Attention, Mark Burnett: Within the hallowed halls of marketing giant Octagon is a reality show waiting to happen. First Call is on call 24/7 to help Fortune 500 companies and boutique businesses alike navigate the vast and often treacherous landscape of sports and entertainment acquisition and activation, with a team headed by managing director David Schwab.
By Barry Janoff, Executive Editor
(Posted March 4, 2010)
Smack dab in the age of Twitter, Facebook, MySpace and cell phones with killer apps, good news travels fast, but bad news travels even faster.
Tiger Woods was barely out of his damaged 2009 Cadillac Escapade this past November when details about his alleged affairs, tapes of related 911 calls involving his accident and distressed e-mails to and from his associates were making the rounds. Internet wires could not have burned hotter than they were when news of Charlie Sheen's domestic problems charred the Web. And when the roster for the new season of Dancing with the Stars on ABC was announced, professional and amateur pundits alike got to regurgitate the papparazzi-strewn biographies of such headline makers as Kate Gosselin, Pamela Anderson, Erin Andrews and Shannen Doherty.
Marketing deals involving celebrities and athletes generally go as planned. But the ramifications of events involving Woods, Sheen, Kobe Bryant, Alex Rodriguez, Manny Ramirez, Charles Barkley and others have shown how quickly an alliance can go sour. Which is why First Call, the acquisition and activation division of marketing and athlete/celebrity agency Octagon, is busier than ever. First Call works with clients from concept to completion to accentuate the positive, vet the negative and maximize the value of celebrity talent. Drawing upon a data base of 24,000-plus, First Call said it has negotiated more than 400 corporate partnerships over the past two years.
David Schwab joined Octagon, located in McLean, Va., in 1999 as director of communications and is now vp for Octagon and managing director for First Call. When he spoke with NYSportsJournalism.com, he was in the midst of tracking deals attached to the Winter Olympics — during which Octagon clients won 14 medals, among them Apolo Anton Ohno, Seth Wescott, Hannah Teter and Team USA hockey goaltender and tournament MVP Ryan Miller — working on projects for the 2010 MLB season and FIFA World Cup and celebrating with his wife, Erika, the birth of their third child.
NYSportsJournalism.com: Do you think people have been overwhelmed by all of the marketing they have seen so early in the year from major sports and entertainment events?
David Schwab: I'd start by saying that January and February always get brands and the public excited about celebrities. Not only do you have the Super Bowl, the Pro Bowl, the Daytona 500 and this year the Winter Olympics, but you also have the Grammys, Oscars and Golden Globes as well as American Idol and Dancing with the Stars. During the first couple of months of the year there is always a big push. If you look at the news coverage or do a Yahoo! or Google search, you'll see celebrity names come up way more now than at any other time of the year.
NYSJ: Does it seem that, even with the economy still in recovery mode, the marketing around each of these events has gotten its fair share of headlines and attention rather than negating each other?
DS: Yes, and that's because there are so many more places now to get headlines. Brands recognize that if used correctly, sports and entertainment are effective for their marketing campaigns. So if your marketing budget decreases when the economy goes sour, maybe you scale back that aspect of your marketing. But you still need to market your brand. Marketing budgets don't go to zero. They may decrease in an off-year. That just means you look at your marketing mix and take percentage dollars off different areas.
NYSJ: So rather than taking a fatal hit because of the economy, would you say that brands have found ways to reinvent their marketing strategies and budgets?
DS: You typically just don't slash marketing. Because that's what you need to bring back the business. People reading this will say, 'You're just saying that because it's your business.' But our business isn't going down. We are continually getting phone calls. People are continually interested in talking about ways in which they can activate.
NYSJ: How has the rise of new media and the speed in which news travels changed marketing that uses celebrities and athletes?
DS: Part of the reason is that there are a lot of niche industries now where there are celebrities. It started with the extensive number of cable channels and has now extended into social media. A few years ago, maybe you could name five chefs in the U.S. Now you can name a couple of hundred chefs. Fitness trainers. Interior designers. Home improvement experts. All of these people now have niche audiences. Brands now have a lot more people who they can choose from for their marketing campaigns. And with that, you can spend small dollars or you can spend very big dollars. But typically, there are more people who fit within everyone's budget.
NYSJ: Does it seem as if what used to be 15 minutes of fame has decreased because social media can rapidly create and then discard celebrities, but has also in some cases increased the amount of time that some people remain in the public eye because they can eventually recycle themselves as reality stars?
DS: That's right. Fifteen minutes has turned into 15 seconds with the upside of 15 years. Look at what ABC's Dancing with the Stars has done. It is by far the best vehicle for celebrities to reinvent their brand name. It's unbelievable how well celebrities who have been on that show have done: Jennie Garth. John O'Hurley. Emmitt Smith. Jerry Rice. Shawn Johnson. Kim Kardashian. Mel B. Apolo Anton Ohno. You have 20 million people watching that show twice a week for 13 weeks.
NYSJ: The new season of Dancing with the Stars includes NFL all-pro Chad Ochocinco and gold medal figure skater Evan Lysacek, so that theory seems to be on-going.
DS: The number of eyeballs that show gets is unbelievable. And for an athlete, opening the door to a female demographic is huge. I'm not sure of the exact numbers, but I remember a stat that showed of Emmitt Smith's 15 highest-rated appearances on TV, 11 of them were with Dancing with the Stars [when he won the competition in Fall 2006 with Cheryl Burke]. Smith [who is represented by Octagon] was a three-time NFL champion with the Dallas Cowboys, and his top four [highest-rated TV appearances] were Super Bowls XXVII, XXVIII and XXX and the 1981 NFC Championship Game [against the San Francisco 49ers]. All the others were on DWTS. He played in the NFL from 1990 to 2004 [and was elected to the Pro Football Hall of Fame in the Class of 2010]. But the vast majority of his highest-rated appearances on TV were in a three-month period.
NYSJ: Does it work just as well for actors who are on the show?
DS: A lot of the actors who appear on that show already have [a diverse] audience. But if you are a basketball player or a football player, appearing before 20 million viewers twice a week, the majority of whom are female, that is fantastic. That's why so many celebrities want to do that show. It's been great for their marketing.
NYSJ: Michael Phelps' agent at Octagon, Peter Carlisle, has done a great job in keeping Phelps, whose career is based on his appearances in the Summer Olympics, a hot marketing property year-round during non-Olympic years, even with the personal situation he had to deal with. Can Winter Olympics snowboarder Shaun White follow a similar road and be popular with brands even between Olympic years?
DS: The question is more, Does Shaun White want that? Does Shaun White want to be mainstream like [skateboarder turned entrepreneur] Tony Hawk is mainstream? I don't think he could be another Tony Hawk. Tony Hawk was first. But for Shaun White [who is represented by IMG], I think he could be successful in apparel [where he has a line with Target that is geared toward the snowboard and skateboard communities]. Other categories would have to be relevant for him year-round. (Editor's Note: White has deals with Burton and Red Bull, and previously had deals with American Express and HP that have ended.) The challenge would be to get him out of the mindset among consumers who associates him only with winter sports.
NYSJ: Do you see a double-standard between athletes and actors regarding when they cross the line with marketers and fans? Tiger Woods, for example, has been dropped by several major marketing partners. In Charlie Sheen's situation, production on his show, Two and a Half Men, was affected only temporarily when he went into rehab.
DS: It depends on the person. And it depends on what they did wrong. Charlie Sheen, for example, has a 'bad boy' image. People know that. People play that. They use that to their benefit. Now when you get into issues in that conversation, everybody takes a pause. If you look at athletes and celebrities, first, you have to look at whether or not the person was respected as a clean-cut role model or were they known for their bad boy, off-color image? Then, whatever the problem was, is it something that the media and the public frowns upon? What is the media/public backlash. All of those factors play into the decision of what we do with that talent, that brand or that TV show.
"There is more vetting, but not [just] because of Tiger Woods. Over the last five years brands have had to face more accountability to business units."
NYSJ: Does offering an apology necessarily equate to winning back sponsors and fans?
DS: Being sincere and apologizing quickly works more often than not. But you can't do that unless the full story has come out. I don't know what happened within the walls of Tiger Woods' home. But if his team let him come out in public and apologize right away, knowing that more of the story would come out a week later, that could have been worse than what he did: waiting until more of the story came out. You can criticize him for not coming out right away to apologize. But we didn't know how much of the story had not yet come out, or what the full legal ramifications would be. As it turned out, there was more to it.
NYSJ: It seems as if endorsements and marketing deals skew greatly in favor of male athletes. Are there female athletes who are being overlooked and how can more female athletes get into the marketing mix?
DS: A big part of that is TV, and the sports that have national and global followings. So it's not a male-female thing as much as much as a fan-based TV thing. Look at sports programming on any weekend - how much of that is male sports versus female sports. Danica Patrick is in a unique position in that she what she is doing makes her stand out in her sport, which gives her an appeal. Michelle Wie had the phenom status and appeals to the Asian American market. Venus and Serena Williams and Maria Sharapova have a global stage four times a year with the tennis Grand Slam events. Mia Hamm also fit into that in that she was a pioneer who had a global stage with the World Cup. But for women athletes, there aren't that many sports where they can get that type of stage. However, when you look outside of sports at Hollywood and music, there are probably more endorsement deals with women than with men.
NYSJ: What do you see as the strongest sports properties for the rest of 2010?
DS: There always is an uptick in endorsements during March Madness, and a lot of publicity and promotions. You'll see an increase in baseball-related marketing because the New York Yankees are the defending World Series champs with a lot of brand names. That helps from a national perspective. The World Cup will add a lot to the mix, so [U.S. National Team] players like Tim Howard and Landon Donovan will get their due. Then you're back into football season, which without question delivers more marketing campaigns with athletes than any other sport. You will see an even bigger bump than usual because we are coming to Super Bowl XLV, which is a nice number for marketers to work with. And with Super Bowl XLV being played in Cowboys Stadium, that will also increase the marketability not just of current [Dallas Cowboys] players such as Tony Romo but of [former players] like Ed 'Too Tall' Jones, who is in the current Geico campaign. And Emmitt Smith.
NYSJ: Are companies trying to be more cautious than ever regarding the athletes and celebrities they want to sign to endorsement deals?
DS: There is more vetting, but not [just] because of Tiger Woods. There is more vetting because over the last five years brands have had to face more accountability to business units. Brands have hired people like First Call who do this 24/7. Brands realize that our business is being experts in this field. Just as there are marketing agencies, PR firms and ad agencies, there is a celebrity procurement consultant. As what we do has become more respected, more vetting has taken place. But, of course, when something happens as with Tiger, there is always an immediate bump in terms of vetting, where brands say to us, 'Make sure you do that extra due diligence.' But we already do that. It is our job to find the appropriate people who bring maximum value to the brand with minimal risk. For us, that is a daily charge.