Question: Hi Braden – How do you evaluate an endorsement deal? For example, if you wanted to hire a chef to create recipes and be a spokesperson for your food company?
Eric T., Vancouver, BC
Answer: Thanks for your question, Eric. Endorsement deals seem so daunting and secretive but they can be a great “reason-to-believe” for brands. We’ve had our share of endorsement deals, so here are a few thoughts that may help.
The price to pay for an endorsement always comes down to two elements:
1. How are you going to leverage the likeness of the “celebrity,” and what’s required of them?
a. For example, we shot a 12-video series with Ned Bell for endive.ca. We had him for a photo shoot and used his likeness on brochures, the website, and packaging. He did 2 PR event appearances, and we also used a few of his recipes in a brochure. It was about 4–5 days of his time over 3 months. Our contract with him stated that if he entered into an endorsement deal with another company, we would be allowed to finish the run of the printed materials and website.
b. For this type of arrangement, we usually place a $ figure on their time: 40 hours x $150/hr = $6,000. (For confidentiality, I didn’t use the exact figure that was paid, but this gives you an idea.)
c. Ned Bell was also using us to get his name out in the market and start to build his “endorsement portfolio.” There should be a premium for “exclusivity within a category,” but within a small geography and category, the price will be small (maybe $2,000).
2. Does the “celebrity” bring instant credibility and audience to your brand that will help drive sales?
a. For example, when I worked at Frito Lay and our team created packaging for the World Cup of Hockey (remember that?), we signed Martin Brodeur and Ryan Smyth to appear on in-store point-of-sale material and packaging.
b. The objective was that fans of these players (this is why athletes have Twitter accounts—to increase their endorsement value) or hockey fans in general would choose to buy our chips because of our association with the celebrities. It also helps to create a “coolness” factor or bond with the audience that increases brand loyalty (in theory). I forget the exact figures, but it was about $12K–$15K for Martin and $8K–$12K for Ryan, and they needed to do nothing as we just used images they already had. Actually, we had to superimpose Ryan’s head on another hockey player because the photos they supplied didn’t quite work on pack.
c. We also signed the first product endorsement deal in 2011 with the Running Room and founder John Stanton for Silver Hills Bakery. We paid a lot, but the Running Room promoted us to their 500,000+ running community through their 140 locations across Canada; ran full-page print ads in their magazine (200,000 readership); and gave us event sponsorship, clinic sponsorship, and website sponsorship. Not only did we align with a credible brand that fit our target audience, but they also actively promoted us to their followers/fans. We also wanted to grow the Silver Hills brand in Ontario and we felt the Running Room was a good fit as they are strong in the Ontario market and could help give us credibility in that region.
We’re seeing a lot of chefs align themselves with food companies. Every tradeshow we go to has chefs cooking things and being a part of it… which means it’s going to lose its luster soon and agencies will turn to something else (clowns in 2013?). Endorsements need to fit the industry—and remember, they will have a shelf life (I still feel Frito Lay used Mark Messier for far too long). How many times do you go and check out a greenhouse website for recipes? Not often, and I bet greenhouse companies with celebrity chefs have low web traffic. Big endorsement deals don’t usually translate to selling produce… unless it’s Paul Newman.
Posted on 05 31, 2012 by Braden