Companies can get no better return on their endorsement dollars
than for a player to win a major championship using their
equipment.
Along with their logo on display for millions of television
viewers, next-day advertisements will spin yarns on how the club
was as important as the swing, the ball as valuable as the player
striking it.
If that's the case, Wilson Golf fell victim to bad timing.
Wilson lost out in ending their sponsorship of Singh a few months before he won the 2000 US Masters. Allsport.
Less than six months after an amicable end to its relationship
with Vijay Singh, he captured The Masters while using Cleveland irons, carrying a Cleveland bag, wearing a Cleveland visor.
Wilson had no regrets. It shifted its endorsement strategy from
tour professionals to 4,500 club professionals, who are respected
teachers and also responsible for selling the product.
Wilson misses out on bragging rights, but it's not sure it lost
anything where it matters the most -- the bottom line. Wilson said
iron sales and ball sales have increased over the last year.
"One problem with tour players is there are very expensive
fixed costs,'' said Luke Reese, vice president and general manager
of Wilson Golf. "These contracts range in millions to
multimillions of dollars. Most companies don't see a big sales
increase based on players using their products.''
Then again, most companies don't have Tiger Woods.
In the equipment industry, Woods's promotional rights belong
solely to relative newcomer Nike Golf. While he still uses 14 clubs
made by Titleist, the company gave up its rights to advertise the
world's No. 1 player after a dispute with Nike last year.
Woods used the Titleist ball in 22 of his 24 world-wide
victories, and two of his three major championships. But he
announced a permanent switch to a version of the Nike Tour Accuracy
just before the U.S. Open, then shattered records in his 15-stroke
victory.
Nike already says it is experiencing a bounce, that spring-like
effect on sales that companies generally get after a player wins a
major championship using its products.
"This accelerates our whole process,'' said Bob Wood, president
of Nike Golf. "Our sales reps are out right now getting into
stores we haven't been in before. We are getting orders and
accounts opened that would not have happened if Tiger had not done
what he did.''
What that means down the road is anyone's guess.
SeeMore Putter Co. took 5,100 orders the day after Payne Stewart
used one of its products to drop the winning putt in the U.S. Open last year at Pinehurst. For Dandy Professional Putters, orders went
from 60 a month to one every five minutes in the weeks after Singh
won the Masters.
Wood is not sure how to measure the impact a players'
endorsement -- even a megastar like Tiger -- has on consumers.
"Unless you're talking to a 12-year-old, nobody ever says
they're influenced by an athlete,'' Wood said. "They want to
appear more intelligent than that.''
So just what is the value of an endorsement?
Callaway Golf and Titleist are the biggest sellers in clubs and
balls, respectively. Both devote substantial money to tour players
who use their product. Neither are sure how much that relates
directly to sales.
"We've been all around the block on this thing,'' said Ely
Callaway, the company's founder. "We've had a lot of players using
our products. Promotionally, that's what we've emphasized. But the
reason the company has grown the way it has, and has been
profitable, is primarily due to the merit of the product.
"He (Woods) will help them sell some golf balls. But the thing
that sells golf balls is if we or Titleist or anyone else makes golf
balls better than anyone else.''
Adams Golf was one of the few companies that managed to become a
legitimate player in the fairway metals market, primarily thanks to
an infomercial. Barney Adams, the founder, eventually signed up
Nick Faldo and Tom Watson.
"There is a credibility factor,'' Adams said. "You can make
the argument that no company has ever attained significant success
without tour credibility. How to do it in an efficient manner is
the question. I think Callaway has done the best job. Their
business plan was to buy the tour and be dominant, and it's worked
for them. Same for Titleist balls.
"How much do you spend? That's the $64 question.''
Before Woods switched, Nike Golf had about 1 percent of the
premium ball market. Nike has said it would be thrilled to get 5
percent of the market -- a Tiger impact, sure, but not so huge that
he wipes out everyone else.
"Anyone who suggests he isn't moving the needle is foolish,''
Titleist president Ed Abrain said. "But do you believe the
movement of the needle is sufficient enough to justify the size of
the investment? That's what you have to decide.''
Titleist doesn't need Tiger to promote its product.
Abrain looked at last week's PGA Club Pro Championship in Edmond, Okla., where 124 of the 156 players were using Titleist
balls. Titleist gets similar results in the U.S. Amateur and NCAA championships.
"We have long recognized the fact that when endorsement money
is taken out of the decision-making process, our golf-ball-usage
counts increase,'' said Wally Uihlein, chairman of Acushnet, the
umbrella company of Titleist.
"Titleist has never been about one player, but rather a 50-year
history of being the most played ball by more of the best
players.''
For the first four years of his career, one of those players was
Woods. Abrain said sales increased after Woods turned pro and
endorsed Titleist.
"How much of that you can attribute to Tiger, I don't know,"
he said. "But that doesn't matter to me. We didn't sign him to
specifically put a number on how much he could increase our sales.
We signed him because he represented an affirmation that we were a
credible company with outstanding products.''
