Celebrity Endorsements - Buyer Behavior

Celebrity Endorsements

Jake Komet, Sam Lampert, Brian Englander, Tanner LaFrance, Ethan Freeman

Table Of Contents

Abstract…………………………………………………………………… #2

Introduction……………………………………………………………….. #3

Situation Analysis………………………………………………………… #3

Applicable Theoretical Models………………………………………….. #5

Recommendations……………………………………………………….. #10

References………………………………………………………….......... #13

Abstract

Celebrity endorsements allow firms an active way to tap into new markets of consumer bases and allow a powerful association with the brand or product. This paper suggests pros and cons that can result from the use of celebrity endorsements. While association with a well-known celebrity that has similar characteristics of the product or brand can result in significant sales boosts, a scandal or negative association with a celebrity may have detrimental results. Throughout this paper, we provide an abundant amount of past campaigns that have yielded high sales volumes as well as campaigns that have caused detrimental damage to the strength of the brand. Furthermore, this paper suggests that two of Dr. Robert Cialdini’s principles of persuasion are extremely important when evaluating a potential celebrity endorser, specifically the liking and authority principals. The range of effectiveness theory also plays an important role in a successful endorsement campaign – suggesting that the celebrity and product must have a congruent relationship in order to be effective. We also suggest that the celebrity must have a connection to the product in order to allow the consumer to relate to the advertisement. Lastly, this paper offers recommendations to firms that are debating utilizing the strategy of a celebrity endorsement. These recommendations are imperative to the success of a celebrity endorsement campaign. Our results offer insight into the common phenomenon of celebrity endorsements, and also shed light more generally on the ways that this strategy may affect a company's ability to increase profitability.

Introduction

Celebrity endorsing is a form of advertising that many companies employ in order to link their product with a famous figure. Whether the product is a sports drink, makeup, car, or food, the celebrity endorsement accompanying the product is engrained in the mind of the consumer and creates a link in the brain that automatically connects that celebrity with the product. Marketers tend to use celebrity figures in hoping that the powerful and positive image that surrounds the celebrity figure will be transferred to the product that would be associated with such celebrities. Not only do marketers hope to find powerful celebrities that will endorse their product, but they hope to find the right celebrity that is harmonious with their product and represents the product and company in the correct manner. When discussing the impact of celebrity endorsements, NFL wide receiver Jerry Rice said, "I accept ambassador roles with companies who have products I use or wear so that the relationship is authentic and not forced. You are agreeing to represent a certain company and you have a responsibility to represent them in the best possible way”. The topic of celebrity endorsing is important to discuss because of the importance that celebrities play on advertising. Their ability to shape the consumer’s mind, no matter how much they truly believe in the product, continues to push more and more advertisers to invest in a celebrity endorsement.

Situation Analysis

Celebrities see much of there following come from social media, and through such channels these celebrities are able to endorse a product. Social media is a means of communication the marketing world has never seen before. It is relatively new and changing by the day. Whether it is Instagram, Twitter, Facebook, or Snapchat, companies must work around the clock 7 days a week to capitalize on the latest trends. Through our research, it can be seen that celebrity endorsements are a double edged sword. In his piece, The Impact of Social Media on Society, Jacob Amedie discusses the pro’s and con’s brands must navigate through with celebrities in the social realm. He starts out by discussing the beneficial role it can have on companies. Amedie claims that brands can use social media to capture endorsements that happen in everyday life. He states that a brand doesn't need an endorsement deal to take advantage of celebrity's likeness on social media. After the Super Bowl, Peyton Manning’s post game involved a comment he made about “Budweiser” speech during the Super Bowl. Budweiser took advantage and showed how they used that to the their advantage despite having no direct deals with Manning. Amedie also brings up the dangers of athlete social media and issues a warning for companies. The author claims that each company must do extensive research on a celebrity’s social media pages before giving endorsements. He brings up two examples that show the consequences of not completing research beforehand. Jacob criticizes the Los Angeles Lakers for drafting a player who demeaned Kobe Bryant prior to being draft. He warns that this very behavior can lead to negative brand equity. While athletes and celebrities can alter their brand and re-establish themselves (Ryan lochte/Tiger Woods/Michael Phelps), it is much hard for a brand to change its reputation and the damage caused by a poor social media decision can be detrimental to the life of a company.

Social media and brand equity go hand in hand. When a company entrusts a celebrity endorser with its brand, the equity of the company and celebrity become intertwined whether the business realizes it or not. For this reason, Vadivelu Thusyanthy, argues that pinning ad campaigns around multiple celebrities is the best route for companies to take when marketing. In his piece, The Relationship Variables to Celebrity Endorsement and Brand Equity, Thusyanthy argues that tying an ad campaign to one person can become detrimental to brand equity. While the author acknowledges successful campaign spokesperson Peyton Manning in relation to Papa John’s and Nationwide, he cautions companies about the backlash that can come from pinning your entire brand on one person. The author demonstrates his logic by using Subway’s former spokesperson, Jared Fogel. He claims that throughout a 12 year span, Subway invested tens of millions of dollars in global ad campaigns featuring Fogel and his weight loss journey. Although the campaigns were successful for a period of time, it all came to an end when Jared was arrested and jailed under child pornography charges. Subway had to reverse course and spend millions to buck the negative publicity that hit the brand for multiple years. Much like Amedie, this author believes celebrity endorsements are a tricky investment that a company must research thoroughly before committing to.