Olympian Michael Phelps' record-setting performance in Beijing has led to multimillion-dollar endorsement deals, but his road to marketing gold was paved years before he swam a lap in China.
Phelps' marketing success this summer grows from a strategy his agent, Peter Carlisle of marketing powerhouse Octagon, has mapped out carefully over the six years of their partnership. Venturing online and into other new venues and targeting new geographies, Phelps and Carlisle are pursuing a lasting public presence and $100 million in endorsements – unheard of in swimming. If they succeed, Carlisle's handling of the 23-year-old swimmer could be a model for managing Olympians.
The downside, of course, is the risk of overexposure. Carlisle has to balance his goal of getting the most endorsements for Phelps without diluting his brand.
Carlisle and Phelps are going beyond the traditional advertising campaigns used by many past Olympians, though Phelps' brand is fairly traditional: He's an all-American champion, and companies want to associate their brands with him in the hope some of the gloss will rub off on them.
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Phelps and Carlisle are building on Phelps' flashes in the limelight in the pool with appearances atypical for swimmers, such as an eight-city tour, endorsements in fast-growing markets such as China and a stepped-up presence online.
Phelps posts to his Facebook page himself – he has 1.5 million “Phans,” nearly as many as Barack Obama – and participates in Web chats. Videos of him and other swimmers are available at Swimroom.com. Fans also post tributes to him on YouTube and blogs. This exposure was not as readily available even a decade ago to other Olympians. And it's critical to Carlisle's strategy.
“TV coverage on the Olympics only lasts so long,” said Carlisle, managing director of Olympics and Action Sports at Octagon, a unit of Interpublic Group of Companies in New York. “Until swimming changes, where it's televised frequently between the games … , he has got to create his own platform.”
Phelps' income already has more than doubled from about $5 million a year before the Beijing Olympics. His lifetime earnings could top $100 million, Carlisle said, confirming an earlier report of this estimate.
It helps that Phelps is one of a kind. His haul of eight gold medals in Beijing was the biggest tally for any Olympian in a single Olympics. But even the seven-figure income he was earning before Beijing was a first for swimmers, said Bob Williams, chief executive of Burns Entertainment & Sports Marketing Inc. in Evanston, Ill.
Carlisle crafted a marketing strategy for Phelps – to keep him “relevant” between swimming competitions – even before the 2004 Olympics in Athens, where he won six golds.
One of Phelps' earliest deals was with Speedo in 2001, a year after he made his Olympic debut in Sydney. Two years later, to keep the buzz going, Speedo announced it would give Phelps a $1 million bonus should he match or beat Olympic swimmer Mark Spitz's record of winning seven gold medals in one Olympics.
“We created a strategy where we tried to control the pace at which he would make himself available to the media and where he did that,” Carlisle said.
After Beijing, the Baltimore native received hundreds of inquiries and proposals, some “very unique and obscure and fun,” Carlisle said.
This week, Phelps got a reported $1.6 million advance from Free Press, a unit of Simon & Schuster, for a book to be titled, “Built to Succeed.” He just finished a stint on Oprah and will host “Saturday Night Live” this week. In late September, Kellogg's will be putting his face on 10 million boxes of Corn Flakes and Frosted Flakes.
Phelps should watch against overexposure, said David Carter, executive director of the Sports Business Institute at the University of Southern California.
“He doesn't need to jump at every opportunity,” Carter said. “Otherwise he will find himself diluting his global brand.”