The Advantages and Disadvantages of Celebrity Endorsements

Celebrity ties can do wonders for brands--and can hurt them, too.

From Humphrey Bogart and Lauren Bacall advertising Robert Burns Cigarillos and Betty Davis selling Lustre Cream Shampoo to Bill Cosby and Jello Pudding, companies have long loved using celebrities to endorse their brands. And who can forget Brooke Shields’ famous line, “You wanna know what comes between me and my Calvins?”

It’s true: Celebrity endorsements can reap huge rewards for a brand. Yet they have numerous pitfalls that companies should consider before developing an endorsement program.

The Benefits of Celebrity Endorsements

• Build brand equity. Prior to Michael Jordan, Nike primarily sponsored tennis and track athletes. Nike wanted expand into new markets. Who better to sign than one the most electrifying young athletes in sports? The Nike-Jordan partnership has blossomed into its own multibillion dollar subsidiary company, Air Jordan.
• Help people remember ads.Celebrity endorsements can improve ad recall, according to researchers Jagdish Agrawal and Wagner Kamakura. When people would see or hear Dennis Haysbert on the show “24,” they associate his voice with Allstate.
• Make people believe the product contributes to superstar status. Mobile One uses NASCAR superstar Tony Stewart to endorse its brand, which leads consumers to believe that Motor One oil contributes greatly to the performance of his car—and his success.
• Stand out. Research from Charles Atkin and Martin Block suggests that “celebrities may help advertising stand out from the surrounding clutter.” People like watching George Clooney or Natalie Portman more than local dentists and attorneys.

Note: It takes time and repetition for association to occur. Celebrity endorsements are not short-term tactics.

Selecting a Celebrity for a Brand

Brands are important company assets. Advertisers need to select celebrities who represent the image and promise of their brands. (For more information on brand promises, read FrogDog’s article series on branding.) Not all celebrities fit with all brands.

For example, at the height of “Sex and the City,” Sarah Jessica Parker signed on as a face of Gap. However, Parker was so closely associated with her show’s haute couture style that the association didn’t resonate with consumers. In 2005, Gap replaced her with Joss Stone and Keith Urban, who are more likely to wear Gap-style clothing in the public eye. Since then, Gap has continued to use celebrities who align better with their brand, such as the Avett Brothers and Kaki King.

The Risks of Celebrity Endorsement

Yet even if a celebrity is a good fit for the brand, using one for endorsements has its own set of possible risks:

• Images change. Celebrities make mistakes. And when they do, they can affect the brands they endorse. In 2009, Tiger Woods’ public image crumbled after his infidelity with a number of women, including pornography actresses, hit the news. General Motors, Gillette, Accenture, and Gatorade dropped Tiger to avoid negative perception. Nike stuck around and lost customers. And the golf industry as a whole saw a major revenue slow-down with no Tiger on the course.
• Celebrities become overexposed. At the height of Tiger Woods’ popularity, he endorsed over ten companies at once. When a celebrity works with so many companies, the celebrity’s credibility may suffer. People may feel that the celebrity will endorse anything to make a buck.
• Celebrities can overshadow brands. Consumers may focus on the celebrity, not the product. This is a particular danger when celebrities endorse multiple products at a time. David Beckham endorses a number of companies, which feature him prominently in print advertising. However, his image as the focal point of advertising devalues many products. Do you remember the brand or do you remember David Beckham?

Thinking about using a celebrity for endorsement? Not a bad idea. But you might want to think twice—it’s a possible minefield.

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Image courtesy of Savatore Vuono/ FreeDigitalPhotos.net