It’s usually rude to look a gift horse in the mouth, but if an unexpected equine gift appears, you should at least double-check if there’s a stable prepared for the horse.
And yes, we’re talking about Taylor Swift and her effect on the Kansas City Chiefs’ brand.
The Chiefs were already a top-tier NFL team long before the most powerful woman in entertainment fell in love with the team’s legendary tight end Travis Kelce. The Chiefs have made the playoffs for nine consecutive years and won the Super Bowl four times. It’s the biggest team in the NFL.
Nevertheless, the moment the cameras caught Taylor Swift in the stands in 2023, the value of the Chiefs brand skyrocketed by an estimated $US331.5 million, nudging it close to becoming a $US1 billion company, according to Apex Marketing Group.
Recent surveys suggest that 53% of Americans are self-reported Taylor Swift fans. Her 2023 summer concert tour generated $US350 million in ticket sales (more than Beyonce and Coldplay combined) and her “Eras” tour movie generated more than $US260 million in theatres making it the top-selling concert film of all time.
Her mere presence at Chiefs games led to the NFL having its highest regular-season female viewership since the year 2000, rising by 9% year-on-year, Front Office Sports reported.
Obviously, the pop star is a huge gift for both the NFL and the Chiefs, so it seems a bit rude to start asking questions about strategy – especially when there is no iron-clad contract tying Taylor to the endorsement.
Asset or liability?
But what happens if (or when) Swift and Kelce break up? They might stay together forever. Yet if they don’t, will the value of the Chiefs remain stratospheric? Will all those new female fans stick around to watch football in a post-Swiftian NFL?
We can ask this in a more business-sounding way: should the NFL develop a strategy to capitalise on the increase in brand value that the ‘Swift Effect’ created? Or is it just happy to make hay while this particular sun shines?
The former option is risky. There’s a long history of influencers acting as positive intangible assets until one day they turn into horrible liabilities. No matter how much PR air cover a celebrity has, there is a real human behind the persona who is full of emotions that can bubble up at weird times. That’s why humans can’t be intangible assets, but their brand might be.
Any company that chooses to ally with a celebrity in the hope that some of that person’s brand power might rub off on their new can of tomatoes, for example, needs a good strategy to manage the relationship carefully. Spending every night down on your knees praying that no unexpected outburst results in guilt by association is not a strategy.
Don’t get us wrong, we’re not saying celebrity alliances are dangerous. Celebrities can drive significant brand value. The real question is: should you ally with this celebrity? Some celebrity endorsements are better for your company than others. A good strategy will reveal the answer.
Anti-fragile influencer strategies
Let’s use Nike as an example of a good celebrity endorsement strategy.
Nike prides itself on producing top-quality sports gear. Its stated mission is to “bring inspiration and innovation to every athlete in the world.” Therefore, Nike’s endorsement strategy is to align itself with the best players in any sporting endeavour so that the company can demonstrate the superiority of its products while also inspiring the masses.
Should the lives of top players suddenly become a public relations minefield, Nike switches into risk mitigation mode to separate the personal from the professional. This helps insulate Nike from negative brand blowback. Nike doesn’t sponsor the player; it sponsors the best person who plays the sport. This is a small subtlety, but it makes all the difference.
Nike’s endorsement relationships always aim to build a constellation of intangible assets. By aligning the company with the ‘right’ influencers, Nike can demonstrate its deep industry expertise and amazing designs while collecting data on how its gear performs (not to mention exceptional advertising content). That’s what a good intangible asset strategy looks like.
The counterexample is Adidas.
A few years ago, a good chunk of Adidas’ enterprise value relied on its relationship with music artist Kanye West. Adidas collaborated with the artist to design a line of lifestyle sneakers called Yeezys that sold incredibly well. The value of this partnership was mainly driven by the halo effect Kayne had on Adidas’ brand value.
But that all collapsed when West’s public outbursts forced Adidas to abruptly cut ties with the artist. Because it had aligned its brand so closely to Kayne, the reputation of Adidas also went into free fall and its share price still hasn’t fully recovered.
Adidas’ core mistake was not its alliance with Kanye West. Its mistake was to align itself too closely to the popularity of a single celebrity without having a strong constellation of other intangible assets to make the relationship anti-fragile.
Adidas chose to follow the ‘fad and fashion’ road by aligning with people for their celebrity rather than their sporting achievements. It was a high-risk, high-reward strategy that worked for a while, but blew up spectacularly in the end.
Contract vs gift horse
Back to Taylor Swift.
There is an important difference between the examples above and what the NFL is currently experiencing with Taylor. The difference is that Nike and Adidas both have contracts with their celebrity or athlete partners that are designed to build mutual value and which often include obligations on public behaviour.
In the NFL’s case, the ‘Swift Effect’ is happening as a side-effect of her relationship with Kelce, not due to a contract. So, it would be risky for the NFL to now attempt to capitalise on something they do not control. The gift of Taylor Swift is fantastic, but the wiser move for the NFL would be to focus on letting her brand boost the value of the assets they do control.
That’s the lesson. While brand associations are great, don’t try to bash the square peg of celebrity serendipity into the round hole of your strategy.
Becoming anti-fragile requires gathering a wide constellation of intangible assets, each of which are aligned with your business strategy – not the other way around. Relying too much on the celebrity’s brand creates a single point of failure for your business. That’s not a strategy; it’s hope. And hope doesn’t pay the bills.
A good intangible asset strategy should be flexible enough to take advantage of serendipity, but it is far more important to focus on bolstering the intangible assets that you directly control.
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