Christiano Ronaldo’s $1 billion Nike deal could be the future of social media marketing

Nike has signed a $1 billion lifetime pact with Real Madrid’s Cristiano Ronaldo due to the soccer player’s large reach and influence on social media channels, according to Business Insider.

In 2016, Forbes estimated Ronaldo earned $88 million in earnings, with $56 million (about 65%) coming from his salary and winnings, and the rest from endorsements. The new deal with Nike, which was finalized in December 2016, highlights the value and importance of mega influencers, and how brands can leverage these popular figures to drive customers, and ultimately increase sales. Here are a few more observations from the Nike-Ronaldo deal:

• Ronaldo’s social media presence reaches 262 million people. The platforms with the largest Ronaldo following are Facebook at 120 million, Instagram at 92 million then Twitter at 50 million. While there are likely some overlap and duplicates among the three platforms, the sheer audience size of each one provides Nike with an engaged base of loyal followers. Compare this to Snap’s 158 million daily active users, and one could argue a mega-influencer campaign can be more valuable when trying to maximize reach.
• Nike could be the real winner in this deal. Ronaldo’s following on Facebook is the world’s largest, according to Forbes. Ronaldo’s social media presence alone was estimated to have generated $474 million in media value for Nike in 2016, according to recent Hookit report. This means Nike can potentially recapture their $1 billion investment in Ronaldo in just over two years.
• Mega influencers can be lucrative investments for brands. Depending on the size of an influencer’s following, and the engagement these followers generate, mega-influencer endorsements can generate high returns on investment. This could particularly be good for brands than can tie influencers effect to an increase in product sales.
• Micro-influencers are still important, too. Advertising businesses are tapping into this emerging trend to turn to “everyday” social users into influencers overnight. Posts from people with small followings get strong engagement, and bring an air of authenticity and trust. This helps brands skirt any negative perception tied to more blatant forms of advertising. And obviously, employing micro-influencers is much cheaper — free even — than tapping a celebrity.