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How Athletes Are Making Big Money With Product Endorsement

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Tiger-Woods-endorsementSome of the biggest marketing campaigns are being put out with the help of world famous athletes. Brand endorsement deals have been a common practice for many years now, and many of them are bringing athletes good earnings.

You probably already know how a product endorsement looks, since we are being bombarded with them on a regular basis. It is common knowledge that these kinds of deals bring millions of dollars to the athlete. In fact, in some cases, the dollar amount is even hundreds of millions depending on the length of the contract and fame of the sports star.

It has been proven that customers attach characteristics to athletes, and if they get seen with a certain brand of products, the company gets major exposure.

Historically, the biggest earner is the infamous Tiger Woods; the gold superstar that has signed major endorsement deals with Rolex and Nike, together with other smaller brands; who supposedly earns over $78 million annually. The second biggest earner comes from the tennis world, Roger Federer, who makes over $71 million with his Gillette, Mercedes-Benz, and Nike.

The third overall biggest earner comes from the basketball, but it’s probably not who you expect. LeBron James makes almost $60 million with his Nike, McDonald’s Coca Cola, Dunkin Donuts, and Samsung endorsements. But he comes after Kobe Bryant’s $61 million, which is buoyed by Nike, McDonald’s, and Swiss watchmaker Hublot.

Of course these are the numbers of the leaders and absolute superstars in their sports. Other less-known athletes make considerably less money.

There is also the peculiar example of David Beckham, who has made a lot of money for being an underwear model for his own brand in H&M, even though underwear doesn’t have much to do with soccer. With his good looks and his wife’s fashion connections, he’s made a name for himself in the fashion market as well. It seems an athlete can use his fame for any business that is somewhat related to sports successfully. Just ask Tom Brady.

In the last few years we could notice a new way of marketing. It’s called “ambush” marketing, and probably the most infamous example is when Beats Audio “hijacked” the 2012 London Olympics by giving out their headphones to athletes. Those stars were seen with the headphones throughout the games, even tough Beats Audio was not one of the sponsors.

All Hail The King

Lebron James endorsement with beats audio
The most famous example in London is probably when Beats sent a pair of headphones to LeBron James and he liked them so much he demanded the headphones for the rest of USA Olympic basketball team. James got a small stake in the company in 2008, which he then allegedly got $30 million for when it got sold to Apple. Not a bad deal for wearing headphones. You can still find James endorsing Beats’ sports headphones on their official website today, though deal details are unknown.

Beats Audio got a huge boost in sales and brand recognition and supposedly sold over half a billion dollars of product before they paid a single cent for marketing. This incredibly effective way of marketing is now being utilized by many other brands as well, and understandably there are no signs of it ever stopping.

The problem with “ambush” marketing is that it makes the official sponsorships lose their real-life marketing value and the multi-million dollar official sponsorship deals become questionable. Only time will tell how things will change in the future, though we can predict a bright future for all new sports stars.

Form a Smart Endorsement Campaign at Your Company

Not every product endorsement deal is successful. Some of them end before the contract says so simply because they don’t bring the expected results.

The latest research and testing show that the highest benefit for the endorsing company comes if they connect with athletes that are in some way related to their products. The best examples of this are Tiger Woods using Nike clubs or Michael Jordan using Nike sneakers – both deals instill confidence and trust in people. On the other hand, the Pepsi deal with David Beckham ended prematurely because the customers couldn’t relate a sweet soda drink to a sports star like Beckham.

Some of these deals are also related to the private affairs of the sport stars themselves. It is argued that Tiger Woods lost about $30 million in endorsement deals with his public reveal of his adultery.

The majority of the big-time athletes make more money from endorsement deals with companies than with actual winnings or contracts. This tells a lot about the connection between sports and business, which offers the opportunity to get paid very well on top of a sports salary.

The trend doesn’t seem to be stopping here. With some good out-of-the-box thinking and a bit of luck, (and by possibly copycatting the Beats Audio mode) you can successfully use the exposure of athletes for your own business success.

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