The High Cost of Celebrity Endorsements
By George Anderson
Kobe Bryant, Michael Jackson, Madonna, Bill Cosby…the list goes on of celebrity endorsers who have been involved in personal scandals or controversies and, in the process, drawn unflattering attention to the consumer product companies and retailers that pay the sometimes millions of dollars to represent their brands to the public.
Mr. Bryant, who of his own admission is an adulterer, saw his once positive public image take a huge hit when a woman in Colorado accused him of rape two years ago.
While prosecutors dismissed the rape charge against the Los Angeles Laker star, Mr. Bryant did publicly apologize to his accuser and agree to an out-of-court settlement in a civil case.
At the time of his arrest on the rape charge, Mr. Bryant was being touted by many as the next “Mike” (Jordan not Jackson or Tyson). He was young, handsome, articulate (much has been made of Mr. Bryant’s ability to speak foreign languages) and accessible.
Nike, McDonald’s and other companies were seen as having scored a coup when they originally signed Mr. Bryant to endorse their products, but all backed away after his arrest.
Nike has reversed that position and begun using Mr. Bryant in ads appearing in Sports Illustrated.
Cynthia Stone, spokesperson for the Colorado Coalition Against Sexual Assault, told The Associated Press that the athletic wear manufacturer is sending the wrong message with Mr. Bryant in its ads.
“Corporations like Nike play a huge part in creating role models for millions of young athletes,” she said. “It would be a great inspiration to those young people if the endorsers were not only accomplished athletes, but also had a reputation for positive and ethical conduct.”
Moderator’s Comment: Where do you stand on celebrity endorsements? Does using a celebrity divert or focus attention on the product or service being sold?
Are Nike and other companies wise to use Kobe Bryant and others with personal scandals in their background as celebrity endorsers? –
George Anderson – Moderator
Kobe Bryant Resumes Endorsement Career – The Associated Press/Forbes.com
Celebrity endorsements send me, personally, off in the opposite direction (ditto logos on clothes) AND I think it’s sad that they work BUT I do think they are an extremely successful sales tool. As someone else said, a bit of scandal sometimes adds even more excitement depending on the audience at which the product is aimed. Unless the world changes a lot, I can’t see celebrities being deprived of this money for old rope revenue stream any time soon.
Scanner…I, too, am unimpressed by celebrity endorsements…at least, I tell myself that all the time. But the cult of personality factor is obviously strong and getting stronger in the world. We’ve gone from commercials to reality shows where we gawk like Peeping Toms at celebs’ every private moment.
But just to point out the positive effects that can come from endorsements, I heard yesterday that Lance Armstrong’s yellow LIVESTRONG bracelets, which had an original money-raising goal of $6 million (if memory serves), have surpassed the $50 million mark…with 100% of proceeds going to cancer research. Then again, Lance is launching full steam into his retirement (if we can believe that) with a complete Nike clothing line. I guess no one can deny that he’s worked for it. It’s odd that we should want to wear what Lance wears….don’t we?
It seems to me that celebrity endorsements are getting over-saturated and therefore whatever appeal they had/have is getting diluted fast. Sports stars have always been aware of the limited life of their primary careers and the smart ones had post-career business and endorsement plans in the works. These days, “stars” of every ilk are working their fifteen minutes like there’s no tomorrow, from every angle, and turning themselves into multi-media brand machines while the iron is hot. I think this, cultural factors, and revved up celebrity media have also sped up the scandal recovery time exponentially. . .a major scandal basically becomes an inconvenient speed bump. Soon we will long for the humble days of endorsements, when no one felt a need to move from tennis into fashion design into acting into . . .
Using a celebrity is always a gamble. They can be a hero one day and a loser the next. Most people realize that only low quality products or products designed for inexperienced consumers use celebrity endorsements. I learned that the hard way a few years ago after buying some of the junk Paul Harvey endorses. You never know what will happen first with celebrity endorsements — either the product will fall apart or the celebrity will fall apart.
Much as thought leaders may dislike celebrity endorsements and the overpriced products they pitch, they clearly work or we wouldn’t see so many of them. And the younger (much younger) generation doesn’t care so much if these celebs are scandal-ridden, and in fact the scandals might even boost their popularity, to a point. Even for us middle agers, take a look at NASCAR drivers and all the stuff they endorse – these endorsements clearly work and make everyone involved plenty of money.
Case in point are the Nike ads themselves. The ads using image and average folks have been far more effective than the celebrity ads.
Judging by Buick sales, I don’t think Tiger Woods has a positive effect either.
The only thing I can see from any of them is huge dollars wasted on athletes that don’t need the money in the first place.
It seems to me that there are far more effective ways of marketing your product than filling the pockets further of millionaire athletes.
As a consumer, I am unimpressed by most celebrity endorsements, in that the celebrities often have little, if any, expertise regarding the products they endorse. Even when celebrities do endorse a product relevant to their livelihood, it cannot be assumed that they personally used the product before they were paid to use it. There are certainly some exceptions but, in my opinion, those relate only to unpaid endorsements to charitable organizations.
However, while wearing my business hat, it is undeniable that celebrities do have influence over consumer spending. One look at a teen cosmetics shelf in any drug store demonstrates the influence of pop stars like Jessica Simpson, Brittany Spears, the Olsen Twins, etc. Each company needs to weigh the cost of this kind of promotion, along with the potential negative effects when good publicity goes bad, when deciding if celebrity endorsement is the right move.
For the most part, celebrity endorsements do nothing for me. However, I do believe for many, especially aspiring young athletes, actresses or models, celebrity endorsements can influence behavior and be very motivational. If this is true, the celebrity “speaks” for the product and, therefore, represents the company. Their behavior is linked to the company.
If I were Nike, I’d find another spokesperson …there are other very talented stars that speak volumes about winning, good hard team-work, good values and the advantages of superior equipment.
I believed Ted Williams when he endorsed fishing lures for Sears. But nobody since.
Celebrity endorsements began in earnest in the 50’s, at a time in which we (American Public) naively believed a celebrity used and truly endorsed the product. Twenty years later, we still believed celebrities with cache, and bought the idea Joe DiMaggio was so in love with Mr. Coffee he just had to tell us. The current data suggests celebrity endorsements do nothing for unrelated (underwear on Michael Jordan vs. shoes) product sales, but are still being contracted. My personal thought on this is one of ego, because a CMO or CEO in a well-funded public company loves rubbing elbows with celebrity, and signing a Michael Jordan or Vanessa Williams means sitting next to them at Christmas parties. The money is better spent on a good casting agent, who can find a face and a demeanor who will actually lend credence to your product, with very little exposure in terms of scandel or press. Witness Wilford Brimley of oatmeal and insurance, or Jared of Subway. While the product is tied to trust-equity, the exposure to potential scandal (as well as the contract costs) are marginal.