ASX-listed Sydney tech startup MSM Corporation International has signed US pop superstar Usher as its new creative director and brand ambassador, with the singer-songwriter also set to be a brand ambassador, judge and mentor for the startup’s Megastar Millionaire competition.
News of the partnership comes on the same day the company announced a $10.5 million capital raise ahead of its global launch. The raise was led by CPS Capital Group and Cadmon Advisory, with the funds allocated towards marketing, production and judges for the Megastar competition.
Megastar Millionaire is a software platform for online talent contestants that connects performers with fans through a gamified, interactive experience.
After completing a backdoor listing on the Australian Securities Exchange in 2015 and raising $5 million last year to expand the platform into Asia, MSM has recently launched its mobile-only talent discovery competition in the UK, South Africa, New Zealand and Canada. Launches are also set for the US and Australia next month, according to the company.
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The partnership will see Usher lending his judging and mentoring skills to performers in all the categories of the Megastar Millionaire competition, which offers the winners a top prize of $US1 million ($1.27 million) and a role in a film produced by John Baldecchi, as well as a variety of cash prizes.
MSM said in a statement that Usher’s involvement with the competition is for an initial term that will end 60 days after the finale of the 2017 Megastar competition, and the singer will receive cash payments, performance rights and royalties as part of the deal.
Dion Sullivan, co-founder of MSM and managing director of the Megastar Millionaire platform, said the company is “absolutely delighted to have Usher invested in both the product and the outcome of Megastar”.
“His career spans 24 years already and he has inspired so many artists. He has so much experience, training and industry knowledge to impart on our performers and his insights are invaluable to singers, dancers and performers in general.”
Making brand ambassadors work for you
With a social media presence of more than 68 million followers across Facebook, Twitter, Instagram and Youtube, and eight Grammy awards under his belt, there’s no doubt Usher carries some significant heft as a social influencer.
And while many startups may not be able to score someone with his profile, the strategy of using a brand influencer can still be worthwhile.
Jessica Humphreys, director at Melbourne communications firm Social Concepts, says brand influencers can offer companies a key source of “organic and valuable exposure” in comparison to a traditional print advertising campaigns.
But while brand influencers may offer a startup valuable exposure, Humphrey’s warns founders to “take time to do your due diligence” and research whether an influencer’s values align with the values of their startup.
She says startups should be “taking the time to research them so they understand who that influencer is: some are managed by an agent, so take time to do your due diligence.”
Humphreys also warns against equating having a large follower base with having influence, noting that brand ambassadors should have an engaged community of followers who would be “interested in the alignment” between the chosen influencer and the startup’s product.
“With influencers, the key word is ‘influence’ — smaller brands often work with individuals with a large following, but that doesn’t mean they have influence” Humphreys says.
Before signing on a brand ambassador or influencer, Humphreys advises startups should measure the engagement potential of an influencer against the number of followers they have, considering closely the ratio of people actively engaging with their content.
Once a startup has done its due diligence and identified a potential influencer, Humphreys suggests to “speak their language” and approach the influencer through the platform they are most active on — be that through an Instagram DM or a Twitter message, rather than a traditional email.
Navigating the risks
While Usher’s popularity has led him to amass 68 million followers, it has also thrown the singer in the midst of a recent scandal involving claims he had paid $US1.1 million ($1.38 million) to an unnamed celebrity stylist after allegedly giving her a sexually transmitted disease in 2012, news.com.au reports.
Negative press is one of the potential risks of working with brand influencers, however this can be mitigated with the proper preparation in place, according to Humphreys.
“Look for someone who has brand values that align with yours: it’s important to negotiate that in an agreement, since it’s a transactional paid opportunity. Like any other contractual agreement you want to make sure there are guidelines,” she says.
She also advises startups to have a specific exit clause in case the influencer “compromises the values of the business” to ensure a swift end to a partnership if needed.
So what can startups do if the worst happens, and their brand influencer goes completely off plot? Humphreys says in situations like these “speed is everything”.
She notes that even the smallest startups should still “have a crisis plan that addresses any potential issues that may arise”.
“Make sure you’ve got a person assigned to jump in and communicate [to your customers] as soon as something goes wrong,” she says.
“Speed is pivotal.”