The Full-Stack Endorsement Model: An Innovative Approach to Athlete Marketing Deals [Exclusive]

  Photo by chuttersnap on Unsplash

Photo by chuttersnap on Unsplash

Historically, the eye-ball test has been used to determine the value of an athlete's involvement in athlete-brand marketing and advertising deals.

It goes something like this: Brand approaches Athlete with a potential deal. Due to the supply of professional athletes and demand for their endorsements, Athlete knows he or she has the leverage, so his or her representatives set a high price. Brand agrees to the deal because of Athlete's apparent popularity among Brand's target audience — even though Brand has no idea how its investment in Athlete will create a definitive ROI.

Oh, how the times are changing!

TV ad spending, which decreased for the first time since 2009, is expected to continue declining over the next five years. As more sports fans cut their cords and ratings continue to fall for even the most popular sporting events (like NFL games), ad spending is transitioning from traditional media (like TV, radio and newspapers) to digital media (the Internet).

This transition brings a new approach to how brands will arbitrate athlete-brand marketing and advertising deals, and how they will leverage unprecedented digital tracking, attribution and measurement capabilities to determine the success of these deals.

For athletes who have a strong Internet-driven brand — a large, engaged, ever-growing following and resounding influence over their fanbase — this shift in advertising is a major opportunity to scale marketing earnings, as well as to double, triple or dare I say 10x the earnings they would otherwise make.

Understanding Digital Advertising Metrics

In traditional advertising, there are only a few ways to (somewhat accurately) measure paid media: viewership, phone calls and website visits. Everything else is either an educated guess or a rough estimate.

The Internet continues to revolutionize how advertisers measure, attribute and track the performance of their campaigns, ultimately providing a 360-degree, completely transparent view of any given digital campaign.

Digital advertising metrics include:

Cost Per Mille (CPM)

The price of 1,000 advertisement impressions (the number of times an ad is displayed)

Cost Per Click (CPC)

The price of one click on an ad

Cost Per Engagement (CPE)

The price of an action (e.g. download, watch, landing page view) associated with an ad

Cost Per Visit (CPV)

The total average cost of acquiring a website visitor

Cost Per Acquisition (CPA)

The total average cost of acquiring a paying customer

Lifetime Customer Value (LCV)

The total amount an average customer spends with a business over the entirety of the customer's relationship with it

Cost Per Information (CPI)

The price of acquiring someone's personal data (e.g. telephone number, email address, birthday)

Athlete-Brand Marketing and Advertising in the Digital Age

Using some combination of the metrics above, athletes and their representatives can create highly lucrative athlete-brand marketing and advertising deals, which allow athletes to be compensated according to his or her ability to produce pre-determined metrics.

For example, if an athlete partners with an e-commerce brand, the athlete should be compensated for the:

  • Number of website visitors the athlete drives to the brand's website (CPV)
  • Amount of personal data points the brand collects, directly attributed to the athlete (CPI)
  • Number of sales the brand makes, directly attributed to the athlete (a pre-determined percentage)

If an athlete partners with a brand that sells products or services offline, for example, the athlete should be compensated for the:

  • Number of impressions the athlete generates for the brand on his or her digital platforms and channels (CPM)
  • Number of actions people take with the brand, directly attributed to the athlete (CPE)
  • Number of website visitors the athlete drives to the brand's website (CPV)
  • Amount of personal data points the brand collects, directly attributed to the athlete (CPI)

Determining the Value of Each Metric

To understand the monetary value of each of these metrics, there are two different approaches:

  1. For metrics like CPM, CPC and CPE, use benchmarks (most of which can be found in a Google search). If an athlete has an exceptional amount of followers and influence, add 30% to account for this "added value."
     
  2. For metrics like CPV and CPI, consult with the brand at hand, since each company's CPV and CPI vary. However, most company's should know (or be able to calculate) these metrics.


Creating an Athlete-Brand Digital Marketing Campaign

To create, deploy and complete a successful athlete-brand digital marketing campaign:

  1. Determine the length, goals and expectations of the campaign.
     
  2. Identify the relevant metrics for inclusion in the campaign.
     
  3. Assign dollar values to each metric, based on relevant benchmarks and brand-provided data.
     
  4. Arbitrate how all metrics will be measured, attributed and tracked, and who will be responsible for performing measurement, attribution and tracking.
     
  5. Build a comprehensive digital marketing strategy (including the converged media model) that allows for the inclusion of as many metrics as possible, while scaling the campaign's exposure, engagement and worth.
     
  6. Ensure all measurement, attribution and tracking mechanisms are tested and put in place prior to launching the campaign. 
     
  7. Create a compensation schedule for the brand to pay the athlete, including base compensation and metrics-based compensation.


A Win-Win for Athletes and Brands

However you slice it, this results-driven model is truly a win-win for athletes and brands.

For the latter group, it keeps athletes honest about the strength of their personal brand, following and influence, therefore minimizing a brand's marketing and advertising waste.

At the same time, it generously rewards athletes who can produce desired results via their large, engaged, ever-growing following and resounding influence over their fanbase.

About the Author:

Josh Hoffman is the Chief Strategy Officer at The Institute for Athlete Branding and Marketing. Connect with him on Twitter and LinkedIn.