The Curious Case of Cristiano and Coke

The world was his stage as Portugal footballer?Cristiano Ronaldo?moved away?Coca Cola?bottles at a UEFA Euro 2020 press conference recently. While the act seemed innocuous at first, the resulting $4 billion drop in the beverage company’s market capitalization told a different story. The consequent incidents involving Manuel Locatelli and Paul Pogba have only added fuel to fire, spurring many to reconsider the evolving relationship between brands and celebrities.

For decades now, brand sponsorships have worked like a well-oiled machine, wherein each participant has depended on the other for their collective success. It is undeniable that several brands have been built on the back of celebrity endorsements. It is equally irrefutable that several celebrities were made over the past several decades because of their associations with major brands.

Similarly, the relation between big events like sporting tournaments has been an old one. Take for instance, the memorable Great Indian Huddle commercial by?Pepsi?in 2004 or the Olympic commercial by Coca Cola dating all the way back to 1979 - enjoying a coke or a beer has been a part of the viewing experience for decades. Until recently, all the participants – Brands, Events and Celebrities – have done their part in successfully carrying on the business of sponsorships.

However, in recent years the environment in which these participants have been operating has undergone a massive change. With the advent of social media, the stakes have escalated significantly for everyone involved. This has led to a marked change in how brands and celebrities interact with each other, as both are being held accountable by the consumer.

Cultural Influence

Brands and celebrities have led the charge on determining the trends of the day – be it fashion, skincare, fitness, food and much more. They have been the drivers of cultural change by influencing the consumer into making certain lifestyle choices. Before social media, this relation between the consumer and the influencers was largely one-sided.

Now, however, it has become interactive with an empowered consumer on the other end, holding them accountable for what they endorse. Especially in case of celebrities, people now have a larger window into their lives, and they are critically evaluating their endorsement choices in line with their personal lives.

This has worked the other way round too, with brands being cognizant of how celebrity associations affect their image. In 2016, when?Maria Sharapova?admitted to failing a doping test at the Australian Open, brands like Nike, Tag Heuer and Porsche quickly suspended their sponsorships. Similarly, Lance Armstrong lost out on his brand associations with Nike, FRS and Trek Bicycle Corp after it came to light that he had indulged in performance enhancing drugs. Closer to home, S Sreesanth lost out on his sponsorships by Nike and Muthoot after his betting scandal broke.

Personal Beliefs

Social media has greatly helped celebrities further build their personal brands. In fact, several retired sportspersons have been able to leverage their influence and managed to gain brand deals out of it even in their retirement years. This has empowered the celebrities to call the shots to a higher degree, something that may have been lacking in the pre-social-media universe.

Given their cultural influence and much-lesser privacy in a hyper-media age, these celebrities are ensuring that their brand associations are aligned with their personal beliefs. Take for instance?Virat Kohli, who chose to part ways with Pepsi after a 6-year association on grounds that the sugary drink endorsed a lifestyle that didn’t support his fitness ideals. While many sportspersons in the past have associated with Coca Cola and Pepsi, none endorse the cola drinks any longer in India. Since 2017, athletes have done short term partnerships with these beverage companies to endorse non-cola products like Quaker Oats, Gatorade, etc.

In hindsight, the Ronaldo incident is more or less the same. While he may have had a brief association with Coke in the past, his personal beliefs have changed over the years (something he has been vocal about in several interviews). While nobody takes issue with his personal disdain for Coke, his actions threaten to imbalance an ecosystem that has worked on trust and mutual alignment of what can be expected by each party. The truth is that brands like Coke have always taken a punt on athletes and other celebrities while they are still emerging stars in their profession and have contributed to catapulting several of them into massive stardom.

So, was it fair for Ronaldo to make such a public display of his contempt for Coke? It wasn’t! As sponsors of Euro 2020 they probably had the contractual right to place those Coke or Heineken bottles on the podium. Any misalignment between the sportspersons who are not directly endorsing the brand should have been discussed and sensitively handled behind the scenes and not on a public stage. Ronaldo should have at least honoured the ecosystem and avoided a public display of contempt.

While the cogs in the ecosystem may rearrange themselves over the next few years, what will stay the same is the expectation of trust.

First published on Economic Times Brand Equity on June 24, 2021