What did Ryan Lochte do? The double-edged sword of endorsers behaving badly

Abstract

PurposeEndorsement deals are a key contributing factor for companies to gain brand recognition and positive brand associations from consumers. However, endorsement relationships can be risky for firms in the event of an endorser’s bad behavior or involvement in scandals. The purpose of this paper is to examine how brands can use endorsement exit strategies to minimize and even benefit from negative situations involving its endorser.Design/methodology/approachAfter a review of celebrity endorsement literature, the paper investigates the Rio Olympic Games robbery scandal involving American swimmer Ryan Lochte as a detailed case. By studying the timeline of sponsor-related activities, relevant theories and brand outcomes through Google Trends, indications of a calculated and strategic exit from the endorsement relationship emerge.FindingsThe case analysis establishes that sponsors can successfully leverage the negative associations toward a disgraced endorser. Based on the process of meaning transfer, this case proposes that sponsors can benefit from its public dissociation from the endorser and gain awareness from this separation.Originality/valueThis paper is the first study to examine the positive impact of a celebrity endorsement scandal. It highlights the need for managers to actively prepare endorsement exit strategies in the event of negative associations or endorser actions. The timing and scope of the exit strategy can both limit negative meaning transfer, and leverage the situation creating positive perceptions of integrity and ethics for the sponsor.