Do Celebrity Endorsements Matter?

  • March 19, 2014 at 12:01 PM EDT
  • By Retail TouchPoints Team
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Happy Wednesday, RTP readers! For today’s installment of our Editor Q&A column, the team ponders the impact of celebrity endorsement. The popularity of comedian Amy Poehler sparked the conversation with her move to Old Navy commercials from Best Buy. With the SNL alum being such a hot commodity, it made us wonder the impact of celebrity endorsements. See our thoughts below:

Debbie Hauss, Editor-In-Chief: Celebrity endorsements can certainly be a gold mine for both the celebrity and the brand. Pepsi, for one, has taken it to a very high level over the years — from signing Michael Jackson in 1984 to Nicki Minaj, Jeff Gordon and Drew Brees more recently. Both musicians and athletes seem to be the most popular choices. Cheerios has done extremely well promoting athletes over the years. And, Harvard Business School has stated that athlete endorsements boost both stock returns and sales. But brands must be wary of the breaking point with their celebrity spokespeople. There’s definitely a diminishing return at some point, so brands should not wait until sales start to drop before dropping their celebrities. Investments in celebrities also come with great risk. Celebrities don’t always live up to their squeaky clean image. Tiger Woods is certainly one of the best known examples, but don’t forget about Lance Armstrong, OJ Simpson, Michael Phelps and (more recently) Justin Bieber. Female celebrities also have disappointed…Madonna, the Kardashians and Sharon Stone have shamed their sponsors, as well. With any marketing strategy, brand marketers must know their audience and what (and whom) they will respond to, then weigh the risks vs. the rewards.

Alicia Fiorletta, Senior Editor: It’s always interesting to see which celebrities brands and retailers embrace. Many times I squeal with joy and can’t help but say: “What a perfect fit!” Other times, not so much. Thanks to the success of Michael Jackson’s deal with Pepsi, the soft drink company has consistently invested in pop stars. Britney Spears comes to mind as the jackpot representative for the brand. The unveiling of her commercial was a pivotal moment across television screens worldwide. And who couldn’t love it? At the time, Spears was the ideal image of pop royalty. Cute outfits, pretty face and killer dance moves, she represented the must-have qualities of the All-American Pepsi drinker. Too bad she was caught many times chugging Coca-Cola. Whoops. Other times, I don’t understand the connection with celebrity endorsements, which makes me question the brand’s reasoning and overall meaning of the marketing campaign. For example, Kristen Stewart’s deal with Balenciaga left a bunch of question marks above my head. The girl has been quoted saying she doesn’t care about fashion and has worn ripped sneakers on the red carpet many times…what does that say about the brand? Marc Jacobs’ recent campaign featuring Miley Cyrus drew even more negative buzz due to the Disney-star-gone-bad’s recent antics. When we ask whether celebrity endorsements matter I guess the answer is: It really depends. But either way, I think it’s important for businesses to know their audience, aspirational celebrities tied to that audience, and ways to efficiently correlate the relationship between the two.

Kim Zimmermann, Managing Editor: Celebrity endorsements and appearances in ads can certainly help, but they can also backfire. When things are going great for the brand and the celebrity, they work. When things are not going so well for the celebrity (Tiger Woods, Paula Deen, etc.), they’re a distraction. I liked the 80s celebrities theme of the Radio Shack ad, but the retailer came under fire after spending so much on a Super Bowl ad and then closing more than 1,000 stores. Celebrity endorsements can work, but retailers have to go in with eyes wide open and know that they are just one run-in with the paparazzi away from seeing it all blow up.

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Glenn Taylor, Associate Editor: Hollywood stars, musicians and professional athletes alike fascinate a large portion of the general public due to the assumption (accurate or not) that they live luxurious lifestyles. The perceived gap between these celebrities and the average consumer slightly closes whenever they promote a product that can be feasibly purchased by anyone. It’s natural to want to emulate people you look up to, and these celebrities are no exception. I think the celebrity image can help a no-name brand get some mainstream exposure that it would otherwise have a difficult time garnering, but I don’t believe they represent a huge boost for brands everyone knows about. If anything, the celebrity needs to be attached to an engaging campaign in order for it to sell with the viewers. Additionally, the pairing has to make sense. A celebrity probably shouldn’t be chosen to endorse a product if the pairing can’t supply a short narrative. Good storytelling stands above all in driving sales, regardless of the method presented.

Brian Anderson, Associate Editor: Some may say that “any publicity is good publicity,” but I think the impact celebrity endorsements have on customer engagement (and overall sales) really depends on the celebrity. Companies look to celebrity endorsements to make a personal connection with an audience outside of their target radius. Also, associating a celebrity with a product/service can help customers believe that the brand is of superstar status. However, all of this depends on the celebrity’s actions in their day-to-day routine. Tiger Woods is an interesting example of how a celebrity’s image inadvertently affects the brands they endorse. Woods’ had endorsed over 10 brands at the height of his career, but his infidelity led to many of those brands dropping him — except for Nike. In the end, the scandal cost Woods’ corporate sponsors up to $12 billion, according to a UC Davis study. When it comes to celebrity endorsements, retailers need to understand that the celebrity has a massive impact on your business. But it’s difficult to say whether it would be for better or for worse.

What are your thoughts on celebrity endorsements in retail? Share your thoughts in the comments section below!

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