Person Marketing: Using Celebrities to Endorse Products

This paper will take a closer look at the practice of celebrity endorsements and their marketing value. The use of celebrities to generate greater attention for a given product or service is multifaceted in both the manner in which these endorsements are obtained and the returns for the business they promise. By delving into greater detail about such policies, as well as highlighting the potential returns (both positive and negative), the reader will glean a more complete understanding of one of the most important aspects of marketing a burgeoning product in the twenty-first-century international economy.

Keywords: Brand Ambassador; Match-Up Hypothesis; Product Match-up; Product Placement; Source Attractiveness; Source Credibility

Overview

Throughout the history of commerce, entrepreneurs have consistently sought endorsements of their products and services by high-profile members of society. For example, if a sixteenth-century clothing designer's wares were seen worn by a king or queen, it would follow that sales of that product increased dramatically. Using celebrities to help market products has long been seen as an important catalyst to increased sales and profitability.

This paper will take a closer look at the practice of celebrity endorsements and its marketing value. By delving into greater detail about such policies, as well as highlighting the potential returns (both positive and negative), the reader will glean a more complete understanding of one of the most important aspects of marketing a burgeoning product in the twenty-first-century international economy.

If It's Good Enough for Them . . .

A celebrity is not just someone who has risen to the top of his or her field. Of course, he or she may be an expert on a given subject, and therefore, someone whose opinions on the value of a certain product or service matter to the ordinary consumer. Then again, celebrities are also attention-getters, people who live in the spotlight — on the movie screen, in the ballpark, or on the Internet — and have a following among the general public.

Celebrity endorsements speak to that spotlight. For example, by having NBA superstar LeBron James, professional golfer Tiger Woods, and other high-profile athletes affix their names and likenesses to their apparel, Nike creates a perceived link between the extraordinary accomplishments of these individuals and their products; this connection can lead to considerably higher sales and profit generation (Grede, 2008). The appearance of movie stars or the use of popular songs in television and radio commercials can create similar connections among consumers.

Applications

Professional Athletes

In 1934, a Kellogg's cereal brand unveiled its newest box, complete with the photo of New York Yankees star Lou Gehrig. For more than seven decades after that iconic moment, Wheaties boxes connected great athletes with consuming the product, claiming, "What's on the box shows that Wheaties fuels champions. What's in the box proves it" (Wheaties.com).

The use of professional and high-profile amateur athletes (such as Olympians) has become commonplace among business marketing endeavors. With the Wheaties perspective in their minds, countless retailers, beverage producers, restaurants, and candy manufacturers have long sought to affix the faces of high-profile sports athletes to their products and services. Many of these athletes are considered to be in the highest echelon of the sport they represent. NBA superstar LeBron James (who was drafted out of high school rather than college) signed a seven-year, $90-million contract with sports retailer Nike right after he signed a contract with the Cleveland Cavaliers. As part of that relationship, his name was on no fewer than 10 shoe styles, including six "LeBron James" signature models. Additionally, he signed deals with bubble gum maker Bubblicious, sports card maker Upper Deck, and beverage giant Coca-Cola, among others (Horrow & Swatek, 2009). By 2013, even after a controversial, yet highly successful transfer to the Miami Heat, James's endorsement income alone amounted to $40 million (Van Riper, 2013).

The use of athletes in marketing products is not simply lucrative for the athlete. The fact that professional golfer Tiger Woods, one of the most recognizable faces in sports, is also one of the most marketed names in the world is not a coincidence. Consistently the biggest draw at PGA events, Woods also draws high television ratings — a drop in viewership in 2008 and early 2009 could be directly connected to the fact that he was absent with an injury.

Products that bear Woods's name and/or endorsement also sell in high volume. Before 1996, Nike did not even have a golf line to sell. However, when Woods burst onto the scene shortly thereafter, consumer demand for products with his name created a surge in golf apparel, equipment, and other product sales. By 2007, Woods had helped build for Nike a lucrative franchise, Nike Golf, which sold well over $600 million for the company that year (Baker, 2008).

Sports marketing and endorsements are not limited to the most famous athletes, either. In fact, countless athletes have endorsed products and services. Many of them do so at the local level, appearing in advertisements for automobile dealerships, local restaurants, and other items of regional interest. Baltimore Ravens offensive tackle Jonathan Ogden may not be as internationally recognized as Tiger Woods, but his notoriety in greater Baltimore led to his appearances in a local insurance company's advertisements. Boston Red Sox star closer Jonathan Papelbon also holds a strong fan base in New England and, as such, appeared in a number of television and radio spots by a regional auto dealership (Fitch, 2009).

Credibility, Attractiveness & Product Match-Up

To understand how businesses look to sports figures to help sell their wares, one may look at three theoretical frameworks: source credibility, source attractiveness, and product match-up (Peterson, 2009). The first of these theories, source credibility, looks at how the athlete in question is viewed in terms of his or her knowledge of the product. Tiger Woods, for example, is exceptionally talented at using golf clubs, and his endorsement of Nike's golf line, therefore, is given great credibility.

The second theory, source attractiveness, suggests that consumers will purchase products and services that are endorsed by athletes that have a positive public persona. Athletes such as New York Yankees captain Derek Jeter, former Chicago Bulls player Michael Jordan, and Indianapolis Colts quarterback Peyton Manning all are known by fans and the general public to be friendly with fans, noncontroversial, and inspirational to those around them. Such reputations give an air of trustworthiness to these figures, and as a result, consumers are more likely to consider purchasing a product they endorse.

Finally, product match-up involves congruence between the endorser and the product. This area has proven more difficult to frame for marketing experts as well as psychologists, in light of the myriad factors that play a role in the relationship between the athlete and the products being marketed. In general contexts, however, product match-up looks at two relationships: the logical connection between the endorser and the product (such as Tiger Woods and the Nike golf club line), and what is known as "match-up hypothesis" (Kahle & Riley, 2004). The latter term alludes to a perceived connection between the endorser and the product that creates an impression with the consumer that the product is all the more beneficial because of the athlete's endorsement.

Of course, professional athletes are but one form of celebrity that is called upon to help sell a product or service. Entertainers, movie stars, musicians, and other celebrities are also considered invaluable endorsers.

The Star Treatment

In the 1930s and 1940s, there was a common activity among Hollywood's A-list of actors. Icons such as Clark Gable, Bette Davis, and John Wayne were all featured in advertisements endorsing tobacco products. In fact, many studios scheduled such publicity with the release of the endorsers' films ("Tobacco Companies," 2008). This practice has persisted in other industries on a more widespread basis in the decades that followed.

The entertainment industry has long been seen as a gold mine for businesses looking to give star power to their products. Such endorsements provide the company and its products with a higher degree of perceived legitimacy among consumers who recognize them — the bigger the star, the more effective the advertisement. In 2011, for example, film actor Emma Watson, of Harry Potter franchise fame, signed a contract with renowned cosmetics company Lancôme. As a representative of her generation, her endorsement represented a way for the company to expand its pool of potential consumers (Naughton, 2011). She is by no means alone — very few entertainers eschew product endorsements, leading one celebrity broker to assert, "The list of [celebrities] that won't do [advertisements] has gotten a lot smaller" ("Shill and Grace," 2009).

Celebrity endorsements from movie stars and entertainers are somewhat different in nature than those of professional athletes. Whereas athletes have a proven proficiency with certain products and, as a result, tend to generate ROI based on that familiarity, movie stars, musicians, and other non-athlete celebrities often lend little more than a familiar face. Model and actor Cindy Crawford, for example, became a "brand ambassador" for Swiss watchmaker Omega in 1995 and, eighteen years later, was still promoting its products (Crawley, 2013). Such brand ambassadors are contractually obligated to exclusively wear that company’s product. Another high-profile actor, Charlize Theron, became enmeshed in a tabloid feeding frenzy when she was wearing a watch made by a competitor to the watchmaker to whom she was obligated (Wicks, 2008).

Although connecting the product with the expertise of the endorser seems more appropriate for athletes than it is for movie stars and the like, the enjoyment experienced by the endorser does show positive returns for the company. Talk show mogul Oprah Winfrey, for example, fostered considerable business for book publishers with her endorsements via her long-running book club and, in some cases, created a surge in book sales (Maryles & Sanborn, 1994).

Product Placement

An important aspect of celebrity endorsements from actors and entertainers is product placement. Whereas some celebrities will appear in commercial advertisements or endorse products on their shows, others simply get paid (or in many cases, are simply given the product free of charge) to be seen with the products close at hand. For example, cosmetics company RevitaLash gave away eyelash conditioner at the 2011 Sundance Film Festival to film stars such as Jennifer Love Hewitt, whose praise helped generate media coverage estimated to be worth $2.4 million in advertising (White, 2011).

Using film or television stars for the purposes of marketing products and services is not dissimilar from the same application for professional athletes. In both cases, a familiar and agreeable visage is attached to a product via advertisement, leading the consumer to connect more readily with the message of the ad. However, whereas Tiger Woods's proficiency with golf clubs translates easily into selling such items, he may not prove to be as easily used when endorsing goods outside of his area of expertise.

The use of movie stars, popular singers, and other entertainers, on the other hand, creates a more general and less specific basis for consumer response. In the use of such celebrities, the advertiser is in essence "conditioning" the consumer — an attractive, well-liked, and even trustworthy figure such as a movie star who is seen in the advertisement may stimulate the consumer into connecting the star with the product. Thus, the consumer will demonstrate a desire to purchase the product (Till, Stanley & Priluck, 2008).

Celebrities of all types are seen as effective vessels by which consumer activity may be stimulated. However, this appeal is neither without condition or risk.

Issues

The Conditions & Risks of Celebrity Endorsements

The Roman emperor Marcus Aurelius once commented, "All is ephemeral — fame and the famous as well" (Bartlett, 1919). Indeed, fame and celebrity is fleeting as well as subject to surges, plateaus, and doldrums. Because of the fluctuations to which sports and entertainment celebrities are susceptible, using these figures to endorse a given product or service is at times a risky or short-term endeavor.

One of the first conditions to an effective celebrity endorsement is relevance. Using a famous person to market products and services requires that the individual projects a positive image for consumers in order to entice them to buy the advertised goods. Much of that ability to affect consumer behavior stems from the celebrity's popularity. After all, the goal of the advertisement is to capture the attention of the consumer via a commercial that stands out in a crowded field of other advertisements (Saurbh, 2009). If the individual is not experiencing success on the field, or has not been seen in a recent successful movie, he or she is not likely to prove an appealing endorser.

Negative incidents are arguably the greatest risk to a company's celebrity endorsement endeavors. Among these negative incidents is personal injury. A sports star who enjoys a high degree of popularity may be out of action for months due to injury, and in light of this fact, the relationship between endorser and business may be placed in jeopardy. Similarly, an actor who is diagnosed with a debilitating disease that will keep him or her out of the movies for a prolonged period of time runs the risk of losing celebrity status and therefore losing that connectivity with the audience (and consumers). Tiger Woods's 2008 knee injury sent apparent shockwaves through the golf world, sending tournament viewership into a 47% drop and his endorsees into a state of concern. When he returned in early 2009, beverage maker Gatorade (which had a relationship with Woods since 2007) took out a large ad in Sports Illustrated that featured a golf fan holding aloft a sign that read "Welcome Back, Tiger" (Vranica, 2009). Nike, however, decided that falling revenues in the Nike Golf division between 2009 and 2010 signaled the time to move on without the athlete that had initially inspired it and embarked on a new golf club line without Woods’s endorsement (Bustillo, 2010).

Injuries and illness are indeed detrimental to effective use of a celebrity marketing campaign. However, scandal and negative press also pose a tremendous risk for those seeking to use a high-profile name to sell their products. Celebrity chef Paula Deen, for example, earned about $17 million dollars in 2012 through a business empire that included a televised cooking show, food product lines, restaurant deals, and endorsements. In June 2013, however, revelations of Deen having used racial slurs and off-color language, along with allegations of racial discrimination against some of her former restaurant employees, led to a slew of restaurants and retailers, including J. C. Penney, Sears, Kmart, Target, Walgreens, Wal-Mart, and Home Depot, dropping their deals with her, amounting to a $5 million loss of revenue (Lazarowitz, 2013). Particularly affected by Deen’s fall from grace were pork producer Smithfield Foods and Novo Nordisk, the manufacturer of a diabetes medication Deen uses, both of which had been endorsees of hers and quickly terminated their contracts with the besmirched cook (Lazarowitz, 2013).

An old axiom states, "The bigger they are, the harder they fall." Indeed, those using celebrity fame, athletic ability, and beauty are taking a gamble that they will see a return on the campaign's investment. It is understandable, therefore, that most of these celebrity endorsement contracts do not last more than a few years. Even though the agreements are ephemeral, there remains great risk that the celebrity's star will rapidly fall and, with it, the company's investment and even reputation.

Conclusions

Using celebrities to market products is one of the most time-honored practices in the history of commerce. While a product's quality, attractiveness, or practicality may generate increased profits through word of mouth, a famed athlete, movie star, or popular musician who is seen using the product and/or speaking out on its behalf gives it nearly instant and broad-reaching attention. If a campaign is developed in just the right way, the magnitude of the star will correspond with the size of the profits.

There is of course a psychology to celebrity endorsements. Such endeavors must connect the star to the product in such a way that the consumer immediately appreciates. The advertising company must therefore understand the target demographic group and subsequently craft a star-product connection that speaks to that demographic's character.

As shown in this paper, there are potential risks involved with celebrity endorsements. Injury and sickness may lower the celebrity's star power, as another star may take that individual's place in the spotlight. Celebrity scandals that involve drug and/or steroid use, drunk driving, domestic violence, cruelty to animals, or other criminal or unethical activity can also destroy a well-designed and high-level advertising investment. Additionally, by connecting the product to the celebrity, when such occurrences take place, there is a risk that the company will be dragged down with the falling star. Nevertheless, after centuries of using celebrities to market products, it remains clear that entrepreneurs will continue to see such practices as a critical investment.

Terms & Concepts

Brand Ambassador: A celebrity who, under contract, wears and/or uses a branded product exclusively.

Match-Up Hypothesis: A perceived connection between the endorser and the product that creates an impression with the consumer that the product is all the more beneficial because of the athlete's endorsement.

Product Match-Up: A marketing theory that involves congruence between an endorser and a product.

Product Placement: A marketing practice wherein a product is given to a celebrity or inserted into a high-profile setting in order to increase the product's visibility.

Source Attractiveness: A marketing theory that maintains that consumers will purchase products and services that are endorsed by celebrities that have a positive public persona.

Source Credibility: A marketing theory that looks at how a celebrity endorser is viewed in terms of his or her knowledge of the product.

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Suggested Reading

Are celebrity brand ambassadors worth the money. (2012). Marketing (00253650), 22. Retrieved November 22, 2013 from EBSCO online database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=78285670

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