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Long-term plan aids marketing of Michael Phelps
Associated Press

A prototype of a box of Kellogg's Corn Flakes with U.S. swimming star Michael Phelps is seen. Phelps' record-setting performance in Beijing has led to multimillion-dollar endorsement deals, but his road to marketing gold was paved years ago.


Associated Press

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Published: 9/8/2008 12:05 AM

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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.

The pair are going beyond the traditional advertising campaigns used by many past Olympians, though his 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.

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 like 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 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.

Still, swimming is not as widely followed as other professional sports and endorsement deals tend to be smaller and harder to come by. So swimmers have a hard time getting as much endorsement money as, say, golfer Tiger Woods.

"He's probably the most successful swimmer ever. Having said that, it's swimming, not basketball or football," said Andrew Bergstein, associate director of the Center for Sports Business and Research at Pennsylvania State University's Smeal College of Business.

That's why 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 on Sept. 13. 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."

Carlisle does limit the number of Phelps' corporate endorsements, which include Visa, Speedo, AT&T, Omega, Kellogg's, Pure Sport, Rosetta Stone and three to five more coming in six months.

Phelps already has plenty of exposure. After Athens, he landed on a dozen magazine covers and six national TV spots. Octagon created behind-the-scenes videos of swimmers, including one featuring the friendly rivalry between Phelps and Ian Crocker, another U.S. Olympic swimmer.

In 2005, Phelps signed with Matsunichi, a Hong Kong maker of MP3 music players and other consumer electronics, to be its chief spokesman. Phelps has also visited China several times, including a stint with the "Visa Friendship Lanes Tour" to promote the Special Olympics.

"It's that type of thing that bridges the games," Carlisle said.

Carlisle said Phelps wants to go beyond the "superficial, traditional ad campaign" and get involved in activities that promote swimming, inspire children and benefit charity.

To that end, Phelps is donating Speedo's $1 million bonus to a foundation bearing his name to help kids get into swimming. Speedo and its North American licensee, The Warnaco Group Inc., are kicking in another $200,000.

Speedo is also sponsoring his tour of eight U.S. cities, where Phelps will launch an education program to help children achieve their goals called "Dream, Plan, Reach." The program will teach kids to set goals, take responsibility and practice discipline.

"I've learned that through education, planning, goal-setting, and informed decision-making, anything is possible," said Phelps, who was raised by a single mom, in a statement.

Even $100 million in deals for a swimmer.