Endorsements

I have to acknowledge that I have never understood celebrity or athlete endorsements of consumer products. Wheaties is almost as well-known by its second name, Breakfast of Champions, and has also always carried endorsements by well-known athletes, champions every one. That’s been true for as long as I can remember, and that goes back almost to WWII. Did I ever eat Wheaties? You bet, but not because I thought it was going to turn me into a Decathlon champion.

You don’t have to watch much TV or read very many magazines or newspapers to see this common theme. In fact, the most celebrated athletes of the current generation, Michael Jordan and Tiger Woods, make far more from endorsing products than from athletic endeavors.

Now, call me a skeptic if you will but I’m just not willing to believe that Nike makes the best golf balls, just because Tiger Woods endorses them. Golfers tell me that balls are not only pretty much the same, they are required by USGA rules NOT to go faster than a certain speed, no matter how hard you hit them.

That doesn’t mean I don’t have a tremendous regard for Tiger, I do. I even enjoy watching him on TV, and I don’t even play golf. But when and if Tiger’s contract with Nike ever runs out and he starts endorsing Top Flite golf balls, I don’t think it is because Top Flite balls just suddenly got better!

This endorsement thing gets a little wilder when you start considering endorsements of products that have nothing to do with athletic prowess or ability to sing or act. I’ll let you contemplate that a little bit as I am sure that you can easily remember endorsements of products by people who have no reasonable basis for knowing about the merits of a particular product or its application to your needs.

In that vein, I was somewhat surprised to see a high visibility lender (one that advertises on TV a lot) being endorsed by a NASCAR driver. What in the world does he know about financing homes? I don’t follow auto racing so I don’t even know this guy. Maybe he has an MBA and just races cars for fun, but I doubt it. The point is that there must be a lot of people who do know him and admire his prowess as a race car driver. I just don’t see why they would take his recommendation about using his sponsor as their lender.

I also think that there is a difference between taking someone’s recommendation as to what breakfast cereal to buy and getting home financing. One is going to cost you a few dollars if you make a mistake. Making a mistake on home financing will cost you thousands. It may well be that this lender’s target market is the people who DO know this guy and who would be swayed by his recommendation! That’s why they are paying him to endorse their company and why they are spending all that money on TV advertising.

If you’re thinking about buying a home, you’d better ask yourself if YOU identify with and are a part of this target market. I’m not making an accusation here, just an observation, but someone has to serve the least sophisticated, least educated half of homeowners. Perhaps an endorsement by a NASCAR driver is a way to their hearts and minds.

As for you, dear reader, I certainly hope that when you want to get financial advice, you choose a financial professional. Get your recommendation from your CPA or financial planner or someone who has experience in these matters. I think that you’ll be more pleased with the outcome.