Often times, people seek out the help of a financial advisor so they know which investments they should be making. Other times, they’ll invest in a collection of stocks through either a mutual fund or a professionally managed portfolio account.
Why do people do this? Because they want to reduce the risk of investing and achieve their financial goals.
So, for the time being, pretend that we’re your financial advisor. We’ll take you through some of the basic do’s and don’ts of endorsing. We’ll show you how to accomplish your marketing goals while reducing risk and maximizing the value of your dollar along the way.
1. Diversify Your Portfolio
Just like a well managed stock portfolio: Diversification is key. Having all of your assets tied to the success of one entity is a recipe for disaster.
Imagine if you had marketed your brand exclusively through Tiger Woods. Think about the damage that would have been done to your brand’s image when his scandal emerged. There is nothing wrong with targeting high-profile athletes, just make sure you diversify your risk among multiple athletes.
Like the stock market, no one can predict exactly which athletes are trending up or down. The best thing you can do is diversify your investments and adopt a balanced endorsement strategy.
2. Focus on Emerging Markets
To understand the value of emerging markets, take a look at what Red Bull has accomplished in the last few years. They have targeted and dominated extreme sports endorsements, and acquired a massive market as a result.
Red Bull has even invented an extreme sport of their own. While we don’t think you need to go to quite this extreme, it is important to realize the underutilized value of emerging markets.
Think outside the box with your next campaign. Instead of going with a handful of NFL players, consider tapping into some influencers in more unique sports. This can give you access to an audience of millions which typically goes unnoticed by the big competition.
3. Drop Underperforming Assets
Did you invest in a few endorsements from an athlete that didn’t meet your expectations? If you followed the advice from tip #1, simply reallocate your investment to other better performing endorsers. If you didn’t, now might be the time to expand your portfolio and find an athlete that’s a better fit.
Keep in mind, however, that the content of the campaign is just as important as the athlete. If the content isn’t up to par, it doesn’t matter who is endorsing it.
4. Seek Portfolios with Low Margins
Creating a strategy whereby you get 1,000 athletes to tweet about your brand one time each is not an effective use of your time. You will spend way too much time creating all those tweets, analyzing the results, and trying to make sense of it all.
There are two ways to build a portfolio with low margins. You can build a large portfolio of athletes and pass the management of those athletes off to someone else…cough like opendorse. Alternatively, you can build a smaller (but still diversified) portfolio of influencers that won’t take you days to keep organized.
However you choose to do it, keep in mind that managing each influencer who will be endorsing your brand involves time and effort. Once you have a few influencers lined up to endorse your brand, you’ll be better off making gradual changes instead of rewriting your strategy every week.
5. Commit to Investing Over the Long Term
While endorsement marketing is good at quickly developing new customers for your brand, establishing trust with an influencer’s audience is equally important. Also don’t neglect the impact of endorsements on your existing customers.
We’re not suggesting that you wait 12 months before determining the effectiveness of your endorsements. However, we would encourage you to watch how your social media presence builds over time.
Look at the quality of conversation about your brand on social media. Review what is happening with the audience that engages with endorsements. Remember, not everything is visible within minutes of endorsement deals.
6. Look at the Price to Earnings Ratio
While there is something to be said for going with your gut, don’t let your emotions cause you to make a poor deal. If you’re spending more dough to get higher tier athletes, make sure you’re getting the results that justify it.
A great way to analyze an athlete is to check out their Cost per Engagement estimates. If you’re doing this on your own, simply divide your costs by the amount of engagements (clicks).
If you’re up and running on opendorse, head over to that athlete’s profile. Better yet, search for your next athlete by sorting on Cost Per Engagement.
While other metrics might be more useful to your brand’s goals, cost/engagement will give you a good first impression of whether that athlete’s endorsements are cost effective or not.
7. Buy Low, Sell High
Whenever possible, look to profit from increased exposure on certain athletes. Follow athletes on social media and be aware of trends.
Being able to utilize athletes on their way up in popularity can deliver you really effective endorsements while they’re still cheap.
8. Don’t Be Afraid to Ask For Help
Unless you do investment banking for a living, you’re likely getting help along the way. It’s no different with endorsement marketing. We encourage you to utilize this blog to the fullest. If you haven’t already, sign up for our newsletter.
And by all means, contact us at any time with any questions! We would love to help you out along your journey of creating effective marketing campaigns with athlete endorsements.
Start Building your Endorsement Portfolio
Follow these tips and you could become the next Warren Buffet (of endorsement marketing). Did we miss anything? Have any questions? Feel free to shoot ‘em our way either by mail or in the comments below.
Here’s a summary of the 8 tips you should learn from professional investors:
- Build a portfolio of athletes with different backgrounds
- Pursue emerging markets aggressively, as they are usually undervalued
- If an athlete isn’t performing, sell!
- Don’t create an endorsement strategy that takes too much time to manage
- Be mindful of the long-term results of your campaigns
- Always review metrics that are relevant to your goals before purchasing endorsements
- Be able to ride spotlights on individual athletes as much as possible along the way
- Do your research. Sign up for the newsletter. Ask us anything.