Celebrity Endorsements Still Push Product

Why, in the Era of Social Media, the Rewards Continue to Outweigh the Risks


by Dean Crutchfield

"Everybody lives by selling something," wrote Robert Louis Stevenson, author of "Treasure Island." Agents, CMOs and deal makers will always get starry-eyed by the big names of "celebrity" because brands love endorsements, and consumers buy into "celebrity." Questions remain, however, as to whether the international obloquy related to the Tiger Woods crisis dealt a devastating blow to celebrity endorsement. In light of the risks, is the celebrity endorsement deal still worth it?

MTV
Even C-listers like Nicole 'Snooki' Polizzi of 'Jersey Shore' can lead to little marketing triumphs. Companies know there's risk when they choose a celebrity-endorsement approach. Many have learned the hard way that it becomes a reflection of themselves; just ask Coca-Cola, with its speedy capitulation of its Michael Vick sponsorship. If you put a face to a name, the more likely you'll remember it, and marketers know the same goes with hitching celebrities to their brands.
Recent studies of hundreds of endorsements have indicated that sales for some brands increased up to 20% upon commencing an endorsement deal. According to Anita Elberse, associate professor at Harvard Business School, some companies have seen their stock increase by .25% on the day the deal was announced.

There is the issue of overexposure to consider. We receive more than 3,000 commercial images a day; our subconscious absorbs more than 150 images and roughly 30 reach our conscious mind. Therefore, practice has it that if you use a celebrity-endorsement strategy, you dramatically accelerate the potential for your brand to reach the conscious mind of the consumer, especially given research from Weber Shandwick that finds peer endorsement trumps advertising.

So if word-of-mouth is the No. 1 purchase decision-maker, why are some CMOs displaying recalcitrance toward big names that can create so much brand buzz and peer recommendation? Are we witnessing the decline and fall of "celebrity"? It's true that not every brand needs a celebrity -- it has to be relevant to the brand and the consumer. More important, if there were a face for every brand out there, it would be a calamity.
On the upside, celebrity endorsement has the power to instigate and inspire, enlighten and enrage, entertain and edify the consumer. Its inherent benefits are that it can be leveraged across multiple channel experiences (and potentially services), cuts through advertising clutter, creates a brand narrative and allows for channel-specific optimization. Ultimately, celebrity endorsement is always worth investing in if you have the right person. It's an expensive but easy option for companies, but it should be treated like a marriage with added creature comforts that make the partnership invaluable:
The opportunity to create new markets and/or tap into an activation base of fans. Such was the strategy behind Patrick Dempsey's Unscripted men's perfume for Avon.
The ability to spark sales by enticing consumers to learn more about the brand. LeBron James is one of the top three paid athletes in the world and generates a brand halo.

The means to promote a unique, relevant and sustainable brand attribute that might be hard to attain otherwise. Nike's rapid success in the golf category was chiefly because golfers wanted to lay claim to the number-one golfer in the world.

The option to build reciprocity into the partnership by supporting the celebrity endorser's brand. Lady Gaga knows how to sell, and business publications praise her business smarts as she masters social media and expands her brand beyond music.
The grounds for innovating the product/service offering. Rihanna's "Umbrella" song hit big at the Grammys, and her designs for Totes' umbrellas hit big at the retailer.

The challenge to a preconceived notion. Givenchy used Justin Timberlake's endorsement for the women's perfume Play for Her.

The collaboration that can impact the business model of the partnership. A noteworthy example is Sean Combs taking a 50/50 ownership in Diageo's ailing grape vodka, Ciroc.

All are sound criteria for a celebrity endorsement strategy, but the split over the Tiger Woods affair conflicts with an otherwise inviolable marketing convention: using celebrities to market the offer instead of featuring the product or service's value for consumers and the value that underpins their manufacture.

And what about the role and risks of social media? Celebrity endorsement is often stymied by constraints and contractual limitations; does leveraging social media represent the next evolution for celebrity endorsement and brand advocacy? 95% of social-media users believe a company should have a presence in social media, which can get the brand into the conversation because social media enables consumers to adopt new behaviors.

And CMOs need to incorporate these new behaviors into celebrity-endorsement strategies because social networks make up marketing's most powerful media: recommendation. Though fraught with danger, social media's potential for making celebrity endorsement a multi-platform juggernaut rests not with what happens inside it, but what it makes occur outside of it.

Horror and probes over the last 18 months demonstrate that celebrity-endorsement strategies are a scary, inherently unstable but essential marketing activity, as brand share is too strong an incentive to keep celebrity endorsement down. An estimated $50 billion is invested globally on corporate sponsorships and endorsements. While a majority of that is spent on sports marketing, "celebrity" plays a dynamic role.

However, the machinations over value and values are the debate of the industry. The bottom line: The more problematic high-profile celebrity endorsers, the better bargaining power for CMOs.

CMOs understand the value of owning celebrity endorsement and using it to bolster the customer relationship. CMOs know that few brand-building strategies can deliver on the bottom line as much as celebrities, simply because the product will sell better. Newer forces are also fortuitously propping up the celebrity endorsement boom with B-, C- and reality-TV-listers constantly seeking new ways to blur the lines between commercial and entertainment worlds. Even C-listers like Nicole "Snooki" Polizzi of "Jersey Shore" can lead to little marketing triumphs.

U.S. celebrities show up in more than 15% of advertisements, according to Millward Brown, and the number is far higher in markets such as India (24%) and Taiwan (45%). So before we shoot a golf ball through celebrity endorsements, let's recognize that they've never gone out of vogue nor will they, because the rewards of relying on an endorser can far outweigh the risks.

What we search for in celebrities is not so far from what we search for in our friends. The secret is to never trust an animal no matter how many legs it has.

ABOUT THE AUTHOR
Dean Crutchfield is chief engagement officer at Method, a brand experience agency with offices in New York, San Francisco and London.