Abbey D'Agostino signs with New Balance

Amerikano wrote:

DaveW doesn't have it more wrong.

His rationale for creating value first starts with creating the product or selling the product. The only problem with looking at the direct influences of either design, manufacturing, "labor", or selling is that it ignores what a great marketing budget does, which is create demand/awareness of a product.

The best isolated example would be Skechers because it took risk on one specific athlete, Meb. The brand is expecting sales to be 120MM + this year in the GoRun line. With that being said, could you imagine that figure being close tp that high without Meb?

Meb didn't do any "labor", but he generates more opportunities for a brand to present itself to an audience. His amounts of mentions in media will directly correlate with the amount of demand Skechers will receive for their line.

Justification of athletes compensation depends on how you want to be perceived in a market. Sure, a brand can only focus on direct sales and R&D, but less people will know who you are. This is why Hoka is investing in Leo. They need brand awareness to increase.

As for Abbey D. I would say she's as valuable as a young Jenny Simpson, and has as much potential. A brand is willing to pay her a premium to have her.

Charity Pay wrote:

DaveW wrote:

She is attractive, but she will not have a career as a model, so I don't think that is high on her resume or list of life's objectives.

She went to an Ivy, but for now has chosen a career as a runner so I don't know why an Ivy education is relevant to her career at this moment.

Since she has chosen a career in running and it is unlikely that there will be an Air-Abby shoe anytime soon and perhaps only about 10000 people will ever know her name, I think a $40,000 salary is generous and there is no reason that she should make more than other college graduates who are tasked to produce a product for a company in order to make a profit.

A runner does not produce anything, not a new product, not a new idea not even labor that goes into producing a product. A runner's value is simply if they entertain and motivate the public so that their sponsor sells more shoes or swim wear. If they don't understand that then perhaps they need another line of work.

NB does about $2.7 billion in sales a year. Having a gaggle of athletes wearing their kit at running events around the world gives a presence , awareness and credibility at the elite levels and a finite audience. Does this actually translate into sales, its debatable. Does it give back to the sport ,absolutely , does it create better products , maybe in the area of track a field/road racing. The investment spend on t&f shoes is not justified by the sales , low margin small numbers products. Training shoes as we know them are made/developed for the masses , plain and simple. Traceable sales can be seen in basketball product like Kobe , like Jordan linking an athlete to a singular product sale. The only place we have seen this in running is with Bolt @ Puma and Meb @ Skechers , seeing a direct connection with other running athletes is a stretch. Major marketing dollars were spent in both cases backed by major current accomplishments by athletes with unique stories/personalities.

Bottom line , its a nice thing the shoe companies do sponsoring athletes and giving them shot at their athletic dreams and aspirations. They won't get rich , they will maybe capture the moment and realize the few years they compete is special and enjoy the people and experiences along the way.

MARKETING 201 wrote:

Charity Pay wrote:

NB does about $2.7 billion in sales a year. Having a gaggle of athletes wearing their kit at running events around the world gives a presence , awareness and credibility at the elite levels and a finite audience. Does this actually translate into sales, its debatable. Does it give back to the sport ,absolutely , does it create better products , maybe in the area of track a field/road racing. The investment spend on t&f shoes is not justified by the sales , low margin small numbers products. Training shoes as we know them are made/developed for the masses , plain and simple. Traceable sales can be seen in basketball product like Kobe , like Jordan linking an athlete to a singular product sale. The only place we have seen this in running is with Bolt @ Puma and Meb @ Skechers , seeing a direct connection with other running athletes is a stretch. Major marketing dollars were spent in both cases backed by major current accomplishments by athletes with unique stories/personalities.

Bottom line , its a nice thing the shoe companies do sponsoring athletes and giving them shot at their athletic dreams and aspirations. They won't get rich , they will maybe capture the moment and realize the few years they compete is special and enjoy the people and experiences along the way.

Does every ad you see on your computer generate revenue, no? Do companies pay millions $ in aggregate for these ads, yes. Sponsoring elite runners is a marketing expense. Like all all marketing expenses it has an ROI. Is that ROI as high as other marketing ROIs? Who knows. Given how little is spent on sponsoring athletes, especially for NB, the marginal return is probably quite high.

Furthermore the key metric for marketing expenses is "Share of Voice". It's not the absolute value that matters but that value relative to your competitors. If Nike chose to spend zero dollars on sponsoring pro athletes they'd eventually lose significant sales to their competitors. This isn't a fact, but is pretty much a fundamental force in marketing science.

Charity Pay wrote:

MARKETING 201 wrote:

Does every ad you see on your computer generate revenue, no? Do companies pay millions $ in aggregate for these ads, yes. Sponsoring elite runners is a marketing expense. Like all all marketing expenses it has an ROI. Is that ROI as high as other marketing ROIs? Who knows. Given how little is spent on sponsoring athletes, especially for NB, the marginal return is probably quite high.

Furthermore the key metric for marketing expenses is "Share of Voice". It's not the absolute value that matters but that value relative to your competitors. If Nike chose to spend zero dollars on sponsoring pro athletes they'd eventually lose significant sales to their competitors. This isn't a fact, but is pretty much a fundamental force in marketing science.

Written by a true marketing person trying to justify a marketing expense or budget. The unfortunate part of your argument is that all the marketing terms , "Share of BS" , ROI are just that marketing terms , the true value metric is shoes sold in this case. The nonsense you are trying to justify is classic marketing vomit.The average runner that walks in the average running store could care less what athlete runs in what shoe and could not tie an athlete to the brand. Ask the question to an average group of runners , who won the New York Marathon last year , who is the USA 10k champ , mens or women's , how about 5k or the popular 1500 meter champ ? Blank stare or wild guess ? Or lets simplify it, what brand won those events ? If Nike chose to drop Jordan or Kobe , yes you would see a loss of sales , if they chose to drop Rupp or Mo or USATF I don't think the running category would collapse.