Sports and marketing endorsements have long gone hand in hand, but the form those endorsements tend to take is increasingly shifting from traditional TV spots to sponsored Instagram posts.
Nearly a year after sports management giant Wasserman Media acquired digital shop Laundry Service to beef up its social and digital know-how for clients like Pepsi and American Express, the agencies are creating a media company that leverages 2,000 athletes-including NBA stars Anthony Davis and Russell Westbrook-and influencers to create branded content.
“Agencies and media companies are becoming the same thing in a lot of ways,” said Jason Stein, Laundry Service’s founder and CEO. “We’re trying to flip the traditional endorsement deal on its head and just have brands buying [influencers’] reach just like you would a media buy on a publication’s website.”
In the past year, Stein said Laundry Service’s business has grown 100 percent, and its staff has doubled to 170 people.
In January, Laundry Service spun out its in-house influencer arm, Cycle, into a stand-alone company that now has 30 employees. Unlike Laundry Service with its content creation roots, Cycle’s focus is on distribution.
Cycle’s network of creators crank out 50,000 pieces of content that get 3 billion views per month, and the brand’s Facebook, Twitter and Instagram pages have more than 35,000 followers.
“It becomes more diverse, and you can pair great creators with great athletes and have really amazing content on everyone’s channels,” Stein said. “It’s just as much an opportunity to build a media company with a really unique POV and voice and using our talent as people that scale efficiently.”
For example, Davis is working to create a short-form video series that’s been viewed on Facebook more than 420,000 times in the past month.
And another 15-second video created by artist Sam Larson has racked up more than 1 million views since it was uploaded on Jan. 25. (Check out the Instagram version below.)
Stein said Cycle’s business model is based on BuzzFeed and Vice, two publishers betting big on branded content as their primary revenue drivers.
“A newspaper might have 100 reporters around the world, and we have 1,000 amazing content creators around the world who make photos and videos as well as any big production,” he said. “What we know how to do from our original Laundry Service days is distribute content and target the right people.”
The push for more digital content is also part of Wasserman’s plan to move into new areas outside sports, which it’s primarily known for.
“We think it is fundamental to be able to deliver and give value in a way that the world is heading,” said Casey Wasserman, CEO of Wasserman Media Group. “If you think about what it means to be a network, it’s about reach and frequency based on authenticity. Frankly, very few people can do that better than athletes, so brands are associated with premium content.”
Take Pepsi, for example. The soda giant has been a longtime client of Wasserman’s on the sports side of its business, but was looking for opportunities to align with pop culture.
After setting up a meeting with Fox last year, Wasserman negotiated Pepsi’s product integration into Empire’s story line that followed character Jamal Lyon’s quest to land an endorsement.
“This isn’t about product placement, which we don’t think is authentic and works anymore,” Wasserman said. “We believe that the association with premium content is fundamental to our future and our brand, and we’re open to exploring new ways to do that.”
As an example of just how much Wasserman’s companies are overlapping, consider this: Laundry Service is creating social content for Pepsi about Empire.
– Pepsi™ (@pepsi) February 16, 2016
– Pepsi™ (@pepsi) March 29, 2016
“It speaks to the future of television. There is a lot of backlash to traditional TV spots right now in general-especially for nonlive, linear TV-but this is one of those shows that totally transcends that,” Stein said. “I think it’s a huge opportunity for the TV networks and programmers to monetize their most valuable assets, which is the amazing stories that they tell and making it really compelling for different audiences.”