can elect to always use the verbal and non-verbal elements together, perhaps as a way of reducing the risk of infringing on another's prior rights in a mark perhaps similar to either the verbal or non-verbal element, or as Jack Cuffari commented, the combination logo is the "best-case scenario" because it is possible to "wean the symbol away from the name once research has proven that the target audience gets the connection, so that the symbol can be used alone, or in conjunction with the brand name."

Indeed, few symbol logos spring into existence without a history of having been used side by side with the underlying brand name, so, the symbol adopted by the "Artist Formerly Known as Prince" is probably the best exception to this general rule:

With respect to ease of clearance, it is generally less of a challenge to clear physically separable combination logos over text logos or integrated combination logos, since the Mercedes-Benz verbal portion involves a straightforward word search, and the corresponding three-point star within a circle symbol involves a straightforward design search. In fact, it is often more difficult to obtain a comprehensive and reliable trademark search report for a proposed text logo or an integrated combination logo as compared to a symbol logo or a physically separable combination logo. Because of design coding challenges, it is easier for a trademark searcher to locate prior marks of potential concern when one's proposed logo comprises a stylized star or shell design than a text logo that may be unknowingly or unintentionally similar, not to the word, but to the color combination and lettering style employed by, say, Coca-Cola, Yahoo!, Google, or Ebay: 

For more information on the importance of trademark clearance, see my previous post entitled "Look Before You Leap! The Dangers of Not Clearing Brands Before First Use."

With respect to ease of registration, if the brand name is physically integrated and part of or even touching the non-verbal design elements, in many cases, the non-verbal design elements cannot be separately registered as a trademark. To register the non-verbal design elements of an integrated combination logo, it must be shown that those non-verbal elements actually perform a trademark function to indicate source separate and apart from the verbal element. This can be difficult to establish if the verbal element is always present within the design. On the other hand, the Trademark Office views a non-integrated combination logo as comprising at least three different marks, each of which may be registered alone: (1) The word or words; (2) the non-verbal symbol; and (3) the combination of verbal and non-verbal elements. By being able to register each element separately at the outset, even during a time when they are always used together, it facilitates the trademark owner's ability to eventually "wean the symbol away from the name" with added confidence. 

For more information on the importance and benefits of federal registration, see my previous post entitled "The Power of Federal Trademark Registration Remains Strong in Tough Economic Times."

With respect to ease of enforcement, assuming each element of a physically separable combination logo has been registered, enforcement is enhanced too, for the reasons already stated above. Having each element registered separately, eventhough they may only be used together, permits the Trademark Office to refuse registration of later marks that are confusingly similar to either the verbal or non-verbal element. In the event the Trademark Office doesn't see a conflict for some unexplained reason, the non-integrated combination logo format also enhances the trademark owner's ability to challenge registration of another's mark that may not be confusingly similar to the combined elements, but to one of them.

Now, as David correctly notes, the desire by marketers to treat brands as verbs is not new, and as I might add, it does not appear to be going away anytime soon. Apparently, Karl Speak's Brand Tool Box proclaimed in 2005: "Brands are verbs, not nouns," a statement in direct conflict with Al and Laura Ries' "The 22 Immutable Laws of Branding," from 2002, where they write: "A brand name is a noun . . . ." (As a side note, back in 1989, it was suggested by Nancy Allison that when a noun is "verbed" you end up with a "nerb"). Just so you know, in general, the law views brand names and trademarks as adjectives, not nouns or verbs, so kudos to Nancy Friedman of Fritinancy to recognize this important point.

As a result, door number three reveals at least one false premise of the argument, it seems to me: A brand name is not a noun, but rather, an adjective. Nike footwear, for example. Adjectives modify nouns and pronouns, "giving more information about the noun or pronoun's referent." Nike is a brand name infused with meaning, and it serves to modify and give life and further meaning to and information about the inanimate and lumpy noun and generic product we call "footwear." So, what's wrong with adjectives, don't they have any marketing muscle? Personally, I have always found adjectives to be very compelling when storytelling, and isn't that what branding is all about, telling a story?

At any rate, despite this possible flaw in the argument, the obsession to "just verb it" and the tidal wave of marketers encouraging the use of brands as verbs continues. SEO Black Hat wrote about "brandverbs" back in 2006, Mapping The Web// Blog wrote about "brands as verbs" in 2007, Marty Schwimmer confirmed the marketer's desire for "verbable names" in June 2007, Radiant Brands wrote about "Brands That Are Verbs - When the Brand Becomes An Experience" in April 2008, and That Other Blog, Way Over There, wrote about "brandverbing" in December of 2008, immediately followed by Lori Senecal's article in Adweek: "The 'Verbing' of Brands." In January of 2009, Alex Mandossian wrote favorably about "getting verbed" in "Why is Google Unhappy About Getting Verbed?" In addition, 15 Ideas Blog wrote about "When Brands Become Verbs" in April 2009, Shooting Bubbles wrote about "verbing up" in May 2009, and just a few days ago Richard Curtis wrote about "verbing up" in "You Can Google Bing, But Will You Bing Google?"

David Cameron, at least, recognizes: "I’m sure the lawyers would strongly caution against 'brandverbs'…" He's right, the International Trademark Association offers these guidelines on proper trademark use to trademark owners and those in the media: "NEVER use a trademark as a verb. Trademarks are products or services, never actions." INTA provides this example: "You are NOT rollerblading, but in-line skating with Rollerblade in-line skates." It also offers this test: "A good test for correct usage of a trademark is to remove the trademark from the sentence and see if the sentence (generic) still makes sense. If it does not then you are potentially using the mark as the descriptive term or as a verb and not as an adjective followed by a noun as you should." Why? To prevent brand names and trademarks from becoming generic names and part of the public domain for anyone to freely use, even competitors. (You may recall my prior Rollerblading post).

The challenge for trademark types and trademark owners is that many marketers are not listening to these cautious admonitions. As a consequence, trademark types will need to be increasingly more and more creative in their approach to mitigate the risk of the brand not only going to marketing heaven, but dying a sudden death immediately thereafter.

Stay tuned on DuetsBlog for Part II of this topic, coming soon.

Last thought, for now, concerning non-verbal logos, really:

Don't brand owners need to "name" their non-verbal logos, especially those that "stand alone," otherwise how can anyone spread the word, so to speak?

For example, Nike seems to have figured this out, owning federal trademark registrations for the word SWOOSH (in connection with footwear and clothing items), separate and apart from what is known as the "Swoosh" Logo. 

McDonalds similarly owns a federal registration for the words THE GOLDEN ARCHES for restaurant services.

I'm not sure there is a suitable, brief and unique name for the Wenger logo shown above, perhaps that is part of the reason for the "FROM THE MAKER OF THE GENUINE SWISS ARMY KNIFE" tag line?

Wenger describes their non-verbal logo in recent trademark filings this way: "The mark consists of a chrome colored cross on a red square with rounded edges, outlined by a chrome colored square with rounded edges."

I think this just proved my point.