Endorsements have been a long time standby of the beverage alcohol industry. But in the new marketing landscape does this traditional relationship hold up? Is the value of endorsements for the beverage alcohol industry real or contrived?
The new media landscape
In the modern marketing landscape there are more channels than ever to connect with consumers. Does the rise of digital marketing mean the end of endorsements for the beverage alcohol industry? The answer is a resounding no. Quite the opposite, in fact.
Time and again it has become clear that digital and traditional marketing work best in tandem with one another. Rather than replace traditional endorsements, digital marketing is revitalizing them.
New media and traditional advertising in the Super Bowl
Super Bowl ads are perhaps the most recognized and iconic products of traditional marketing. They also provide the perfect example of how to effectively combine new and traditional media.
In addition to the massive budgets dedicated to producing ads and buying air time, some advertisers now budget between $4 and $6 million to promote their ads on social media in the lead up to the Super Bowl.
After the game, advertisers follow up with more content online and ensure that their ads will be found on search engines with the relevant search terms. Using traditional and new media in a sports context enabled 2015’s Super Bowl ads to generate as much as $10 million in revenue.
Clearly then, sports endorsements are as relevant (and more profitable) than ever in the new media landscape.
Why sports endorsements?
Sports fans are different from any other demographic. Whether they are watching in the stands or on TV, sports fans behave differently than other fans. How? They demonstrate unique attributes relating to emotional and economic attachment, identity, and loyalty.
Endorsing teams or athletes allows brands to latch onto the unique loyalty of sports fans. When a player, team or league signs a contract with a company, they are lending their identity to that brand. They are signaling loyalty from the team or player to the brand. In turn the fans develop a more lasting loyalty to the brand.
Sports endorsement are not going anywhere
In 2012 sports sponsorship was worth around 13.5 billion in North America and made up almost 70% of the sponsorship market when compared to other endorsement and sponsorship opportunities including celebrity endorsements and music festivals.
In 2015 the top 100 athletes by endorsement brought in over $917 million in endorsement earnings, an increase of almost 25% from 2014. Clearly then, sports endorsements are not only still relevant, but are also a growing source of revenue for athletes and teams, and of expenditure for advertisers. But does this mean that sports endorsements are right for the beverage alcohol industry? Some brands clearly think so.
The 7th highest earning athlete from endorsements in global sports is Novak Djokovic who has earned $31 million in total, including his deal with Jacob’s Creek Winery. Following right behind him is Rafael Nadal in 8th with a total of $28 million in 2015 – one of his top sponsors is Bacardi.
Fewer beverage alcohol endorsements for athletes
On the other hand, let’s go back to those Super Bowl ads mentioned earlier. How many athletes were in alcohol commercials during the Super Bowl? None! So what does this tell us about modern alcohol beverage endorsements?
Individual endorsements for beverage alcohol companies are not as common as they once were. Many leagues have limited the ability of players or teams to endorse alcoholic beverages. On the flip side many alcohol beverage companies are reluctant to put their brands’ fate in the hands of young athletes who may make mistakes that could compromise their brand integrity.
Between January 2012 and 2013, 51 NFL players or personnel were arrested, 40% of whom were arrested for drunk driving. On average since 2000, 28% of football players that have been arrested were arrested for drunk driving. The beverage alcohol industry has worked hard to encourage safe and responsible consumption of alcohol and tried to distance itself from the potential negative consequences of irresponsible drinking. In this light, individual athlete endorsements can be risky business.
As beverage alcohol companies move away from endorsements from athletes, they are increasingly looking to celebrities in the entertainment industry instead.
Sean “Diddy” Combs, is one of the best case studies to demonstrate the growth of this trend. The rapper has a partnership with Ciroc vodka, produced by Diageo. When the deal was first announced Ciroc sales jumped from 50,000 cases per year to almost 2 million.
Canadian Dan Aykroyd has a close relationship with Crystal Head vodka. The distinctive brand features a glass skull shaped bottle, and Dan Aykroyd is a strong advocate for the brand.
Meanwhile, Justin Timberlake regularly tweets about Sauza 901, his tequila brand, to his almost 40 million followers on Twitter – demonstrating the reach of new media when combined with celebrity endorsements.
Sports, stars and purpose built endorsements
Historically, sports provided some of the most valuable endorsement opportunities for beverage alcohol companies, but this relationship is evolving rapidly. Today, entertainers more successfully utilise their vast digital reach to endorse brands with great success. But some of the most profitable endorsements in recent times have come not from athletes or celebrities, but from fictitious characters created by advertisers.
Endorsements don’t necessarily have to come from ‘real’ people.
Old Spice reinvigorated their brand almost overnight by launching “The Man Your Man Could Smell Like” in 2010. The first of a series of ads featured a shirtless Isaiah Amir Mustafa, a former NFL practice squad receiver, as he addressed female viewers in a speedy, self-assured (and at times ridiculous) monologue promoting Old Spice. The company followed up the TV ad with an online campaign, and the original ad hit over 43.5 million views on YouTube by 2012, and over 50 million by 2015 making it one of the most popular viral campaigns in history. The campaign overall netted an initial 1.2 billion earned media impressions, a 2,700% increase in Twitter followers, “800% increase in Facebook fan interaction” and Old Spice is now the number one brand of body wash and deodorant with growth near 10 per cent.
The most interesting endorsement in the world
Dos Equis turned from an obscure Mexican brand into an overnight sensation with the endorsement of ‘The Most Interesting Man in the World’. Who was he? No one. Not until he was created in order to endorse the beer in 2006. According to the agency behind the brand, “He is a man rich in stories and experiences, much the way the audience hopes to be in the future. Rather than an embodiment of the brand, The Most Interesting Man is a voluntary brand spokesperson: he and Dos Equis share a point of view on life that it should be lived interestingly.” In Canada, thanks to the ad, sales of the beer tripled in 2008 and increased every year in the United States between 2006 and 2010 to the tune of 22 per cent – at a time when other imported beer fell by 4 per cent.
Value of endorsements for beverage alcohol companies
So, is the value of endorsements for beverage alcohol companies real? Very much so.
Sport endorsements are turning away from individual athletes while still seeking to latch onto the unique nature of sports fans.
Celebrity endorsements have been highly successful in modern times, but some of the most successful endorsements have come from fictional characters – invented to endorse a specific brand.
Regardless of who they are or what they do, new media has allowed endorsements to reach a bigger audience than ever before, whether through Twitter, Facebook, or viral campaigns.
The value of endorsements for beverage alcohol hasn’t disappeared or diminished, but it has changed.