Friday, July 10, 2015

Celebrity Spokespersons

A couple of contrasting stories in the news this week bring up the question once again about whether Americans are thinking and deciding for themselves or letting someone else pull all the strings.

Since the US Women’s National Team won the World Cup, some of the players may be able to look forward to lucrative endorsement deals.  This media reports that they need these deals to make a living in the sport, because normally players make “anywhere from just $6,800 to $37,800.” 

Winning the tournament was a boon to a few; still there is considerable consternation among the press that women athletes are still paid so much less than men.  The final game was the most-watched soccer game in history, but the prize money to the teams and the revenue to Fox for airing it was miniscule in comparison to the men’s World Cup or to other men’s professional sports.  Instead of explaining the economics, most reporters prefer to stir up controversy by blaming sexist attitudes.

The reality is no one anticipated the viewership and sponsors “remain skittish to spend money on a sport without the proven returns of a bigger spectacle, like professional football, or the market power other sports can command on shelves.”  It’s not about sexist attitudes; it’s about market power.  Market power is not about the owners or the networks or the sponsors.  Market power is about us, anticipating our willingness to watch or willingness to spend on endorsed products!

In contrast, the news told us that federal authorities raided the Indiana home of Jared Fogle, the Subway spokesperson.  Thus far no charges have been filed, but Subway immediately distanced their brand from the relationship.  Analysts called it a good move.  Loyalty has no value in business.  It is again about market power, the market power of Jared, which turned negative as the news broke.  The fear of losing customers drove the decision, although the sandwiches won’t taste any different.

These decisions and reactions by corporations should make us curious.  Why are we so influenced by advertising?  Does the fact that some formerly unknown guy ate at Subway and lost a lot of weight cause us to want to eat there too, but only until that same now-famous guy gets raided by the Feds?  Can some formerly little-known young lady who kicks a ball very well, cause us to prefer a certain brand over the our current favorite or to buy some product we never would have considered in the past?  Do we make our own shopping decisions or leave that up to the likes of Peyton Manning reading from a script written by some advertising firm?  Does our economy and its value decisions, such as how much to pay certain athletes, depend on adults reacting like a bunch of seven-year-olds who see the latest Disney movie and demand the branded toys and clothing?  Apparently it does.

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