Examining the impact of celebrity endorsements across consumer segments: an empirical study of Tiger Woods’ endorsement effect on golf equipment

This paper empirically examines whether endorsement effects differ across consumer types–expert vs. novice. The study uses aggregate sales data from the golf equipment industry covering two unique retail channels (on-course and off-course) to estimate endorsement effects for Tiger Woods. The study finds that Tiger Woods’ endorsement of Titleist woods had a greater effect in the off-course retail channel frequented by novice golfers than the on-course channel frequented by experts. I determine that such an effect led to over 28 thousand more Titleist woods being sold and an additional $9.2 million in revenue for the 9 months prior to Tiger Woods switching to endorse Nike apparel and equipment. I also determine that Tiger Woods’ endorsement led to over $500,000 in additional profit for each of the last 5 months of his endorsement contract with Titleist, which provided a 49% Return on Investment from US sales of Titleist woods, putters, and irons. Lastly, I present preliminary evidence to explain a possible reason why the observed endorsement effects varied by consumer types—Tiger Woods’ endorsements were informative to consumers. Specifically, I find support indicating Tiger Woods’ endorsement was more informative to novice golfers than experts.