Callaway Hires Justin Timberlake

Justin Timberlake has proved he can act as well as sing. Now Callaway Golf Co. is about to discover whether he has a flair for advertising too.

Mr. Timberlake, named in December as Callaway's creative director, helped craft a new marketing campaign for the golf-equipment maker that tees off this weekend. Timed to coincide with the Farmers Insurance Open, a PGA Tour tournament that begins this week, Callaway is hoping the campaign will get it out of the rough it has been in since the 2008 recession.

The marketing effort features golf pros such as Phil Mickelson and Annika Sorenstam using Callaway products to perform jaw-dropping golf feats on the Las Vegas Strip. One TV ad shows golfer Alvaro Quiros on a floating platform on the strip, hitting a golf ball 310 yards over the Bellagio fountain.

Callaway Golf

Justin Timberlake is Callaway's creative director; new ads feature professional players performing extreme feats in Las Vegas.

In another, several golfers including Ms. Sorenstam hit balls from rooftop to rooftop along the strip. Helicopters fill in for golf carts.

"We wanted to make a statement that was more rock 'n' roll," said Mr. Timberlake, who has been a paid endorser for Callaway for several years but isn't in any of the new ads. Mr. Timberlake worked with Factory Design Labs, a Denver ad agency that began creating the new pitch in April 2011.

A surge of young players has lately been getting attention on the PGA Tour, such as last year's U.S. Open winner, Rory McIlroy, who was 22 years old at the time. Callaway—whose average customer is about 55 years old—is hoping the ads will help it take advantage of that "youth movement" and attract younger consumers.

"Being hip and contemporary has to be part of the marketing plan" in order to attract new and younger golfers to the brand, says Jeff Colton, Callaway's senior vice president of global brand and product.

Callaway, based in Carlsbad, Calif., reported losses in both 2009 and 2010 as well as for the first nine months of last year. It reports fourth-quarter results on Wednesday, with losses expected to continue. It is losing market share to competitors such as AdidasAG's TaylorMade, according to Wall Street analysts.

After suffering during the recent recession, golf-equipment sales have begun to come back in the past year. Sales of clubs and other hard equipment—balls, clubs, bags, gloves and footwear increased 1.2% to $2.4 billion over the past 12 months at golf-course and specialty stores, according to Golf Datatech LLC, a market-research firm. But Callaway has yet to benefit. Its net sales fell slightly in the first nine months of 2011.

Tony Thornley, who was named Callaway's interm chief executive last June—after the previous CEO stepped down—has blamed past marketing efforts for some of the company's woes.

Dan Wewer, an analyst with Raymond James, in a note to investors, said: "Callaway strayed too far from its golfing roots with a marketing message that focused on styling and too little on the benefits of its equipment for the golfers." Mr. Wewer was referring to a marketing campaign that talked about a strategic alliance with Lamborghini, which involved the two working together to develop composite materials that were used in both the cars and a golf club.

Nor has the company kept up with rivals in terms of advertising. Callaway spent $30 million on U.S. ads during the first nine months of 2011, according to WPP PLC's Kantar Media. During the same period, Titleist and TaylorMade shelled out $41.1 million and $38.4 million, respectively. Titleist is owned by a consortium led by Fila Korea.

Callaway has promised investors that it would spend $25 million more on advertising and marketing this year.

Even as Callaway tries to attract younger golfers, it must be careful not to alienate its core older customers. Mr. Colton says he doesn't think that will be a problem. "Even aging golfers want to act younger," he adds.

Mr. Timberlake hopes the new marketing will give the sport a "nice injection of kickassery."


Source: Suzanne Vranica