Celebrity Endorsements: Help or Hindrance?

What do R&B singer Chris Brown and Olympic champion Michael Phelps have in common? Like countless other celebrities, they both lost or jeopardized lucrative endorsement deals. To be fair, the reasons they were ditched by their respective corporate partners differed, but the end result was the same.

Brown came under a cloud amid reports he attacked his girlfriend Rihanna after a party on the eve of the Grammy Awards show. The Wm. Wrigley Jr. company responded immediately by suspending all advertising for itsDoublemint chewing gum featuring Brown. Wrigley’s reaction wasn’t surprising; advertisers can’t afford to wait for controversies to be resolved because they run the risk of damaging their own reputations. They need to keep consumers from perceiving guilt by association.

The wholesome boy-next-door Phelps failed to live up to his Olympian persona. The image of the multi-gold medalist took a blow after a photo circulated of him smoking marijuana. The swimming phenomenon didn’t lose all his gold-plated deals–Visa stuck by him while Kellogg’s parted ways.

Paying for a star’s cache to leapfrog a brand over the competition has been around almost since the dawn of marketing, as we know it today.

The practice of “borrowing equity” from a celebrity is a proven way to attract attention, create excitement for products and build awareness among prospective customers.
But the concept of using celebrities to help promote products has come a long way since doctors endorsed cigarettes in the 1950s. Now, much care is taken to align stars appropriately with products. Examples include athletes promoting sporting goods or glamorous movie stars lending their allure to high-end fashion lines.

As advertisers refine the art of harnessing star power for promotional outreach, research indicates marketers should also show a connection between ordinary people and their products or services. After all, the vast majority of customers will come from the rank and file rather than the rich and famous.

Researchers at the University of Bath in the UK conducted a study to test the effectiveness of ads featuring regular folks versus celebrities. One group of undergraduate students was asked to respond to a magazine ad for a digital camera depicting a fictional student describing the camera as “hot” and his “preferred choice.” A separate group of undergrads reviewed the same camera ad using a German celebrity. The group that reviewed the “student” ad had a more favorable response.

Despite what the public thinks, marketers perceive that these public figures are believable and credible. Yet due to the risk and challenges inherent in having these high-profile endorsers advocate multiple products, savvy marketing experts often advise against it. Scheduling difficulties and ego are common hindrances in working with these personalities.

Marketers are better off spending their budgets developing creative, multifaceted strategies and executing integrated marketing that will make their products stand apart.