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Endorsements 2 Point 0

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Andy RoddickMost amateur athletes have recurring dreams about that future big payday. They assume that the money will start pouring in once they sign a contract with a professional organization in a large American sports league. For many, that day never comes. For those who do “go pro” they will quickly realize that the first contract does not pay much. The second and third contract will garner the big bucks. In all actuality, though, if an athlete wants to truly strike it rich, he will be the best at his trade, and command most of his earnings off of the field of play.

Tiger Woods, Phil Mickelson, LeBron James, and a host of other superstar athletes make more money per year in endorsements than in salary and winnings. An endorsement is simply an athlete giving approval, sanctioning, and support to a product or service. The product or service being endorsed hopes to benefit from a boost in image through the association with the athlete…with the intention of earning more profits in the end. The athlete receives compensation for endorsing the product or service.

In the past, endorsements included an athlete making public appearances, recording television commercials, and posing for billboards, often in exchange for an up-front payment. Times are changing. Many companies want to know that they are getting value from their endorsers, and have decided to strike deals that include the athletes as a part of their core business. For instance, you have undoubtedly seen Mike Golic on TV promoting Nutrisystem. He reveals a unique URL that provides a discount to those who sign up for the service. This serves as a tracker, which may be built into his payout per the contract Golic signed with the company. Expect to see more of this in the future.

Dwight Howard

Twitter and Facebook will continue to promote these new types of endorsements. Dwight Howard has over 350,000 fans on his Facebook page. A company may ask his agent to post a link on that page to the company’s product or service. That same company may buy a certain number of “endorsed tweets” on Twitter. The links and tweets can have certain trackers built in, to see how much value the athlete is bringing to the company. The new mediums allow companies to track results, but also integrate the strong communication features of these social networks. A brilliant viral campaign or a fun contest can be much more beneficial than a paid tweet.

In sum, I believe that in the future, we will see more athletes working with companies looking for endorsements, instead of working for them. Gone are the days of huge up-front payments for a plain old endorsement. Endorsements 2.0 is about using the new mediums effectively and paying athletes for the true value that they bring to the table. Dream about that for a while.

Photo Credits: Preppy Princess and Bettorsedge

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