There are not many people who can turn down £3m without a second thought, but David Beckham did just that last week when he failed to reach an agreement to renew his contract as the face of Gillette.
Beckham’s representative Simon Fuller is said to be pushing for profit-sharing agreements in his marketing and sponsorship deals and rejected Gillette’s offer of a flat fee for a 12-month extension.
There was speculation earlier this year that Gillette was planning to let Beckham go after the company signed Thierry Henry, Roger Federer and Tiger Woods for a global “Champions” campaign in January. But when Beckham signed for US team LA Galaxy talks turned to extending his contract in a bid to capitalise on the hype as “Brand Beckham” hits the US.
Best Gillette could get
Despite its famous “Best a man can get” strapline being familiar to an entire generation of men, few would describe Gillette’s advertising as being at the cutting-edge of creativity. The decision to sign Beckham in 2004 seemed, at the time, to be a clever strategic move. But if it was hoped that he would inject some personality into the brand’s rather serious image, and many would argue that strategy has failed.
King of Shaves founder Will King says: “It was probably a smart move early on, but these days Gillette doesn’t need David Beckham any more than Beckham needs Gillette. We have always aligned ourselves with challengers. We worked with John Terry in a campaign, when he hadn’t yet been made England captain. He brought us a certain stature.”
Others believe that a company as dominant as Gillette – the company claims it has a 76% share of the shaving market – should have more confidence to set its own marketing agenda rather than following the trend of aligning itself with celebrities.
Gillette’s main rival, Wilkinson Sword, is unusual in that it does not use any famous personalities in its advertising. The trend in the grooming market of using “iconic” figures seems to have worked well for brands targeting females but men do not necessarily have the same desire to emulate a lifestyle or buy into a “dream”. Males are traditionally more focused on the form and function of a product, say experts.
Where Beckham has been particularly successful, they believe, is in his relationships with brands that rely on his sporting performance rather than a representation of his lifestyle. Beckham earns an estimated £10m a year from his deal with Adidas to promote Predator boots, shin pads and general sportswear and he is understood to have been worth more than £300m in marketing revenues to Real Madrid during his time with the Spanish club.
However, it is true that the use of celebrities to endorse male grooming products works better in less developed markets. In those markets, simply being backed by a famous face can be enough to drive sales. In more developed markets brands may need to supply the male consumer with more sophisticated information.
Industry insiders are concerned that this latest move by Fuller on Beckham’s behalf will “set a precedent” on endorsement deals and that it will become the norm for celebrities to demand profit-share contracts. Recently, Fuller has concentrated on global campaigns for Beckham with large companies such as Motorola, Pepsi and Coty, and moved away from local deals with the likes of Marks & Spencer in the UK and Castrol in Japan.
The globalisation of Beckham will be catching the eyes of young sporting superstars looking to maximise their earning power. Fuller’s landmark agreement, worth a reputed $250m (£124m), to bring Beckham to LA Galaxy is without parallel, and though Gillette hasn’t come off, his deal-making skills has raised the bar in celebrity endorsement.