Humanity generates as much data every two weeks as was generated from the dawn of civilization to 2003, according to Google’s Eric Schmidt. Whether his estimate is exact or as some argue exaggerated, we do know that two weeks will fall to two minutes then two seconds as use of data begets more data.
Understandably, companies have had an increasingly hard time getting past all this noise. In response, marketers initially shifted advertising dollars from traditional media (TV, print and radio) to digital advertising’s banner ads and more recently to Facebook’s, Twitter’s and Google’s personalized ads, many of them location dependent.
But “smarter” marketing – as personalization is called – isn’t the solution according to Mark Fidelman, Fortune columnist, author of Socialized! and CEO of marketing consultancy Evolve! In his view, we increasingly tune out to digital ads just as we learned to do with TV ads. Friends and experts now drive choice far more than digital advertising. And while Facebook is capturing the friends, Fidelman’s new start-up RaynForest hopes to capture the experts.
Expert endorsements work. Oprah Winfrey’s endorsement of close to seventy books during her tenure as TV diva generated over fifty-five million book sales. TV news satire comic Stephen Colbert refers to the “Colbert Bump.” And let’s now forget Michael Jordan, whose endorsement of Nike shoes changed sports marketing, produced $1.25 billion in wholesale trade in 2012 along with $60 million for the basketball star.
Unfortunately, only a few companies can afford such high-profile endorsers, and star power is required to secure the agent contracts that land lucrative endorsement opportunities for the endorsers. Fidelman’s idea for RaynForest emerged from his belief that effective endorsement deals with niche influencers is a largely untapped market.
What are some examples of niche influencers? Kansas City Royals’ infielder Billy Butler loves barbeque sauce. Zarda Foods made him the centerpiece of its Rally Sauce, an endorsement that was very inexpensive and generated thousands of referrals and purchases, building a national brand. To kick off the new Dallas TV show, producers asked one hundred fanatical Dallas fans to “live like a Ewing” for a week in a Dallas mansion. Postings and publicity from the experience generated $400,000 (and counting) in earned media value.
Fidelman says that YouTube, Facebook and Twitter are full of people with high social followings whose endorsements are largely untapped. The best influencers are those who will believe in your offering and spread, through their tweets and postings, content and ideas to their fans that reference your organization, offerings or cause. “Their recommendations are more effective that traditional advertising because people trust influencers far more than they do machine-generated ads. Even if we know the influencer is being paid, people will trust that influencer’s recommendation over any other form of advertisement,” Fidelman told me.
To capitalize on this untapped potential, RaynForest will offer an on-line marketplace to enable endorsers and those needing their endorsement to find one another, negotiate a deal and keep track of the return on the endorsement contract. “Think of RaynForest as a digital agent. By lowering the cost of finding and managing endorsements, we will grow the market for mid- and long-tail (i.e., not mass market) endorsers.”
RaynForest is following the lead of many business model disruptors who find a lower-cost way of delivering a high-end product or service to a broader market. Restoration Hardware and Pottery Barn did this to interior designers, just as LinkedIn disrupted headhunters.
Will endorsements lose their value as more people monetize their influence? I for one stopped paying attention to LinkedIn endorsements after people I did not even know were endorsing me. According to Fidelman, as long as the endorser stays true to his own area of interest, the endorsements will retain value. “Brad Pitt’s endorsement of Chanel cologne was a fiasco for the actor and brand as there was no authenticity behind his endorsement. Cowboy hats, leather jackets, out-of-the-way travel destinations and social causes, yes. Chanel? No way,” Fidelman shared.
Fidelman’s creates a compelling case for endorsement marketing. How are you adding it to your organization’s marketing mix?