Branding Strategy Insider

Celebrities In Advertising: A Marketing Mistake?

Popular wisdom asserts that getting a celebrity endorsement is a tried-and-true, simple-to-implement way to maximize advertising effectiveness. Sure, it's expensive, but celebrities always yield stronger ties with viewers and, ultimately, greater sales, right?

Wrong. Over the course of last year, time and time again we observed incredibly low effectiveness scores of TV ads starring celebrities. From Tiger Woods to Donald Trump, we found that with rare exception, celebrity endorsements were largely ineffective and failed to yield the benefits popular wisdom promises.

We set out to understand whether celebrities today are really worth the significant investment that brands were making. We studied every nationally televised ad for the first 11 months of 2010 and found that celebrity ads performed either below average or merely equaled it. Specifically, our study, 2010 Celebrity Advertisements: Exposing a Myth of Advertising Effectiveness, 2010, showed that fewer than 12% of ads using celebrities exceeded a 10% lift, and one-fifth of celebrity ads had a negative impact on advertising effectiveness.

Why was this?

Celebrity Endorsement Guide

Nike is known around the world for being one of the most iconic brands. It was recently ranked as the world’s 25th most valuable brand in terms of its brand value – USD10.8 billion – by the annual Business Week’s global top 100 brand survey. In spite of many market maneuvers (such as the recent merger between Adidas and Reebok), Nike has remained the leader in its category. Nike is also very well known for another aspect and that is its consistent use of celebrities to endorse the brand. In fact one of the most successful collaborations between a brand and a celebrity is that of Nike and Michael Jordan.

So successful was the collaboration that Nike and Jordan launched a new brand variant called the Air Jordan line of sport shoes. Nike pulled off a very similar coup in the sports industry when it joined forces with the ace golfer Tiger Woods to enter the golf category with its apparel, equipment and accessories. Nike had no experience in golf before. Moreover, golf being a very elite game, it was generally considered that a brand like Nike would not be very successful. This might have probably been true had Nike chosen the traditional path to building its equity in the golfing arena. But Nike chose to associate with the best golfer in the world and have him endorse the brand. As is known today, Nike has emerged highly successful in golf.

This channel now being used by many brands around the world raises some crucial questions about ways brands are built and also about the impact such collaborations have on branding. Is associating with a leading celebrity the easiest way to build a brand? Should celebrity endorsement be the principal channel of brand communications? How can brands decide on potential brand endorsers? What are the advantages and disadvantages of such endorsements? Is celebrity endorsement always beneficial to the brand? How does a celebrity enhance a brand image? Answers to these and many other related questions are the content of this post.

Formula For The Right Brand Spokesperson

L'Oreal announced a new addition to their roster of celebrity spokespeople this week, signing actress Julianna Margulies as a new ambassador and celebrity face for the brand. Ms. Margulies currently stars in the critically acclaimed TV series "The Good Wife," for which she won a Golden Globe and SAG award for her portrayal of a loyal yetbetrayed wife of a politician. 

Does it surprise you that L'Oreal (and most other beauty brands (both luxury and mass merchandiser) went the expected route and found a high-profile beauty to front for their brand? We weren't. But just because it's predictable doesn't mean it isn't practicable, and there are two basic ways a celebrity can positively affect a brand. 

The first is by creating what might be called "borrowed equity," when the celebrity causes more attention to the brand than otherwise might be the case, an approach usually used when a brand is seeking high levels of awareness. The second is when the spokesperson association actually increases the brand's equity that is, when the values inherent in the spokesperson significantly reinforce brand values. If successful, the brand is then seen to better meet, and can even exceed, expectations consumers dream about for the ideal in the category.

When The Brand Appeal Just Isn't There

This weekend, if the papers are to be believed, we might see the first British men's finalist at Wimbledon for more than 70 years. I am not convinced that Andy Murray will make it to an apparently inevitable final against Federer on Sunday, but, irrespective of his performance on the courts this week, the bigger marketing question relates to the potential appeal of 'Brand Murray'.

The concept has reached a peak in recent months, fuelled by both the player's short odds to win Wimbledon and his decision earlier this year to join 19 Entertainment, David Beckham's agency, which is widely portrayed as the epitome of brand-building expertise in relation to celebrities and sports stars.

A source close to the agency, quoted last week, confirmed that work on Brand Murray had begun: 'The ambition is global. The potential is enormous.'

Yes, and the bullshit is plentiful. Despite predictions that Brand Murray will soon be worth £100m a year, the harsh reality is that Murray is a fine tennis player, but a hopeless prospect as the next Beckham, no matter how advanced the brand strategy applied to his future career.

Let's start with a fundamental commercial limitation for Brand Murray - he is not exactly a looker. For all the talk of Brand Beckham, the fact remains that David was beautiful long before the agents and brand gurus came calling. Former Wimbledon champion and cultural diplomat Pat Cash got himself into a bit of trouble last week when he pointed out that Murray was not in the same league. According to Cash, Murray is 'never going to be eye-candy' and has 'the most boring, monotone voice in the history of the planet'. Cash went on to extol Murray's ability on court, but his comments highlight the importance of aesthetic appeal when you are up against the likes of Nadal and Ivanovic.

The Michael Phelps Endorsement Factor

Open the big book of celebrity endorsement scandals, it's time to make another entry. Swimming star Michael Phelps was just having a bit of fun last November while visiting his girlfriend at the University of South Carolina when, along with all the shots and beer he consumed at a house party that weekend, he also had a toke on a bong that was being freely passed around.

Phelps had probably forgotten all about this weekend until the photo of his bong hit appeared on the cover of the News of the World last weekend.

The reaction was immediate. USA Swimming banned Phelps from competition for three months and the media reported that his lucrative sponsorship deals would almost certainly dry up.

That prediction came true as Kellogg announced it would not renew its tie-up with the star. The reaction of Kevin Adler, founder of Chicago sports marketing firm Engage Marketing, was typical of the expert commentators. 'Athletes are brands. If you do something that runs contrary to your brand image, it will affect your ability to monetise that brand image. It really is that simple,' he concluded.

No, it really is not that simple. For starters, Phelps is not a brand. He is an athlete who, through association with brands, can confer meaning. People, no matter how famous, are not brands. Yes, they have symbolic meaning, but so do road signs and mythological gods, and no one is confusing them with brands.

It would also be a mistake to assume that Phelps' actions will damage his reputation.

Celebrity Endorsements: Selling and Unselling

In a recent post I raised the issue of people and brands licensing their names. My general conclusion was that for the most part, it's a waste of money and could be a problem for the brand itself.

It might be worth some words on the use of celebrities in the brand business: the good, the bad and the ugly.

What prompts my further thoughts on this subject is Macy's major celebrity effort to try and restore some luster to its recent and somewhat unsuccessful effort to build a national chain of 825 stores under the Macy's brand. Their television ads feature such celebrities as Martha Stewart, Sean "Diddy" Combs, Jessica Simpson, Donald Trump and Emeril Lagasse. All have something in common: They sell name-branded items at Macy's.

Will this do the trick? Will this jazz up the department-store category under attack from the mass merchandisers or the specialty retailers? My feeling is that the answer to this question is: not likely. Here are the reasons.

First of all, successful celebrity brands have to have a very direct connection to the celebrity. It has to make sense to the prospect. Michael Jordan selling Nike sneakers is the Mount Everest of marketing.