The Impact of Image image The public image of a celebrity can make the difference between success and failure. -Media feeds public fascination -Slander-False statements image a mental picture or concept of something or someone 1 merchandising When a celebrity or a company is in the public eye, there is an increase in the opportunity to make a profit from merchandising. -Multibillion-dollar industry -Can be as much as box office revenue -Toy fatigue-Loss of interest because so much merchandising the variety of promotional activities and materials that complement and support the advertising effort -Direct-action figure -Indirect-logo on pillow case -Tie-in-Toy in kid’s meal

Endorsements Endorsement-any type of advertising done by a person who reflects his or her own opinions, beliefs, findings, and experiences that are separate from those associated with the product’s company. Ex. Michael Jordan saying Nike shoes are superior 2

Examples of Endorsement Guidelines 1.Endorsement reflects honest opinion of endorser 2.Endorsement cannot be presented out of context 3.Endorser must use the product 4.Must disclose expected performance/limitations 5.“Actual Consumers” should be for real 6.Any connection between the endorser and the company must be fully disclosed 7.If product changes, company must notify the endorser 3

Sponsorship Sponsorship occurs when a company supports an event, activity, or organization. In return for money, the sponsor is provided with some type of advertising at the event. Sponsorship is a crucial aspect in sports and entertainment. 4

The Need for Sponsorship Music Concert Example The money from concert ticket sales does not cover the cost of a tour. –Ex. Arena, programs, security, support staff, taxes Advertisers may ask for advertising space on the stage, concessions, T-shirts, and event programs. Marketers keep track of how many times fans see the sponsor’s name at an event and the sales of the products being advertised. 5

Why Sponsor? return Companies seek a return on their sponsorship dollars. return the amount of profit that is given back to the sponsor for the sponsor’s initial investment or sponsorship 6 Calculating return for sponsorships is difficult, but should be seen as an increase in sales.

Sponsorship Risks Companies want to be associated with a popular person who has a positive public image. –Poor image, legal trouble, etc. can cause loss of sponsor Federal laws dealing with tobacco and alcohol sponsorship have become stricter. –The federal government regulates the practice of wealthy companies that sponsor events that could be inappropriate for children and teens. 7

Overview of Licensing and Royalties licensed products goods or services that legally use logos or images owned by other companies or people 8 Licensing and royalties are major aspects of both the sports and entertainment industry. licensed products Entertainment-related companies utilize merchandising and sell licensed products.

Licensing Licensing-when the owner of an original image or a product gives legal permission for a fee to another company or person to copy, manufacture, market, and sell reproductions of the original item. Ex. Disney sells license to a clothing company so they can put image of Buzz Lightyear on a shirt. 9

Licensing Music and Royalties Licensing can apply to music, software, motion pictures, and videos/DVDs. A songwriter and publisher of a song may charge a licensing fee when an artist and label want to record that song. Artists, writers, and publishers receive royalties, or a percentage of record sales or fees for broadcast performances. There can be several agents between the artist and the record company that deduct money from the artist’s profits. 10

Paying for Entertainment Profits from entertainment products pay for the expense of producing the products, with only a portion going to the artists themselves. When music, movies, and software are illegally downloaded and distributed from the Internet or products are pirated, many people are affected. –Ex. Musician, sound technician, costumer designer, caterer Loss of money increases prices of tickets, etc. The user of a pirated product can be prosecuted. 11