A truck billboard promoting George Clooney and Rande Gerber’s hugely successful Casamigos … [+]
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Talent endorsement deals are nothing new. Audiences are used to seeing their favorite actors, musicians or athletes appear in advertisements to promote sodas or makeup. And appearances like this can do a lot to make a brand better known. But after a few verifications, the talent is usually not involved in the company’s growth. Now some successful personalities in the entertainment world are trying to change that.
“Our customers are really entrepreneurial. They want to build businesses, ”said Ben Enowitz, SVP for corporate development and talent ventures at Endeavor, WME’s parent company. “You want to go beyond the traditional framework of an endorsement deal and make a stock-based deal.”
Instead of appearing in a commercial for just a few seconds, the big players in film, music and sports are now trying to take over the brands they are promoting. With an equity deal, they are no longer spokespeople describing a brand they work for. They are co-founders and business partners who want to sell something that they helped build.
There are already great success stories in such ventures. George Clooney’s commitment to the Tequila brand Casamigos led the company to a lucrative billion dollar exit in 2017, and 50 Cent’s work with Vitamin Water similarly ended when Coca-Cola Company KO acquired the brand in 2007. Of course, other stars wanted to get that on for the fun.
The deals come about in a variety of ways across the industry. But Endeavor, with years of experience in the entertainment world, was uniquely located to meet demand. Endeavor Talent Ventures, managed by Enowitz, combines well-known talent with emerging brands and structures the equity agreement between the parties. The group’s successes include actress Shay Mitchell’s work with Onda Sparkling Tequila and athlete Maria Sharapova’s partnership with Therabody.
Actress Shay Mitchell is the co-founder and chief brand officer of Onda Sparkling Tequila (photo) … [+]
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The talent who signed up for these deals and made a name for themselves on film or television usually doesn’t have a background in finance or business administration. But what they have is extremely valuable for an aspiring brand: an expert understanding for presenting a message.
“A lot of our customers are essentially storytellers and really creative people,” said Enowitz. “So you think about what a brand is trying to do – it’s telling the story behind a product. This allows our customers, even if they are not from a traditional line of business, to find really creative ways to market the product. And it’s the same kind of creativity that they could bring to film, television, and music. “
Emerging brands have a hard time standing out in an increasingly saturated market. And the traditional way of getting the word out there can involve incredibly expensive marketing campaigns with little guarantee of success.
However, partnering with these storytelling experts gives brands the opportunity to scale their products to national or even international recognition. Rather than focusing its marketing efforts primarily on buying ads, the company can let the brand promote the brand on their social feeds to instantly give an unfamiliar product a previously unimaginable reach.
And by embedding the product so tightly into the talent’s personal brand, both on social media and in traditional advertising, the entire campaign deserves something that is usually very difficult to come by: authenticity. The talent knows its followers and the best way to use their influence. Rather than just attracting a popular speaker, these companies acquire a skilled strategist who knows how to speak to an audience in their own language. In fact, marketing almost feels like a friend just recommending something.
“The ones that really work – it’s not about putting your face on a can. It weaves their experience into the brand history and why this product is unique and different from anything else on the market, ”said Enowitz.
With demand growing rapidly, Endeavor is expanding its team to bring more talent into the industry … [+]
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The story of how each deal takes shape varies from case to case. In some cases, the talent has a passion area or product in mind and just needs help finding partners to build it from scratch. In other cases, a product already exists and talent is brought in to help scale. According to Enowitz, the key to complex partnerships like this one is finding the right match between the talents and the business partners they will work with.
“It’s a team question, right? These are not transactional relationships, ”said Enowitz. “You are someone you will be in business with for two to three or four to five years. The feeling that you will be working with the entrepreneur, CEO, and marketing team is really important. “
Endeavor Talent Ventures was founded last year after seeing growing demand from both talent and emerging brands for stock-based partnerships. Every time a side shows interest in a deal, Enowitz and his team analyze the market category, assess the product’s enduring strength, measure the talent’s interest, rate the team they would work with, and then call to see if that is everything is would work.
Properly measuring all of these parts of the business can get complicated. Fortunately, with a diverse background, the team is prepared for the job. In addition to Endeavor’s longstanding institutional experience in the entertainment business, the Talent Ventures Group has a mix of employees from the areas of private equity, investment banking, e-commerce and venture capital. The team knows Hollywood and the startup world well and is therefore ideally positioned to put them together.
Interest in building such partnerships continues to grow, especially during the pandemic. Since stars can no longer film or play as much on the field as before, alternative career opportunities such as these open up new opportunities. But these are of course side projects, with the terms of the partnership making it clear that talents have other obligations that they need to balance. But when set up properly, these endeavors can be as important to them as their daily work.
“It’s about really investing in a project,” said Enowitz. “They are so excited about the product or category and can see it from start to finish. It’s just a very fulfilling thing that I can imagine matched one of their first films. “
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