Lochtegate is the scandal involving the swimmers from the United States namely Ryan Lochte, Jimmy Feigen, Gunnar Bentz, and Jack Conger during the 2016 Summer Olympics held in Rio de Janeiro, Brazil. The swimmers lied about being robbed at gunpoint, whereas they had urinated outside the bathroom and Lochte had vandalised a framed poster. The consequence of this was Lochte losing all four commercial sponsors. However, the New Yorker reported that brands were not always so quick to pull the plug on athletes who misbehaved or broke the law. In a conversation with Bruce Clark, associate professor in the D’Amore-McKim School of Business at Northeastern University who also studies marketing strategy and managerial decision-making, analysed the nature of the endorsement industry.
On being asked about the role of social media in leveraging the fan base and exposure of their products, he replied that social media has significantly helped in increasing the reach of athletes and spokespersons. Campaigns built around a spokesperson can expand both awareness for brands and athletes. The biggest challenge is its speed and corporate sponsors need to figure out how to jump to good items and how to deal with bad items like the scandal Lochtegate.
He was also asked about the factors a company considered before choosing to give him another shot and how much of a role might the severity of his offense in Rio have played in its decision. To which he replied that the willingness of the Pine Bros Softish Throat Drops to sign a new endorsement with him has clearly shown they wanted to give him a second chance. They must have calculated that the Lochtegate will not be causing any damage in the future. He added that he appeared as an “Ugly American Overseas” lying about the criminal event. However, the status of the court proceedings and ongoing status with the U.S. Olympic Committee must have played a role in the decision.
On being questioned, “How much stock do brands put in the beliefs and opinions of non-customer stakeholders, including employees, investors, or even regulators?” He answered that in this age of social media, non-customers are more likely to be aware of a spokesperson’s association with a brand. Employees and potential employees are especially likely audiences, as they are already aware of the company and have an interest in following it. Similarly, investors try to assess the impact of an endorsement deal on the underlying value of the firm. Regulators are likely to be engaged only if a company-spokesperson deal somehow crosses a line.