It all started innocently enough, with one of The Shark Daymond John’s club rooms, “Patti Stanger & Sharks on what wealthy men want in a wife.” Just your typical Tuesday night on Clubhouse. It seems nearly every day, something magical or game-changing happens on Clubhouse. Tonight, it was Daymond’s obsession with Golden Corral Buffet. What started out as a joke about date night ended up being a huge celebrity brand endorsement.
Golden Corral’s Newfound Fame on Clubhouse
For those unfamiliar with the family-style buffet, Golden Corral® restaurant opened its first restaurant in Fayetteville, North Carolina in 1973, with a brand promise of “offering guests real, wholesome foods in a family-friendly atmosphere and at a great value.” Nearly 46 years later, Golden Corral® is hailed as America’s #1 buffet and grill. A quick google image search shows why. Back to tonight’s marketing “aha” moment…Throughout the nearly 3-hour chat, Golden Corral was mentioned more than two dozen times, sparking many in the audience to google the brand, and look up the food. One moderator changed their profile picture to a mouth-watering display of the buffet. Despite gross sales of $1.53 Billion according to Wikipedia, Golden Corral is only 500 restaurants nationwide and likely isn’t in a position to offer a celebrity $25 Million for an endorsement. For the caliber of Daymond John, the amount of adoration generated, and viral memes created, that is the value they got.
The Value of Celebrity Endorsement
As a brand, being able to ride celebrity coattails to viral visibility is often a no-brainer when calculating ROI. One of the most memorable brand endorsement deals was when Nike wanted to move out of sponsoring primarily tennis and track and signed on Michael Jordan. Jordan was already iconic at the time, but the combination of Jordan and Nike resulted in the global adoption of the phrase, “Just Do It!” and spawned two subsidiaries to handle the Air Jordan brand. There is a potential downside, if you think back to “golden boy” Tiger Woods, the “titan of the tee,” who had loyal fans and billions of dollars worth of lucrative endorsement deals until rumors of infidelity instantly knocked him off his pedestal and brands fled. Despite Coronavirus slashing influencer pay 50%, it’s still a $10B industry, with $1.6B spent on Instagram campaigns alone. A quick peek at celebrity Instagram-sponsored posts shows that Beyonce earns $1M per post.
There is No Controlling the Narrative
Brands have trademark rights in order to control the narrative and brand value, but what happens when a celebrity says something unscripted? On Feb 4, Elon Musk broke the internet on Clubhouse in a meandering 2-hour campfire-side chat covering everything from colonizing Mars, to neural implants, to crypto, and posited a what if… What if Dogecoin, which originally started as an internet parody based on a viral dog meme to poke fun at ICOs which now has a near $7 Billion market cap, became the global currency? The token surged more than 50% and the world is watching.
The Opportunity for Clubhouse
With lockdowns and shelter-at-home restrictions in place for nearly a year now it’s not surprising that Neilsen reports that media usage has seen a 60% increase. Clubhouse has experienced meteoric growth in the past 2 months, growing from a few thousand users to now (February 2021) more than 6 million registered users, with the balance of the more than 10 million downloads currently on the waitlist for a coveted invite. Clubhouses’ value to brands comes from more than the speed of the user growth. The opportunity is in the “sticky factor” with many users mentioning in their reviews that they spend more than 40 hours per week on ClubHouse.The addiction to Clubhouse is understandable given the types of rooms available 24/7. From tactical lessons on marketing for blockchain to esoteric rooms on mindset and motivation, niche rooms on what it would take to colonize mars, to the vast array of entertainment rooms from professional business to the ever-popular Cotton Club, no matter the time, there are thousands of rooms to choose from. The Founders have confirmed they plan to keep the app restricted to real people and do not envision brands having accounts. However, that doesn’t mean brands can’t have clubs, host paid events, and create a presence on the app not yet even envisioned. Could we see a Red Bull room brainstorming new records to break while breaking the current record for the longest room? Or American Idol holding auditions? We’ve already seen multiple major events scouting talent on Clubhouse, what’s next? No matter the size of the room, these intimate conversations with celebrities, where the audience clings to every word, are the most authentic method of brand endorsement. Is it better when it’s unplanned like tonight’s obsession with Golden Corral or will a clever marketer be able to replicate the fun, banter, and viral worthiness of an organic conversation? We shall see…