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Marketing Management Marketing Management BSc Business AdministrationBSc Business Administration

Royal Holloway Royal Holloway University of LondonUniversity of London

Communications

Celebrity Endorsements

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David Beckham, Tiger Woods, Lewis Hamilton David Beckham, Tiger Woods, Lewis Hamilton and numerous other well known sports and numerous other well known sports personalities have had a huge impact on personalities have had a huge impact on advertising and endorsements. Explain the advertising and endorsements. Explain the positive and negative consequences of usingpositive and negative consequences of usingcelebrity figures to promote a company’s celebrity figures to promote a company’s products or services. Make use of the recent products or services. Make use of the recent events Tiger Woods went through in 2010. events Tiger Woods went through in 2010. What impact does the use of celebrity What impact does the use of celebrity endorsers have on average person? Any endorsers have on average person? Any ethical dilemma thisethical dilemma thiseffect may raise? 2010effect may raise? 2010

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Endorsements Endorsements The message’s impact on the target The message’s impact on the target

audience is effected by how the audience audience is effected by how the audience views the communicator.views the communicator.

The credibility and attractiveness of the The credibility and attractiveness of the message source – the company, brand message source – the company, brand name, the spokesperson for the brand, name, the spokesperson for the brand, actor in the ad who endorses the product.actor in the ad who endorses the product.

Marketers use celebrity endorsers – top Marketers use celebrity endorsers – top athletes, well known film stars, fashion athletes, well known film stars, fashion models and even cartoon characters to models and even cartoon characters to deliver their brand messages.deliver their brand messages.

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Credibility of EndorserCredibility of Endorser In celebrity endorsement ad the credibility of the In celebrity endorsement ad the credibility of the

spokesperson is crucial and it depends on spokesperson is crucial and it depends on Expertise Expertise

specialised knowledge the communicator possesses to back specialised knowledge the communicator possesses to back the claim. Sun Silk – uses formulation endorsed by hair the claim. Sun Silk – uses formulation endorsed by hair experts.experts.

Trustworthiness Trustworthiness how objective and honest is source perceived to be. People how objective and honest is source perceived to be. People

who are not paid to endorse a product is viewed as more who are not paid to endorse a product is viewed as more trustworthy than people who are paid.trustworthy than people who are paid.

Sensodyne Toothpaste has promoted the product in dental Sensodyne Toothpaste has promoted the product in dental surgeries and used endorsements by dentists. surgeries and used endorsements by dentists.

Likeability Likeability source attractiveness. Qualities like personalities, source attractiveness. Qualities like personalities,

appearance, humour and presence make a source more appearance, humour and presence make a source more likeable.likeable.

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Compatibility of celebrity Compatibility of celebrity with brandwith brand

A celebrity is used to impart credibility and aspirational values to a brand, but A celebrity is used to impart credibility and aspirational values to a brand, but the celebrity needs to match the product. the celebrity needs to match the product.

A good brand campaign idea and an intrinsic link between the celebrity and the A good brand campaign idea and an intrinsic link between the celebrity and the message are musts for a successful campaign. message are musts for a successful campaign.

Certain parameters that postulate compatibility between the celebrity and Certain parameters that postulate compatibility between the celebrity and brand image are:brand image are:

Celebrity’s fit with the brand image.Celebrity’s fit with the brand image. Celebrity—Target audience match Celebrity—Target audience match Celebrity associated values.Celebrity associated values. Costs of acquiring the celebrity. Costs of acquiring the celebrity. Celebrity controversy risk.Celebrity controversy risk. Celebrity popularity.Celebrity popularity. Celebrity availability. Celebrity availability. Celebrity physical attractiveness. Celebrity physical attractiveness. Celebrity credibility. Celebrity credibility. Celebrity prior endorsements.Celebrity prior endorsements. Whether celebrity is a brand user.Whether celebrity is a brand user. Celebrity profession.Celebrity profession.

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Personification of product Personification of product attributesattributes

Celebrities are likely to be effective when Celebrities are likely to be effective when they personify a key product attribute.they personify a key product attribute. Catherine Deneuve’s beauty did this for Chanel Catherine Deneuve’s beauty did this for Chanel

No. 5 perfume No. 5 perfume Paul Hogan’s Aussie ruggedness did this for the Paul Hogan’s Aussie ruggedness did this for the

Subaru Outback wagon.Subaru Outback wagon. Using James Garner and Cybill Shepherd to sell Using James Garner and Cybill Shepherd to sell

Beef backfired. Garner had quintuple bypass Beef backfired. Garner had quintuple bypass surgery and Shepherd proclaimed she was a surgery and Shepherd proclaimed she was a vegetarian.vegetarian.

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Advantages of celebrity Advantages of celebrity endorsementsendorsements

Across product and service categories more and more brands are banking on the mass appealAcross product and service categories more and more brands are banking on the mass appealOf celebrities. As soon as a new face ascends the popularity charts, advertisers queue up to Of celebrities. As soon as a new face ascends the popularity charts, advertisers queue up to have it splashed all over. e.g. the sudden rise of Sania Mirza and Irfan Pathan in endorsements have it splashed all over. e.g. the sudden rise of Sania Mirza and Irfan Pathan in endorsements in a matter of a few months.in a matter of a few months. Establishment of CredibilityEstablishment of Credibility: :

fosters a sense of trust for that brand among the target audiencefosters a sense of trust for that brand among the target audience especially true in case of new productsespecially true in case of new products e.g. Shah Rukh-Santro campaign. At launch, Shah Rukh Khan endorsed Santro and this e.g. Shah Rukh-Santro campaign. At launch, Shah Rukh Khan endorsed Santro and this

ensured that brand awareness was created in a market, which did not even know the ensured that brand awareness was created in a market, which did not even know the brand. brand.

Ensured AttentionEnsured Attention: : ensures attention of the target group by breaking advertisement clutter, makes the ensures attention of the target group by breaking advertisement clutter, makes the

ad more noticeable & accelerates the fame of the campaign and impactad more noticeable & accelerates the fame of the campaign and impact Higher degree of RecallHigher degree of Recall: :

People tend to commensurate the personalities of the celebrity with the brand thereby People tend to commensurate the personalities of the celebrity with the brand thereby increasing the recall value. increasing the recall value.

Golf champion Tiger Woods has endorsed American Express, Rolex, and Nike. Actress Golf champion Tiger Woods has endorsed American Express, Rolex, and Nike. Actress Catherine Zeta-Jones is used by T-Mobile and Elizabeth Arden. 007 Pierce Brosnan Catherine Zeta-Jones is used by T-Mobile and Elizabeth Arden. 007 Pierce Brosnan promotes Omega, BMW, and Noreico.promotes Omega, BMW, and Noreico.

Associative BenefitAssociative Benefit Most effective Most effective in developing user associationsin developing user associations gives out persuasive message – as celebrity is benefiting from the brand, consumer gives out persuasive message – as celebrity is benefiting from the brand, consumer

will also benefit.will also benefit.

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PR coveragePR coverage Managers perceive celebrities as topical, which create high PR coverage. Managers perceive celebrities as topical, which create high PR coverage. E.g. integrated celebrity campaigns - World’s leading pop groups, the Spice Girls, who E.g. integrated celebrity campaigns - World’s leading pop groups, the Spice Girls, who

appeared in Pepsi ads but also in product launch & PR events. appeared in Pepsi ads but also in product launch & PR events. Most celebrity-company marriages are covered by most media Most celebrity-company marriages are covered by most media

Mitigating a tarnished imageMitigating a tarnished image: : Cadbury India wanted to restore the consumer's confidence in its chocolate brands Cadbury India wanted to restore the consumer's confidence in its chocolate brands

following the high-pitch worms controversy; so the company appointed Amitabh Bachchan following the high-pitch worms controversy; so the company appointed Amitabh Bachchan for the job. for the job.

When controversial pesticide of Coca-Cola and PepsiCo resulted in much negative press, as When controversial pesticide of Coca-Cola and PepsiCo resulted in much negative press, as a high-profile damage control used ad films featuring most expensive celebrities. Aamir a high-profile damage control used ad films featuring most expensive celebrities. Aamir Khan led the Coke fight back while PepsiCo brought Shah Rukh Khan & Sachin Tendulkar Khan led the Coke fight back while PepsiCo brought Shah Rukh Khan & Sachin Tendulkar together which drew references to the `safety' of the product indirectly.together which drew references to the `safety' of the product indirectly.

Rejuvenating a stagnant brandRejuvenating a stagnant brand: : Celebrity defines and refresh the brand image infusing fresh life into the stagnant products Celebrity defines and refresh the brand image infusing fresh life into the stagnant products

and staying ahead of competition and staying ahead of competition e.g. post Bachchan, Parker's sales have increased by about 30 per cent. .e.g. post Bachchan, Parker's sales have increased by about 30 per cent. .

Psychographic ConnectPsychographic Connect: : advertisers use stars to capitalise on feelings to sway the fans towards their brand.advertisers use stars to capitalise on feelings to sway the fans towards their brand.

Demographic ConnectDemographic Connect: : Different stars appeal differently to various demographic segments (age, gender, class, Different stars appeal differently to various demographic segments (age, gender, class,

geography etc.). geography etc.). Mass AppealMass Appeal: :

Some stars have a universal appeal and prove to be a good bet to generate interest Some stars have a universal appeal and prove to be a good bet to generate interest among the masses.among the masses.

Can sometimes compensate for lack of innovative ideas.Can sometimes compensate for lack of innovative ideas.

Advantages of celebrity Advantages of celebrity endorsementsendorsements

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Risks InvolvedRisks Involved Although celebrity endorsement can Although celebrity endorsement can

bestow bestow special attributes upon a product that it special attributes upon a product that it may have lacked otherwise. may have lacked otherwise.

But celebrities are after all mere mortals But celebrities are after all mere mortals made of flesh and blood like us. If a made of flesh and blood like us. If a celebrity can enhance the merits of a celebrity can enhance the merits of a brand, he or she can also exacerbate the brand, he or she can also exacerbate the image of a brand.image of a brand.

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Disadvantages of celebrity Disadvantages of celebrity endorsementsendorsements

A celebrity’s impact is limited to providing a distinctive identity and added value to brand. DoesA celebrity’s impact is limited to providing a distinctive identity and added value to brand. Doesnot have the power to improve or debilitate the efficiency and features of the core product. not have the power to improve or debilitate the efficiency and features of the core product. The The celebrity approach has a few serious risks:celebrity approach has a few serious risks:

The reputation of the celebrity may derogate after he/she has endorsed the The reputation of the celebrity may derogate after he/she has endorsed the productproduct: :

the behaviour of the celebrities reflects on the brand, celebrity endorsers may at times the behaviour of the celebrities reflects on the brand, celebrity endorsers may at times become liabilities to the brands they endorse.become liabilities to the brands they endorse.

Pepsi Cola's suffered with various tarnished celebrities – Madonna, Michael Jackson, Mike Pepsi Cola's suffered with various tarnished celebrities – Madonna, Michael Jackson, Mike Tyson was accused of beating his wife and was jailed for rape. Nike – it entrusted its good Tyson was accused of beating his wife and was jailed for rape. Nike – it entrusted its good name to basketball star Kobe Bryant who was trailled for sexual assault. name to basketball star Kobe Bryant who was trailled for sexual assault.

Inconsistency in the professional popularity of the celebrityInconsistency in the professional popularity of the celebrity: : The celebrity may lose his or her popularity due to some lapse in professional The celebrity may lose his or her popularity due to some lapse in professional

performances. performances. e.g. Tendulkar went through a prolonged lean patch, Chrysler decided to discontinue with e.g. Tendulkar went through a prolonged lean patch, Chrysler decided to discontinue with

Celine Dion after $14 million deal. Celine Dion after $14 million deal. Shane Warne incident in 2003 World Cup - testing positive for consuming banned Shane Warne incident in 2003 World Cup - testing positive for consuming banned

substances – Pepsi - sponsor of tournament found itself on an uneasy wicket.substances – Pepsi - sponsor of tournament found itself on an uneasy wicket. The vampire effectThe vampire effect: :

the issue of a celebrity overshadowing the brand. the issue of a celebrity overshadowing the brand. audience will remember the celebrity and not the brand. audience will remember the celebrity and not the brand. e.g. campaigns of Dawn French—Cable Association, Britney Spears & Beyonce Knowles – e.g. campaigns of Dawn French—Cable Association, Britney Spears & Beyonce Knowles –

personalities considered too overpowering for Pepsi, Castrol commercial featuring Rahul personalities considered too overpowering for Pepsi, Castrol commercial featuring Rahul Dravid.Dravid.

These campaigns were aborted due to celebrities getting in the way of effective These campaigns were aborted due to celebrities getting in the way of effective communication.communication.

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Disadvantages of celebrity Disadvantages of celebrity endorsementsendorsements

Mismatch between the celebrity and the image of the brandMismatch between the celebrity and the image of the brand: : Celebrities manifest a certain persona for the audience. Celebrities manifest a certain persona for the audience. Each celebrity portrays a broad range of meanings, involving a specific personality Each celebrity portrays a broad range of meanings, involving a specific personality

and lifestyleand lifestyle Must be congruency between the persona of the celebrity and the image of the Must be congruency between the persona of the celebrity and the image of the

brand.brand. Madonna, for example, is perceived as a tough, intense and modern women Madonna, for example, is perceived as a tough, intense and modern women

associated with the lower middle class. The personality of Pierce Brosnan is best associated with the lower middle class. The personality of Pierce Brosnan is best characterized as the perfect gentlemen, whereas Jennifer Aniston has the image of characterized as the perfect gentlemen, whereas Jennifer Aniston has the image of the ‘good girl from next door’.the ‘good girl from next door’.

Multi brand endorsements by the same celebrity would lead to overexposureMulti brand endorsements by the same celebrity would lead to overexposure: : The novelty of a celebrity endorsement gets diluted if he does too many The novelty of a celebrity endorsement gets diluted if he does too many

advertisementsadvertisements commoditisation of celebritiescommoditisation of celebrities, who are willing to endorse anything for big bucks. , who are willing to endorse anything for big bucks. e.g. Waseem Akram, Tendulkar, Katrina Kaif, Ali Zafare.g. Waseem Akram, Tendulkar, Katrina Kaif, Ali Zafar

Celebrities endorsing one brand and using another (competitor)Celebrities endorsing one brand and using another (competitor): : Sainsbury’s problem with Catherine Zeta Jones - used for its recipe advertisements Sainsbury’s problem with Catherine Zeta Jones - used for its recipe advertisements

but was caught shopping in Tesco. but was caught shopping in Tesco. Britney Spears who endorsed one cola brand and was repeatedly caught drinking Britney Spears who endorsed one cola brand and was repeatedly caught drinking

another brand of cola on tape.another brand of cola on tape. Contractual Issues with celebritiesContractual Issues with celebrities

Celebrity might hold for a large fee at contract renewal Celebrity might hold for a large fee at contract renewal might not be available (Telenor – Sonia Jahan)might not be available (Telenor – Sonia Jahan) Might switch to a major competitor (Mobilink & Telenor)Might switch to a major competitor (Mobilink & Telenor)

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Ethical DilemmaEthical Dilemma On an average person celebrities can exert enormous On an average person celebrities can exert enormous

influence on their behaviour and lifestyles. influence on their behaviour and lifestyles. An aspirational reference group - individual wishes to An aspirational reference group - individual wishes to

belong -when a teenage football fan follows David Beckham belong -when a teenage football fan follows David Beckham or a young girl idolises Britney Spears. They identify with or a young girl idolises Britney Spears. They identify with them although they never had face to face contact.them although they never had face to face contact.

Celebrities are paid to endorse the brand. How objective & Celebrities are paid to endorse the brand. How objective & honest they are in selecting a brand to endorse is also honest they are in selecting a brand to endorse is also questionable.questionable.

Celebrity endorsement can sometimes conceal Celebrity endorsement can sometimes conceal underperformance of certain brands.underperformance of certain brands.

Relevance and information attributes were key missing Relevance and information attributes were key missing ingredients from most celebrity ads. ingredients from most celebrity ads.

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Case StudiesCase Studies Companies must be careful when Companies must be careful when

selecting celebrities to represent selecting celebrities to represent their brands. their brands. some spokespersons have worked some spokespersons have worked

wonders for their brands wonders for their brands while for others after short spell of while for others after short spell of

success it has resulted in success it has resulted in embarrassment and tarnished image.embarrassment and tarnished image.

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Case StudiesCase Studies Lewis Hamilton has been voted the UK’s Lewis Hamilton has been voted the UK’s

favourite brand ambassador in a poll of 2,000 favourite brand ambassador in a poll of 2,000 consumers undertaken by UTalkMarketing. consumers undertaken by UTalkMarketing.

Beckham’s income from endorsements fell Beckham’s income from endorsements fell 6.6 per cent in 2007 which suggests the 6.6 per cent in 2007 which suggests the value of Beckham is diminishing and value of Beckham is diminishing and everyone is longing for a new sports hero. everyone is longing for a new sports hero. Lewis Hamilton appears to be adopting that Lewis Hamilton appears to be adopting that role. role.

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Case StudiesCase Studies Basketball Pro LeBron James vouches for Nike & Coca Basketball Pro LeBron James vouches for Nike & Coca

Cola Powerade and Sprite brands.Cola Powerade and Sprite brands. Young golfer Michelle Wie – her image to Nike, Sony.Young golfer Michelle Wie – her image to Nike, Sony. McDonald’s, Sprite, Nutella their super spokesperson McDonald’s, Sprite, Nutella their super spokesperson

Kobe Bryant was charged with sexual assualt.Kobe Bryant was charged with sexual assualt. H&M, Chanel, Burberry had to publicly dismiss Kate H&M, Chanel, Burberry had to publicly dismiss Kate

Moss after she was photographed using cocaine.Moss after she was photographed using cocaine. Pepsi, McDonald’s, Ford faced embarrassment when Pepsi, McDonald’s, Ford faced embarrassment when

gambling scandals threatened to dirty the squeaky gambling scandals threatened to dirty the squeaky clean image of their spokesperson, Wayne Gretzky.clean image of their spokesperson, Wayne Gretzky.

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Worst Celebrity Worst Celebrity EndorsementsEndorsements

Tiger Woods - NikeTiger Woods - Nike Lance Armstrong – Radio ShackLance Armstrong – Radio Shack Kenny Mayne – Gillette Kenny Mayne – Gillette Dale Earnhardt JrDale Earnhardt Jr - - Nationwide Auto InsuranceNationwide Auto Insurance

Tiger's sponsors chose to address his Tiger's sponsors chose to address his "mistakes" in their ads rather than the "mistakes" in their ads rather than the products that he was supposed to be hawking. products that he was supposed to be hawking.

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Tiger WoodsTiger Woods In the ten trading days after the beginning of the scandal, firms with

products endorsed by Woods suffered significant declines in stock market value, relative to both the entire stock market and a set of competitor firms.

The top five sponsors (Accenture, Nike, Gillette, Electronic Arts and Gatorade) lost 2-3 percent of their aggregate market value after the accident, and his core three sponsors EA, Nike and PepsiCo (Gatorade) lost over four percent.

The scandal sent a negative market-wide signal about the reputation risk associated with celebrity endorsements.

As of mid-2009 professional golfer Eldrick ‘Tiger’ Woods earned roughly $100 million annually in endorsement income, an amount far greater than that earned by any other athlete. On November 27, 2009, Mr. Woods was involved in a car crash outside his home. Following the crash, a series of news reports about both the crash and Mr. Woods’ personal life damaged his public reputation, and several sponsors either stopped featuring him or dropped him outright.

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Kate MossKate Moss Kate Moss- scandal of 2005 Kate Moss- scandal of 2005 Three companies immediately opted Three companies immediately opted

out of their contracts with the out of their contracts with the supermodel after a tabloid published a supermodel after a tabloid published a photo of her allegedly snorting photo of her allegedly snorting cocaine. cocaine.

Burberry, Chanel and H&M all panicked Burberry, Chanel and H&M all panicked that she would bring their brands down that she would bring their brands down on her fall from grace. on her fall from grace.

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Lance ArmstrongLance Armstrong Lance Armstrong's "No Emoticons" ad for Lance Armstrong's "No Emoticons" ad for

Radio Shack IRadio Shack I The ad never actually mentions "Radio The ad never actually mentions "Radio

Shack" by name, nor are there any Shack" by name, nor are there any prominent storefront, aisle or product shots. prominent storefront, aisle or product shots.

A typical open-ended response from a A typical open-ended response from a viewer indicated that she "had no clue what viewer indicated that she "had no clue what they were advertising until the Radio Shack they were advertising until the Radio Shack sign comes up [at the end of the ad]." sign comes up [at the end of the ad]."

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ConclusionConclusion Despite the obvious economic advantage of using relatively unknown Despite the obvious economic advantage of using relatively unknown

personalities as endorsers in advertising campaigns, the choice of personalities as endorsers in advertising campaigns, the choice of celebrities to fulfil that role has become common practice for brands celebrities to fulfil that role has become common practice for brands competing in today's cluttered media environment. competing in today's cluttered media environment.

There are several reasons for such extensive use of celebrities. Because There are several reasons for such extensive use of celebrities. Because of their high profile, celebrities may help advertisements stand out from of their high profile, celebrities may help advertisements stand out from the surrounding clutter, thus improving their communicative ability. the surrounding clutter, thus improving their communicative ability. Celebrities may also generate extensive PR leverage for brands. Celebrities may also generate extensive PR leverage for brands.

It would be presumptuous to consider celebrity endorsement as a It would be presumptuous to consider celebrity endorsement as a panacea for all barricades. Celebrity endorsement if used effectively, panacea for all barricades. Celebrity endorsement if used effectively, makes the brand stand out, galvanizes brand recall and facilitates makes the brand stand out, galvanizes brand recall and facilitates instant awareness.instant awareness.

To achieve this, the marketer needs to be really disciplined in choice of To achieve this, the marketer needs to be really disciplined in choice of a celebrity. Hence the right use of celebrity can escalate the Unique a celebrity. Hence the right use of celebrity can escalate the Unique Selling Proposition of a brand to new heights; but a cursory orientation Selling Proposition of a brand to new heights; but a cursory orientation of a celebrity with a brand may prove to be claustrophobic for the of a celebrity with a brand may prove to be claustrophobic for the brand. A celebrity is a means to an end, and not an end in brand. A celebrity is a means to an end, and not an end in himself/herself.himself/herself.