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BizReport : Advertising archives : August 23, 2016

Expert: Brands can recover from endorsement scandal

As sponsors drop Olympic swimmer Ryan Lochte after the incident in Rio, many brands are asking what they can do to protect themselves from similar situations. One expert believes that not only can Lochte recover from the events, but so can the brands who have used his endorsement in the past.

by Kristina Knight

Kristina: Can Ryan Lochte's "brand" recover from his actions in Rio?

Matt Rizzetta, President & CEO, North 6th Agency: Yes, Lochte's brand can recover from the Rio disaster. Although it took a few days and a few unnecessary twists and turns in the story, Lochte ultimately made a smart move by admitting guilt before the story got completely out of control. Now the rehabilitation process for his brand begins. Ironically, if it was possible to steal the spotlight from Michael Phelps in these Olympic Games, it was Lochte who accomplished this feat. Obviously not for the right reasons, but he has captured the attention of millions, and now with some delicate messaging, he can put his brand in a position to recover and be used as a good old fashioned turnaround story. This is something that will always attract the compassion of the American public, and the dollars of corporate sponsors that have quickly turned their back on him since the story first broke.

Kristina: For the brands associated with Lochte, what kinds of backlash could they face from people annoyed at this behavior?

Matt: The immediate backlash is pretty severe for brands that have decided to remain loyal to Lochte. Ultimately it all boils down to trust and honor. The Olympics represent trust, honor, and purity perhaps more than any other sporting event. Since the Lochte situation revolves around an issue of trust, it puts brands that associate with him in a compromising position. Brands that have aligned with Olympians have done so to form a common bond with their audience linked by trust and patriotism. While Lochte can repair this in time, the immediate backlash is pretty severe since it could represent a breach of trust between consumer and brand.

Kristina: For brands considering a celebrity endorsement, how can they protect themselves from this kind of situation?

Matt: Brands are in a tough spot when it comes to alignment with celebrities. They can conduct focus groups, background checks, and all sorts of due diligence until they're blue in the face, however the actions of their spokespeople are ultimately out of their control. As Lochte illustrated down in Rio, all it takes is one bad night to erase millions of dollars and countless hours of research that go into endorsement vetting for these brands.

Kristina: In your opinion, is there anything the IOC can do to help manage these kinds of brand relationships?

Matt: No. The IOC should remain independent and removed from athlete to brand relationships. The closer the IOC gets to these relationships the more compromised their objectivity becomes. Other than simple vetting to ensure athletes are aligning themselves with brands that are "passible" by IOC standards, the IOC should remain removed from these dealings.

Tags: advertising, brand marketing, celebrity endorsement, North 6th Agency, Olympics, Ryan Lochte

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