A Marketing Formula to Match Eight Gold Medals

What a difference a few chunks of metal make.

With each new gold medal that Olympic swimmer Michael Phelps collected last week, his commercial value skyrocketed. Which is great, of course, but at the moment it's making his agent's job exponentially more complicated.

Little more than a week ago, when he arrived in Beijing, Peter Carlisle was still trying to sell companies on Phelps's marketing potential.

"In one day you're meeting resistance, and they're not seeing it the way you're seeing it," said Carlisle, the head of Octagon Worldwide's Olympics division and Phelps's agent since 2002.

Then his client won his first gold medal. Then another. And a third. Suddenly, Carlisle said, "they're seeing it a little more." After Phelps won his fourth gold medal, becoming the most decorated Olympian in history, sponsors were happy to pay five times more for his services than they were a couple of days earlier.

It's a great time to be an Olympic winner. And not just if you're the athlete.

Phelps's success is also a boost for Octagon, whose McLean sports and personalities division claims more Olympians than any other agency. Like other firms whose fortunes rise and fall with the health of the advertising and marketing industries, Octagon has been feeling the pinch of a lousy U.S. economy. In recent conference calls with staff, its president counseled employees to be judicious in their spending and to watch their travel budgets.

So it's an ephemeral moment, to have hundreds of advertisers suddenly lining up at your door. But even if it's just for one client in a small segment of its overall business, Octagon is savoring the victory.

"You spend four years trying to generate the most compelling opportunities and all of a sudden, in one day, you couldn't possibly do them all," Carlisle said. The demand for Phelps, he said, "is exactly the kind of thing we anticipated . . . but I don't think you could imagine it would be happening at this level."

This is probably the loudest Carlisle or anyone at his firm will proclaim success. Octagon is generally considered to be among the top three U.S. sports agencies in terms of size and influence, but in an industry noted for its sex appeal and swagger, Octagon keeps quiet and does much of its business behind the scenes.

"One can go from rooster to feather duster very quickly," Phil de Picciotto, Octagon's sports and personalities division president, likes to say. "We understand how quickly a landscape can change in any industry."

Indeed, Octagon has evolved from a tradition where agents once were as much the celebrities as their athlete-clients.