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Not a week goes by when at LeapRate we’re not reporting on another Retail Forex broker sponsoring a sports team or personality or other visible celebrity.
What is behind all these Brand Ambassador investments? What’s the ROI? How much do they cost?
We are pleased to present a special guest post on the subject by Stephen Pearson, CEO of Sports Media Gaming Ltd (SMG). SMG is a leading international sports marketing agency, and has been involved in brokering a number of the recent Sports Sponsorships and Brand Ambassador partnerships with online brokers. Stephen has previously held Board roles at UEFA Champions League and English Premier League.
The online trading market is seeing a significant increase in the use of Brand Ambassador relationships, as brokers seek to create a further point of difference from their peers. This is also creating a shift from the traditional use of team and event sponsorships to give the brand a personality of its own. Deals are being done with ambassadors in all sectors from the world of film, football, motor racing, tennis, athletics, UFC fighting and even extreme sports like wing suit flying.
What is the role and cost of a Brand Ambassador, what are the benefits and possible pitfalls, how can ROI be generated from such relationships?
Let’s take a look.
What is a Brand Ambassador?
The Brand Ambassador is an individual who is contracted to endorse a company´s product and services. They are engaged to represent the type of image the company wishes to put out and should play a crucial part in the company’s marketing strategy.
Different types of ambassadors (sports stars, actors, celebrities, renowned business experts) can all play a different role depending on whether the target market is retail or business focused.
Benefits of a Brand Ambassador
Increasing the public awareness of the company is an obvious one. Enhancing business, consumer and VIP relations, facilitating prospecting for the sales people and enhancing employee motivation are but a few of the other benefits.
A broker can show that it is a class leader, forward thinking and cutting edge by selecting and activating the right ambassador relationship.
It gives the brand a personality of its own, only one trading company can endorse the likes of Usain Bolt or Cristiano Ronaldo, it’s not a relationship that can be shared around the industry.
When over 60% of broker sponsorships have been done with football teams, brand ambassador deals create strong standout from peer activity.
Avoiding Potential Pitfalls
There have been a number of hiccups with brand ambassador relationships over the years and when a brand is aligning a large marketing budget to one individual its harder to escape the damage done. Tiger Woods, Kate Moss, Michael Phelps are a few that have managed to create crisis PR issues for their sponsors over the years.
Due diligence plays a vital role to assess any potential downsides. An online broker would probably want to avoid endorsing an actor that may go on to appear in film like Wolf of Wall Street. Ensuring the contract has proper get out clauses is imperative when negotiating such endorsements.
Is a target ambassador overexposed? are you going to be dwarfed in marketing by a brand that is putting much more marketing effort behind your ambassador than you are. High profile stars often appear in adverts for several brands in the same time, this is something to check before signing contracts.
Educating the brand ambassador about your products and services is vital. If an ambassador is appearing at a media event and asked by the press why they are endorsing your company, you should ensure that the ambassador is fully equipped to answer questions on your company, products and services.
Social media is an important factor. For brands that operate entirely online it is imperative to be endorsed by someone that has a strong social media presence. It is surprising to see that many of Hollywood’s biggest names have very poor social media presence when compared to international sports stars.
With individuals, some things cannot be anticipated, the PR team need to be ready whenever a potential problem is on the horizon.
What Does a Brand Ambassador Deal Cost?
There are many variables when it comes to the cost, particularly when it comes to opting for a current “star” or a former “legend”.
The legends are normally much more cost effective once their main career has ended and often looking for these types of engagements to earn income.
The cost is also very dependent on what is required from the ambassador. Simply using existing images and asking for a short testimonial is much more cost effective than developing an extensive marketing plan around the individual where they are expecting to attend events in various locations.
Cost can be tailored according to which territories the promotion is planned. Similar to how sports teams are geo-regionalizing their sponsorships, the same can be applied to brand ambassadors. It’s possible to secure the services of a global icon but promote the person in one country or continent. This will allow the brand to negotiate a regional sponsorship fee instead of a global sponsorship fee.
Maximizing Return on Investment From Your Brand Ambassador
A great deal of exposure generated from these types of deals comes from the initial announcement, but then what?
Saying you have sponsored a global personality is one thing, making sure that you generate a return on investment comes from pre-planning and a detailed activation plan. These types of deals can see a long term minimum commitment.
Negotiating the services of the brand ambassador is critical and using the services of an experienced external agency can significantly add to the value returned.
The services of a brand ambassador generally include the following set of rights.
- Exclusivity within the brand category
- Use of the ambassador’s existing stock images
- A day with the ambassador to create new video and photo materials
- Meet and greets
- Promotion through the ambassador social media channels
The brand should seek to utilize the ambassador “through the line” in its marketing. In direct response, all banners should be modified to highlight the relationship and all stakeholders should be informed of the partnership. Keeping a continuous story going over the term of the partnership is crucial. High profile stars have a dedicated fan base and will follow anything the ambassador does.
Further ROI can be generated by negotiating additional features into the partnership.
- Presentation to the ambassador’s other sponsors for creating co-promotions
- Tickets to events in which the ambassador appears
- Wearing brand patches
- Providing signed merchandise for promotional use
- Ambassador to attend events e.g. industry expo booths
- Create unique behind the scenes footage with the ambassador exclusive to your brand
- Create “money can’t buy” experiences such as intimate events for key clients where the ambassador is invited to appear
Brands can look to an industry where there is a lot of parallels – the online sports betting market where the use of brand ambassadors has been prevalent for a long time. At most expos and affiliate conferences these days it’s commonplace to see endorsers at the booth. A recent Affiliate conference saw more than twenty brand ambassadors supporting various sports betting companies.
When online betting burst onto the scene, many companies made a land grab for team sponsorships, but gaming giant Pokerstars shunned team sponsorship from the beginning and has fully adopted a brand ambassador approach ever since. It’s been a winning strategy.
The trend for brand ambassador partnerships in the online trading industry sees no sign of abating.
We expect to see the trend continue, and before long move away from brands aligning only to single male ambassadors to creating “team” partnerships with multiple ambassadors and also with female individuals.