Athlete Celebrity Endorsement ­ Credibility and Purchase Power

In American culture few professions are as highly revered as the professional athlete. The

U.S. professional sports team industry is an approximately $19 billion a year industry. Sports in

general are extremely popular­­from golf to football, at levels from childhood summer leagues to

professional all stars­­there are fans and family members internationally. This overwhelming

global support can translate into significant profits for marketers who can capitalize on sports’

popularity and effectively use athletes to endorse their products and services (Pikas, Schied &

Pikas, 2012).

The marketing world’s identification and research regarding target markets among sports

fans is nothing new. Perelman (2012) states that, “sport has itself become the world’s most

powerful mass medium” (p. 32). Professional athletes have an undeniable influence on the

purchasing decisions of their fans. Supporters of a team will buy tickets, jerseys, T­shirts and

other memorabilia such as clothing featuring their favorite players. The influence professional

athletes can have on buying behavior can also spread to products outside the team structure, such

as food, cars, and clothes. Due to the evidence supporting the idea that fans want to adopt the

aspects of strong, fast athletes, they have the potential to become a distinct and highly profitable

target market for an advertiser that uses such a player to endorse a product (Hanks, 2015).

In the past decade, sport celebrities have been collectively earning millions of dollars,

annually, from their endorsement contracts. In 2010, U.S. companies paid nearly $17.2 billion to

leagues, teams, athletes, coaches, and sports personalities to endorse their goods and services,

while worldwide spending on sponsorships continued to grow 5.2% to $46.3 billion (IEG, 2011).

According to the company’s 2010 annual report, Nike was projected to spend about $712 million

for endorsements using celebrity athletes. This $712 million figure calculated base endorsement

compensation and minimum royalty fees paid to athletes and teams, excluding the cost of the

products supplied to the endorsers (Nike, Inc., 2010). When athletes sign heavily financed

endorsement deals, they receive compensation for endorsing a certain product or organization.

The assumption is that the company will be able to reap major rewards from this financial

commitment to an athlete via increased sales and use of the athlete’s image.

The underlying principle of paying millions of dollars to celebrity athlete endorsers is

that the source of the message will add credibility to an advertisement (Yoon, Kim, & Kim,

1998). The advertisers then consider source credibility as a significant basis for selecting a

celebrity spokesperson. Ohanian (1990) provides a model of source credibility utilizing

dimensions of perceived attractiveness, trustworthiness, and expertise as the primary

characteristics in defining an endorser’s source credibility. The more credible and attractive a

spokesperson is, the more persuasive he or she will be as an endorser in order to generate

favorable attitudes toward an endorsed brand or product (Miciak & Shanklin, 1994). Thus, a

well­constructed endorsement can do much to enhance the attitude toward the brand and the

purchase intentions; conversely, a poorly planned endorsement can have no effect or even an

adverse effect.

The purpose of this study is to determine the source credibility of the top paid athlete

endorsers for the nation’s largest sports corporation, Nike, and to measure the source credibility

results with the purchase of the endorsed Nike products. This study applies the established

source credibility model characteristics of expertise, trustworthiness and attractiveness and adds

the measurement of athletic products purchased by respondents. The results of this research of

the product purchase measured with the source credibility of Nike endorser athletes adds

significant knowledge to the celebrity endorsement theory and application.

Literature Review

Source Credibility

The primary study where Ohanian developed his source credibility model was published

in 1991, and detailed the research that supported his model. Ohanian’s (1991) study on

celebrities’ impact on branding defined a celebrity as “people who enjoy the public recognition

by a large share of a certain group of people” (p. 3). The study showed that when the celebrity

endorser was perceived as an expert on the promoted product, it was likely to be seen as more

convincing and more likely to provoke a positive brand attitude among consumers than when

compared with non­celebrity counterparts.

Shuart (2007) highlighted the fact that many times the words “celebrity” and “hero” are

used interchangeably in American society when discussing sport figures. Stevens, et. al. (2003)

added that “commercialized by a global corporate economy, sport heroes have taken on celebrity

status and become extremely profitable vehicles for advertising and promotion” (p. 103). The

cultural shift from pure athlete to athlete celebrity has caused many companies to utilize these

figures in endorsements of a wide­range of products (Braunstein­Minkove, et. al., 2011). Perhaps

one of the reasons for this shift has to do with the sports celebrities themselves.

Often celebrity athletes “embody a collection of culturally relevant images, symbols, and

values” (Choi, Lee, & Kim, 2005 p. 86). It is no surprise that a person with a wide fan base and

an established public persona that may reflect brand values would present such high endorser

potential. Looking in Gwalior, India, researchers found that endorsing by a celebrity had a

positive impact on the behavior of the consumers. Many other studies have also looked at

intention to purchase (Fink, Cunningham, & Kensicki, 2004; Koernig, & Boyd, 2009; Ohanian,

1991). Elberse and Verleun (2012) studied the economic value of athlete celebrity endorsement

and found that, in addition to athlete endorsements providing a positive payoff to a company’s

decision to sign an endorser, endorsements are associated both with increasing sales in an

absolute sense and with comparisons to competing brands. Furthermore, sales and stock returns

jumped noticeably with each major achievement by the athlete endorser (Elberse & Verleun,

2012).

Celebrities and celebrity athletes provide benefits that unknown endorsers cannot.

Celebrities stand out among the advertising clutter, hold viewer attention, contribute to brand

name recognition and transfer positive qualities such as physical attractiveness and likeability to

the brand (Dyson & Turco, 1998; Erdogan & Kitchen, 1998; Charbonneau & Garland, 2005;

Ohanian, 1990). Athlete endorsers have been found to be especially effective when matched with

products or services that are used in their particular sport (Till, 2001; Boyd and Shank, 2004;

Peetz, Parks & Spenser, 2004; Charbonneau & Garland, 2006) and provide particularly

compelling endorsements for products that have contributed to their sporting performance and

success (Dyson & Turco, 1998; Stone, Joseph & Jones, 2003). Atkin and Black (1983) traced

some of the earliest use of celebrity athletes in advertising, noting that the celebrity athlete’s

presence generated attitude change in a positive direction.

Models and Theoretical Foundations

An examination of endorser literature shows that selection criterion of an effective

endorser is primarily based on two main models, the Source Credibility Model (Hovland, et al.,

1953; Hovland & Weiss, 1951; McGuire, 1968) and the Source Attractiveness Model (McGuire,

1985). The Source Credibility Model suggests that an endorser will be effective when they are

viewed as having expertise and trustworthiness (Hovland et al., 1953; Hovland & Weiss, 1951).

In 1990, Ohanian added the dimension of attractiveness which has since been associated with the

model.

Ohanian’s (1990) source credibility scale includes the attributes expertise, trustworthiness

and attractiveness as the critical components in determining an endorser’s credibility and thus

ultimately their effectiveness. Researchers were concerned with the limitations of measuring

celebrity endorsements with just the three factors of Source Credibility (expertise,

trustworthiness and attractiveness), and acknowledged that the Source Attractiveness factors

were also important measurement determinants. With this understanding, McGuire (1985)

developed the Source Attractiveness Model which theorized an endorser’s effectiveness was

based partially on the attributes of similarity, likability, and familiarity. Attributes included in

this model have been shown to enhance the target audience’s perception of an advertisement

(Baker & Churchill, 1977) and increase purchase intentions (Petroshius & Crocker, 1989).

The Source Credibility Model (Hovland, et. al. 1953; Hovland & Weiss, 1951; McGuire,

1968) and Source Attractiveness Model (McGuire, 1985) are commonly referred to as the two

major models outlining the factors associated with endorser effectiveness. Both models are

rooted in social psychology research and were originally applied to the study of communication

(Ohanian, 1990). As Boyd and Shank (2004) explained, most research on celebrity endorsers has

explored the characteristics of the source that contribute to the effectiveness of the message.

Brooks and Harris (1998) added to this stating, “both the source attractiveness and source

credibility models have been validated to some degree in the literature, and each provides an

intuitively appealing reason why an athlete should be an effective endorser” (p. 41).

The six attributes associated with the Source Credibility and Source Attractiveness

models (expertise, trustworthiness, attractiveness, similarity, likability, and familiarity) have

been shown as elements involved in this endorsement process. As McCracken (1989) notes, both

models have been confirmed by research as well as been validated by several studies. These two

models have been used as a “necessary part of our understanding of the endorsement process”

(McCracken, 1989 p. 311). With the use and application of both source credibility and source

attractiveness firmly tested, Ohanian (1990) found that the source attractiveness characteristics of

similarity, likability and familiarity were too similar to the attractiveness characteristic of source

credibility to the point where it created an overlapping in measuring validity between the two

models.

Braunstein and Zhang (2005) realized there was a need for a scale that took into

consideration the various theoretical frameworks associated with celebrity endorsers and

systematically measured the star power of athletes. It was the first scale developed to specifically

assess celebrity athlete endorsers (“stars”) through the Generation Y market, i.e. current and

future decision­makers of society and the focus of marketers interested in capturing future

purchases (Holton, 2000). Braunstein & Zhang (2005) developed the Scale of Athletic Star

Power (SASP) to assess the powerful attributes exhibited by celebrity endorsers that potentially

influence consumer purchases of sports products. SASP’s five factor scale are labeled as

professional trustworthiness, likeable personality, athletic expertise, social attractiveness, and

characteristic style. The SASP model provides a well­developed combination model between the

source credibility and the source attractiveness model, but the attributes lack detailed description

and distinction in the Braunstein and Zhang (2005) study and have therefore not been used

notably in research since shortly after it was introduced.

Although the source credibility scale and scale of athletic star power resulted in the

development of valid instruments, more research is needed to gain a more complete

understanding of the endorsement process and the use of multi­faceted and yet somewhat

interrelated characteristics. The largest gap in the literature found during the literature review

was the lack of a comprehensive model which utilizes all six factors included in the Source

Credibility and Source Attractiveness Models. Ohanian’s (1990) Source Credibility Scale has

been referenced as the most complete scale examining endorser credibility.

Theoretical foundations for a study of audience perception of credibility and purchase of

the endorsed product include symbolic interactionism (Mead,1964; Blumer,1969). Social

interactionism is a sociological perspective that is influential in the sociological discipline based

on the premise that people act toward things based on the meaning those things have for them,

and those meanings are derived from social interaction and interpretation. Both individuals and

society cannot be separated far from each other because they are both created through social

interaction, and one cannot be understood in terms without the other. Behavior is not defined by

forces from the environment or inner forces such as drives, or instincts, but rather by a reflective,

socially understood meaning of both the internal and external incentives that are currently

presented (Meltzer et al., 1975).

Burke’s identification theory relates to this study as we measure the extent of the

audience’s identification with the sports endorsers. In A Rhetoric of Motives (1969), Kenneth

Burke selects identification as the key term to distinguish his rhetorical perspective from a

tradition characterized by the term persuasion. Burke explains identification as a process that is

fundamental to being human and to communicating. He contends that the need to identify arises

out of division; humans are born and exist as biologically separate beings and therefore seek to

identify, through communication, in order to overcome separateness. As Burke asserts,

"Identification is affirmed with earnestness precisely because there is division. Identification is

compensatory to division” (1969, p. 22). To overcome our division and our guilt, we look for

ways in which our interests, attitudes, values, experiences, perceptions, and material properties

are shared with others, or could appear to be shared. We continually seek to be associated with

certain individuals or groups (and not others), attain some position in the hierarchy of social

relations, and relieve ourselves of the guilt we bear.

Purchasing Power of Athlete Source Credibility

Research has examined the attributes of celebrity endorsers among various target

audiences, and many studies have applied the attributes of source credibility and source

attractiveness models. In addition to positive results of these models attributes on consumers’

awareness and support of these endorsers and the products they represent, some research has also

positively associated purchase intentions among consumers (Sundar, Hezekiah & Shafi, 2014;

Chavda & Sethi, 2013). Research approach and findings are lacking in measuring actual

purchases, in addition to intention, of sports celebrity endorsed products. The reality of celebrity

endorsement is to capitalize on the sports celebrities’ connection with the audience and improve

and maintain sales of the sponsoring company’s products and services. Sports celebrity

endorsements create a distinct and highly profitable target market for an advertiser that uses such

a player to endorse a product; therefore, our research will purpose to measure the source

credibility attributes as chosen by respondents with the respondents’ purchase of sports celebrity

endorsed products. To accomplish this measurement, we propose focusing on the company that

dominates both the net worth and the sports endorsement commitments of athletes. This

company is Nike.

When Nike signed basketball star Lebron James to an endorsement contract in 2008, its

stock rose three quarters of a percent, indicating an agreement with market investors that signing

James would be beneficial (Fizel, McNeil, Smaby, 2008). Nike’s 2015 sponsorship and

endorsement commitments total $6.192 billion (SEC/Nike annual reports). Nike signed a lifetime

deal with NBA Cleveland Cavalier’s Lebron James, the largest single­athlete deal in Nike’s

44­year history and the first time Nike has officially given a lifetime deal. The exact amount was

not known when this literature review was created, but Nike spokesperson said that LeBron’s

new deal will easily surpass the 10­year, $300 million deal that another NBC star Kevin Durant

signed with Nike in 2014 (Williams, 2015). This latest Nike deal with LeBron is not available on

an official report for Nike sponsorships and endorsements, but the following athletes are listed as

the most recently posted top 10 Nike highest paid endorsement deals: 1. Michael Jordan, $60

million a year, 2. Tiger Woods, $20 million a year, 3 ­ 7. LeBron James, Roger Federer, Rafael

Nadal, Rory McIlroy, Derek Jeter, $10 million a year, 8. Maria Sharapova, 8.75 million a year, 9.

Kevin Durant, $8.5 million a year, 10 – 11. Kobe Bryant, Cristiano Ronaldo, $8 million a year.

Nike market value in early 2015 was $49.36 billion; sales totaled $25.28 billion (Nike.com;

Barrabi, International Business Times).

Nike primarily targets consumers who are between 18­40 years of age. The goal is to

equip teens under the age of 20 with athletic apparel, especially in sports like football and soccer.

Nike targets households and teens that have a particular desire to look athletic and fashionable at

the same time. All socioeconomic classes are targeted as part of the segmentation of Nike’s

demographics. Most marketing occurs in the United States for Nike, but this is to increase the

market share of their athletic apparel more than it is to advertise their footwear. No single

customer accounted for more than 10% of Nike’s overall sales in the last year, proving that the

company has a very diversified market (Lutz, 2015; Nike Responsibility, 2014).

Research Questions

This study will integrate the three attributes of the source credibility model into the level

of consumer/respondent’s purchase of Nike products and into the respondent's’ connection and

identification with the Nike sports celebrity endorser. The survey will measure these attributes

and responses to answer the following research questions:

RQ1: Do the Nike athlete endorsers receive high source credibility numbers?

RQ2: How do the characteristics of source credibility (expertise, attractiveness and

trustworthiness) differ in total responses, which are higher and lower?

RQ3: Does high source credibility translate into purchase of the endorsed Nike product

brand?

RQ4: Do respondents identify quality of athletic products with athlete endorsed products?

Methodology and Measurement Scale

This study implemented the source credibility model to create a survey which equally

measures all three attributes: expertise, trustworthiness, attractiveness. Expertise is defined in

this study as “the extent to which a communicator is perceived to be a source of valid assertions”

(Hovland et. al., 1989 p. 311). Erdogan (1999) also explained that expertise refers to “the

knowledge, experience or skills possessed by the endorser” (p. 298). McCraken (1989) defined

trustworthiness as “perceived willingness of the source to make valid assertions” (p. 311). The

items pertaining to this dimension referred to the believability of the endorser. Attractiveness is

another variable often used to explain endorser effectiveness. Physical attractiveness is not the

only variable viewed in the attractiveness dimension, it can also include characteristics such as

personality and athletic ability (Erdogan, 1999).

The source credibility section of the survey was designed based on the compilation of

methods and approaches used by other researchers.

Measurement Scale for Source Credibility Attributes

Attribute Key terms Definition Theoretical Background Expertise athletic performance athlete’s individual achievement Braunstein & Zhang, 2005 competitiveness and athletic capabilities (skills, Ohanian, 1990, 1991

experience winning record), level of Ross,James & Vargas2006 knowledge performance & dominance in Aria, 2010 skill level sport, competitive relationships sportsmanship with other athletes Trustworthiness dependable appealing, interesting off­field/ Jowdy & McDonald, 2002 honest, reliable court story of athlete, message Neale & Funk, 2006 role model that reflects athletes’ personal Ohanian, 1990, 1991 role model value, ethical behavior, positive attitude and interaction w/ fans Attractiveness physical appearance athlete’s physical quality & Ross, James &Vargas2006 fitness characteristics that fans find Ohanian, 1990, 1991 classy aesthetically pleasing, Gladden & Funk 2002 handsome/beautiful attractive personal style Aria, 2010 athlete’s fitness level

This study used the Top 10 list of Nike sports celebrity endorsers and created surveys

through which respondents chose and ranked their top two celebrity athletes (from the list of

Nike sports celebrity endorsers). The same survey was completed for each of the respondents’

two athletes chosen. Surveys included questions measuring each of the source credibility model

attributes (expertise, trustworthiness, attractiveness). Answers were selected from Likert scale

options consistent throughout the survey. The survey also included questions related to the

respondents’ purchase of products endorsed by their chosen celebrity athlete. The survey

contained items regarding demographic information (age range, ethnicity, household income,

education level), number of sports products owned/purchased over the past year, and items

regarding brand loyalty and specific celebrity endorser. The measures for source credibility

model attributes were listed for each of the two athletes the participants chose.

Institutional Review Board approval was granted by two universities, Regent University

in Virginia for which the study was required and Hannibal­LaGrange University in Missouri

through which the survey was administered. Surveys were administered in hard copy format by

the three researchers of this study. In correlation with Nike’s target audience demographic, the

research team conducted surveys in locations in which 18­40 years olds were typically present.

These venues included athletic facilities, college campuses, small group sessions and random

distribution of samples in public locations. Surveys were administered in standard fashion by

each researcher in several different states including Maryland, Tennessee, Illinois and Missouri.

Surveys included a message at the beginning which was also articulated verbally during

distribution, indicating the overall purpose and voluntary, confidential nature of the survey as

well as the need for accuracy, the freedom to choose which questions to answer, and the consent

to use the data provided by the respondents’ participation in and completion of the survey.

Instructions were given at the end of the survey to fold the paper in half and leave it with the

researcher/survey administrator.

At the end of the data collection process, completed surveys were stored in private,

protected areas. The names and identities of respondents are anonymous. There is no record of

the respondents who completed the survey. Surveys were processed and coded by the

researchers, and all data was stored in private, non­networked computers. Survey data entry was

conducted by the three researcher on private systems and shared with one researcher to compile

and store the master data list. All analyses of the survey data were conducted using IBM SPSS

Statistics software. Results were shared between and assessed by researchers.

Findings

Participants provided survey answers with a total of N=266 being utilized within the

results section.

The Cronbach Alpha test ran on the data found that the data is reliable; however, when

Regression Tests were run and all data was combined and tabulated for the variables, expertise,

attractiveness and trustworthiness, they were found not predictive.

For RQ1: Do the Nike athlete endorsers receive high source credibility numbers?

Findings indicate that, average credibility scores were high, 212 out of 266 survey respondents

responded yes, this comprises 80.6% of respondents.

For RQ2: How do the characteristics of source credibility (expertise, attractiveness and

trustworthiness) differ in total responses, which are higher and lower? Notable differences were

found between attractiveness (3.9885), trustworthiness (4.0642), and expertise (4.2464).

For RQ3: Does high source credibility translate into purchase of the endorsed Nike

product brand? In taking a closer look at Q54, respondents were asked "Using your best

estimate, how many products do you own that are of the brand endorsed by this (favorite

selected)athlete?" Results showed the following correlations:

Respondents were also asked in Q55, "How many products of this brand have you

acquired in the last year?"

In particular with products purchased in the last year (Q55), results show that

respondents rank attractiveness highest in reasons they purchased Nike products and lowest in

source credibility.

For RQ4: Do respondents identify quality of athletic products with athlete endorsed

products? Findings were close in totals but indicate that overall 50.5% of respondents do not

believe products are higher quality than those endorsed by other athletes, and 54.3% of

respondents do not believe products are higher quality than those not endorsed by any athlete.

Data showed that the more respondents agreed with survey statements, the less they were

likely to buy product. Results indicate that the scale of source credibility is not a good source of

what people will purchase.

Contributions

This study offers additional research and findings of product purchase associated with

source credibility characteristics, and it measures the level of consumer purchase of Nike

products with the respondent’s connection and identification with a specific Nike athlete

celebrity endorser. This study establishes a bridge between theory application in the marketing

and branding industry.

Based on the age range of our participants, a majority (N=139, or 52.3%) are ages 18­25,

which would place them in the Generation Y category. Research regarding generation Y states

that generation Y is a unique demographic with dynamic social and cultural impact and that

marketing toward this generation has been increasing as they are a growing market, especially

for sports marketers (Bush, Martin, Bush, 2007; Dobele, Toleman, Beverland 2005; Noble,

Haytko, Phillips, 2009).

Limitations

This study is limited in scope because it was conducted with convenience sampling and

should have included more random sampling. The lack of variety in ethnic backgrounds of

respondents limits the application of the study with 168 out of 266, 63% of respondents,

Caucasian. The second largest ethnic group was African Americans with 77 out of 266 = 29%.

Products owned and recently purchased were coded in increments of 10 which

aggregated into categories too large to identify specifics, particularly in 0­9 as the majority of

respondents were in that first range. Fifty­four percent of respondents answered within the first

range of 0­9 for how many products they owned from endorsed brands; 149 out of 266, 56%,

responded with the first coding option that they owned product endorsed by their favorite Nike

athlete.

Conclusion ­ Future Research

Suggestions for future use of this research survey include coding source credibility

characteristics per athlete and measuring each Nike athlete with his/her source credibility totals,

and then using those source credibility totals per athlete to determine if certain source credibility

characteristics have a significant relationship with purchase of Nike products or perceived

quality of athletic products.

Implications of the study may include looking into the influence viral marketing has on

sports fans buying potential as a target market. There may be at least some influence on viral

marketing when it comes to buyer potential due to the successful social media campaigns within

the last decade (Bush, Martin, Bush, 2007; Dobele, Toleman, Beverland 2005). Researchers have

noted viral marketing as a strong, solid way to communicate with consumers while they are

bombarded by brands marketing numerous products and the evaluation can be stalled. One of the

strongest aspects of viral marketing in this digital age is how it has transformed word­of­mouth

referrals, catapulting the visibility of brands through sources such as Twitter, Facebook, Vine,

Snapchat, Instagram, etc. (Bush, Martin, Bush, 2007; Dobele, Toleman, Beverland 2005). It

would be interesting to analyze how many people within this study actively use social media to

keep track of their favorite athletes, or even into how many have seen and are fans of the movie

Space Jam , as the top two athletes are Lebron James and Michael Jordan.

Future research using these surveys could include second favorite athlete choice and

should process combined findings for top 2 Nike athletes’ source credibility and resulting Nike

product ownership. Total responses for surveys completed was 532. Half of that, 266, was used

for this study.

Another area for potential further research would be analyzing the influences or impacts

that generation Y research supports. Generation Y consumers represent a large target market and

display strong brand loyalty, making the implications of their specific influences over celebrity

sports brand financial support an interesting avenue that has not yet been extensively covered

(Noble, Haytko, Phillips, 2009; Stevens, Lathrop, Cheri, 2003).

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