Sponsors count on the brand equity or image of a superstar to generate more revenue for their companies. Last year, former ASU golf star Phil Mickelson earned nearly $52 million alone from endorsement deals, according to Sports Illustrated.
In May, Bloomberg Businessweek magazine ran an article on the value of sponsorships by the likes of Adidas and Nike in lieu of the FIFA World Cup. According to the article, Adidas spends about $125 million annually on sponsoring top international and domestic club soccer teams, and the company grossed roughly $1.8 billion in soccer merchandise sales during 2008.
If money spent on advertising is not taken into account, then each dollar Adidas spends on a sponsorship generates somewhere around $14 in soccer merchandise sales.
So, what does this have to do with everyone who isn’t a world-class athlete? There’s actually a market for your opinions, and it’s based on your reputation or brand equity.
Brand equity is the value of your public image. Billionaire businessman Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it.”
Everyone has a brand, and it might be worth more than you think.
Amazon.com relies on customer reviews to boost sales akin to a word-of-mouth business model. In 2009, Amazon had just under $25 billion in sales. A Bloomberg Businessweek article from early 2009 estimated that Amazon had at least 88 million customers, each accounting for about $284 in sales during 2009.
Although it may be easier to translate a customer visit to a website into revenue, the value of a college student’s reputation takes more work to quantify.
In order to get a job through a formal application process, a qualified applicant likely needs the right mix of good grades, skills that match the job description and experience from previous jobs, internships, travel abroad, student involvement and leadership.
As of 2008, according to the U.S. Department of Education, the median salary of a young adult with a bachelor’s degree amounted to $46,000, which was 28 percent more than that of a person from the same age group who held an associate’s degree.
The earning differential between the salaries of graduates with bachelor’s and associate’s degrees might come down to a number of elements, and brand image is laced in there as well.
Universities have their own brands, too. An Ivy League institution, such as Brown University, has a different marketing strategy from the University of Washington, which is a Pac-10 school. Each university has its strengths and weaknesses, which ultimately shape the perception that prospective students have of both institutions.
The University of Washington probably markets itself as a great starting point for working in Seattle and immersing students in its vibrant culture, and Brown likely pitches itself as a university with a rich tradition and close access to the major markets of Boston and New York City.
A college education can definitely improve a person’s earning potential, but a four-year degree is not the “be all, end all” by any means. A good name might really be worth millions, and a bad name can turn into a big hurdle.
Socrates once said, “The way to gain a good reputation is to endeavor to be what you desire to appear.” A picture might be worth a thousand words, but your reputation is worth at least a few thousand dollars.
Send endorsement contracts to isaiah.mccoy@asu.edu
