The marketing world was rocked earlier this month when it was announced that Nike signed their first ever lifetime deal with a professional athlete. The athlete in question is LeBron James with whom Nike already have worked since he came into the NBA in 2003. The exact figures were not announced, but according to some experts, the deal is probably involving figures over $500 million. We are seeing this all over the world, with innumerable companies approaching professional athletes to endorse their brands.
But, does all this makes sense?
To put things as simple as possible, yes; it makes perfect sense for companies to use professional athletes to promote their brands. This is perhaps best seen in the aforementioned relationship between Nike and LeBron.
Namely, in the last fiscal year, Nike sold $340 million worth of his signature shoes alone, not including apparel and other products associated with the best player in the NBA. Keep in mind that these are just American sales. Moreover, Nike’s total earnings multiplied by the factor of three since 2003 when they first signed LeBron. Their stocks increased in value by 1,000 percent. The situation may not be as dramatic with other companies and other athletes, but it is safe to say that companies are doing this because it makes financial sense.
Allure of Professional Sports
The main reason why the numbers are sound when professional athletes are in question is that people simply love sports. It is really that simple. People live for sports and they are ready to set aside a huge portion of their free time to watching their favorite sports and supporting their teams. Indirectly, this makes every brand promotion which includes athletes extremely popular and effective.
There is also the fact that professional sports are associated with success and a healthy lifestyle, which is something that has a huge pull in the world of marketing. No one wants to buy something from a loser. On the other hand, if you have a champion endorsing a product, the potential customer will think the only thing separating them from success is that endorsed product.
Unique Targeting Possibilities
Another important reason why athletes make great brand promoters is that companies can easily target certain parts of the market by smart choices. For instance, they will not use a soccer player to target the U.S. market. Instead, they will go with NBA or NFL players, NASCAR drivers and such. In the rest of the world, a massively popular soccer player such as Neymar or Ronaldo will do wonders for brand promotion.
It is even possible to target different age groups with athlete endorsements. If companies wish to sell to the younger population, all they have to do is find the most popular athlete at the moment and shower them with money. If they are targeting older age brackets, they might go to old champions who also have some of that nostalgia allure working for them. Former tennis megastar Boris Becker endorsing 24Option is the perfect example of this. He is best remembered by people who are older than 20 or 30 and he is the perfect choice for endorsing a service like that which unavailable to minors.
Social Media Pull
With the emergence of social media as some of the most effective and exciting brand promotion arenas, athletes have only become more attractive as brand promoters. Namely, the most popular athletes today all have millions of followers on various social networks and they are able to spread the word of their endorsed products in a natural and yet very irresistible way.
The best thing about this added layer of brand promotion is that it does not cost anyone a dime. The companies simply include a clause where the athlete has to mention their brand every now and then, which the athletes can do without breaking any sweat. It is a win-win situation indeed.
All in all, reaching out to athletes to be brand promoters makes perfect sense for various companies. The pull they have with potential customers is a significant one and no sum is too big to pay for such endorsements.
AUTHOR: James D. Burbank is the editor in chief of BizzMarkBlog and he loves to blog about business and tech. He is the father of two and a major NBA fan.