Wednesday, November 12, 2008

Celebrity Endorsements: Do They Work?

Last week, USA Today published an article
calling out favorite brands of the Obama family. In the write-up, Bruce Horovitz stated if the president-elect were to advertise the favorite brands of his family(Hart Schaffner Marx, J. Crew, Planters, Fran’s Chocolates, Honest Tea, Nicorette and Ford), these companies would most likely receive an increase in exposure and/or sales. One example he mentioned involved Michelle Obama. "During a Tonight Show with Jay Leno appearance, she [Michelle] wore — and talked about — a $330 outfit she had bought online. Shoppers snapped the look up. 'All the items were gone the next day,' says Jenna Lyons, creative chief at J. Crew." When reading this, I was brought back to an often discussed marketing/advertising question: Do celebrity endorsements really work? And even if they do, are paid celebrity endorsements a good business investment (i.e. is the ROI worth the (most times) extremely high premium)?

In early 2007, innovations report wrote about research conducted by the University of Bath (UK) and University of St. Gallen (Switzerland) on this exact topic. The article noted that research results questioned the effectiveness of using celebrities to sell products since it was discovered “...that many people were more convinced by an endorsement from a fictional fellow student… because many people feel a need to keep up with the Jones’s when they buy.” Furthermore they found that people “ to make sure their product is fashionable and trendy among people who resemble them, rather than approved by celebrities...So they are more influenced by an endorsement from an ordinary person like them.” Besides this study, Brand Republic reported that some celebrities plugging products may actually turn off the consumer. In an article published in November of last year, survey results revealed “...that one in five mothers said the sight of Victoria and David Beckham plugging something in an ad would be more likely to put them off. Only 16 per cent were prepared to admit that celebrity endorsement would persuade them to buy a product.” Based on these reports, would you spend millions of dollars on a celebrity to advertise your products?

Besides the obviously monetary investment, when companies use celebrities in their ads they also take on the risk of damaging their brand/company/product image. For example:
  • Overexposure: If a celebrity is representing too many products or is in too many ads, that person may lose their credibility and/or lose their "turning heads" factor. Also, we may end up tying our brand/product to something we didn't particularly want to be associated. One case of celebrity endorsement over-exposure I can think of off the top of my head is Tiger Woods. Over the past few years he has represented General Motors, Titleist, General Mills, American Express, Accenture, Nike, Tag Heuer, Gatorade and Gillette. I know Tiger is popular, but honestly, do you really listen to him in an advertisement anymore since he's in so many of them?
  • Credibility: If your product is not something the celeb representing you would realistically use, then a partnership is probably not the best idea. Keeping with the Tiger Woods theme, a consumer could totally see him using Nike and Titleist products, what what exactly does he have to do with management consulting (Accenture)? Some other examples of bad celeb-product matches? Do you think Jessica Simpson would be caught dead eating greasy pizza in public or could you honestly see Fran Drescher shopping at Gap's lower-end chain? Probably not so much.
  • Reputation: We try to control our brand's image, but the fact is, even when a celebrity agrees to our contract terms, we can’t really control what they say or do, and a mis-step could lead to years of damage to our brand(s). For example, many companies could not have predicted the negative publicity Michael Vick would bring upon himself. reported: "Just one day after Atlanta Falcons quarterback Michael Vick pleaded not guilty to federal dogfighting charges, companies began distancing themselves from the controversy. Nike suspended its contract with him, Reebok stopped selling Vick jerseys and trading card companies Donruss and Upper Deck removed Vick's card from the rest of their 2007 card pack releases. The NFL also pulled all Vick jerseys, autographed items and other memorabilia from its NFL Shop site."
  • Consistent Brand Image: When we put our products out into the market place, it's important we present a consistent image to the consumer. It brings trust and recognition to our brand. However, continually swapping celebrities is one way we can take away that consistent image. One brand I can think of who constantly changes their celebrity image is the Gap. Since the late '80's, Gap has relied on the use of celebrities in their ads with a laundry list of probably 40+ including the likes of Sarah Jessica Parker, Joss Stone, Lindsay Lohan, John Mayer, Mekhi Phifer, Claudia Schiffer, Sarah Silverman, Liv and Steven Tyler, Michael Vartan, Madonna and Brittany Murphy. In August, Marketing Daily quoted marketing consultancy Brand Keys' president Robert Passikoff as saying the Gap has a "sustained problem with brand identity that isn't solved by using stars in ads."

Over the past couple of years it appears more and more companies are realizing consumers may not buy something just because a celebrity face is linked it. Brand Republic commented: “In 2001, 17 per cent of TV ads the company was testing featured a celebrity. Last year, that fell to 8 per cent, and this year it's at 6 per cent." reported on Pepsi dropping celebs from their ads stating the company “...said the celebrities were too big and the Pepsi brand didn't get the promotion out of the ad campaign that the stars were getting." On a similar note, Chrysler dumped Celine Dion after signing a 3-year, $14 million dollar deal with her. "Insiders at Chrysler say the commercials featuring Dion driving a Pacifica produced great sales...for the singer, not the car.”


Sarah D. said...

I guess my posting was kind of timely...On December 1, Ad Age posted an article entitled "Tiger Woods' Agent: No More Car Sponsors for Tiger." One of the key points to the article was the following statement: "Surprisingly, it might be a smart move for GM to part with the greatest sports endorser of all time, considering that even the star power of a player with 65 PGA Tour events and 14 major-championship wins to his credit was not able to save the beleaguered Buick brand." Enough said.

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