celebrity endorsement final_to b print

8/2/2019 Celebrity Endorsement Final_to b Print

1/17

WATCH BRIEF REPORT

CELEBRITY

ENDORSEMENT

SUBMITTED BY-

GURSIMRAN KAUR # 806-974-663

ROSHNI PATEL # 810-236-901

SUNNY SHARMA # 810-178-616

DATE- 11th Feb 2011

Background


2/17

It is a known fact that the best endorsements achieve an eclectic balance between the product

(brand) and the celebrity. Giving brand a 'face' is more than just a marketing strategy to increase

sales or gain market share, it is a decision that can change the future of the brand forever.

Advertisement started playing an active role when it came to the development of the society in the

economy in the early 1930s. Celebrities acted as spokespersons in order to advertise and promote

products and services and ideas. Those celebrities came from the art scene, modeling, sports and

the movie industry. The advertisers used celebrities as pioneers in order to dictate trends. British

actress Lillie Langtry appeared on a package of Pears soap in 1893, she became the worlds first

celebrity endorser.

Justinsings the praises of our furry friends in his PSA that reads,

"Animals Can Make U Smile. Adopt From Your Local Shelter."

Choice of the celebrity is of utmost importance and is usually done based on many different

parameters - appeal, looks, popularity or even just a fantasy figure to endorse a brand.

In today's highly competitive markets, big brands are at logger-heads when it comes to products,

Worlds first celebrity endorserBritish actress Lillie Langtry (1893-ww.bl.uk/onlinegallery)


3/17

each having a similar product to that of a rival. Where does one brand gain that quintessential

advantage - advertising, service, promise of trust, or even the all important price factors?

Advertising seems to be the best platform where brands prefer to compete on - right from hiring the

best advertising agencies to getting the biggest celebrities. What would be the formula to success

then? Well, a good creative agency, a large enough promotional budget and a huge star to endorse

your brand would definitely ensure in the minds of a brand management team a feeling of security,

success and a triumph over the competitors brand.

Why Celebrities?

The general belief among advertisers is that brand communication messages delivered by

celebrities and famous personalities generate a higher appeal, attention and recall than those

executed by non-celebrities. The quick message-reach and impact are all too essential in today's

highly competitive environment.

In communicating with target audiences it has been shown that the persuasiveness of a

communication message is affected by the various characteristics of the source selected. The

persuasiveness of an advertisings message is determined by the two distinct explanations,

Lancme has bestowed the first definition on Julia

Roberts in the ongoing epic "Another Day, Another

Celebrity Endorsement."


4/17

credibility and attractiveness of the source used. Advertisers often use celebrities because of their

famous attributes including beauty, courage, talent, athleticism, grace, power, and sex appeal

that often represent the attractions desired for the brands they endorse. The repeated association of

a brand with a celebrity might ultimately lead consumers to think the brand possesses the attractive

qualities that are similar to the celebritys. Furthermore, consumers may like the brand because

they like the celebrity who endorses it. The celebrities used as endorsers are primarily chosen from

the entertainment business or the athletic field.

Celebrity endorsers are being used in about 25% of all television advertisements in order to

promote brands. These endorsers are being paid by about 10 % of advertiser's budgets. Marketers

invest huge amounts of money in contracts with celebrity endorsers each year, since they believe

that celebrities affect the process of selling of their brands or products. A celebrity endorser is an

individual who enjoys public recognition and who uses this recognition on behalf of a consumer

good by appearing with it in an advertisement (marketing communication). Research has shown

that in general celebrity endorsement influences the feelings of the consumers and can also

influence the attitude consumers have towards the advertisement and attitude towards the brands,

which can increase the purchase intentions and, consequently, increase sales.

Endorsers Categories

Endorsers can be divided into three broad groups: experts, lay endorsers and celebrities.

In January 1956, Procter and Gamble launched Crest toothpaste with the theme of cavity prevention. Despite

heavy advertising over four and a half years, Crest achieved only a 12 per cent market share versus Colgate's

35 percent. Colgate had been the leading brand of toothpaste in the US market for many decades. Then in

August 1960, crest won an endorsement by the American Dental Association as the only toothpaste that

prevented dental cavities and one of only three means of fighting dental cavities. A massive advertising

campaign announcing that endorsement catapulted crest into the leadership of the toothpaste market, a position

it still retains.


5/17

An expert is a person who is considered as having a specific knowledge in the particular area that

is to be promoted. Typical experts are chosen because of their knowledge which they have gathered

through studies, training or experience. An example is when a toothpaste company uses a dentist in

a commercial to underline the credibility of the product.

Lay Endorsers can be real or fictitious and are unknown individuals or characters. These

individuals or characters are selected to be similar to the target segment which makes it possible

for the target segment to identify with the endorser and the message. The anonymous voice-over in

video and audio advertisements is often that of a lay endorser.

Celebrity endorsement has been defines as: Any individual who enjoys public recognition and

who uses this recognition on behalf of a consumer good by appearing with it in an advertisement.

Today TV stars, movie actors, famous athletes and even dead personalities are widely used to

endorse products. By definition, a celebrity is a well-known personality who is known to the public

for his or her accomplishments in the areas other than the product class endorsed. Today use of

celebrities in advertising strategies is becoming more and more sophisticated and complicated.

From 1979 to 1997 the popularity of using celebrities in advertising in the USA increased from 15

to 25% and nowadays more than 20% of all TV commercials feature celebrities. The magazine

Forbes (2004) lists the top 100 celebrities by measuring how much they earn, web hits, press clips

and TV/ radio appearances. Today all of these celebrities have exclusive endorsement contracts e.g.

Tiger Woods $ 105 million contract with Nike (Forbes 2004).

Types of Celebrity Endorsements

Celebrity branding has many aspects. A slight change in the type of branding used can result in

either a great success or a dismal failure. Celebrity branding falls into five general categories:


6/17

Testimonial: The celebrity acts as a spokesperson for the brand.

Imported: The celebrity performs a role known to the audience.

Invented: The celebrity plays a new, original role.

Observer: The celebrity assumes the role of an observer commenting on the brand.

Harnessed: The celebrity's image is integrated with the ad's storyline.

Celebrity Endorsements as a Strategy to profitability

How Tiger Woodss endorsement of Accenture is beneficial to the company in sending the

message of high performance. This is just an example of having celebrity endorsement.

Marketers of consumer products have long used celebrities to endorse their product - and this has

become a common strategy.

A growing number of firms are investing in celebrity endorsement to enhance the value of

advertising dollars and build brand equity, a natural question is: What are the economic returns

from the investment in this form of advertising? Hence the main purpose of many big organizations

is to assess the profitability of the celebrity endorsement advertising strategy. Studies done in the

past by organizations on the impact of celebrity endorsements have provided valuable insights into

consumers' responses to advertisements that portray celebrities. It is important for a manager to

know whether a celebrity endorsement strategy generates a favorable consumer response, as well

as understand whether the economic returns justify the costs associated with such a strategy.

Measuring the overall effect of advertising expenditures on sales is problematic, and a direct

assessment of the effectiveness of a celebrity endorsement on a firm's profitability may be

impossible. In addition, because advertising effects accrue over time, current profits may not


7/17

accurately reflect the true profitability of a given campaign. The difficulty associated with isolating

and measuring the profit associated with a given celebrity endorsement campaign led us to use an

alternative measure. This is the expected profit associated with a celebrity endorsement campaign

as reflected in the abnormal returns of a firm. Abnormal returns are measured using event study

methodology. Although a firm's profit is influenced by several factors, and isolating the

contribution of any one variable is difficult, the event study methodology provides a means and

unique opportunity to assess the impact of a particular strategy on a firm's expected future profits.

Federal Trade Commission Guidelines for celebrity endorsement

The Federal Trade Commission guides concerning use of endorsements and testimonials in

Advertising require a celebrity endorsement (in order to not be deceptive) to meet the following

criteria:

1. Statements must reflect the honest opinion, findings, beliefs, or experience of the celebrity;

2. The accuracy of the celebrity's claims must be substantiated by the advertiser;

3. Any efficacy claims must be substantiated, if capable of substantiation if such claims were made

by the advertiser;

4. If the advertisement claims the celebrity uses the product or service, the celebrity must in fact be

a bona fide user; and

5. The advertiser can only use the endorsement so long as it has a good faith belief that the

celebrity continues to hold the views expressed in the advertisement. 16 C.F.R. 255.0 et seq.

(1980).


8/17

Top Five Expensive Spokespersons (Forbes list)

Sr. No. Celebrity Name Category Earning (Mn $) Brands

1. Tiger Wood Athletes $ 118 Mn Nike, Accenture

2. Michael Jordan Basketball legend $ 45 Mn Nike, Coca-Cola

3. Roger Federer Tennis Player $ 40 Mn Nike, Wilson, Rolex,

Gillette, Mercedes Benz,

Jura, and NetJets

4. Jay Z Rap Star $ 30 Mn HP Laptops

5. David Beckham Soccer Star $ 10 Mn LA Galaxy

Other than these there are celebrities those are counted as influential spokes persons are from

Hollywood and Music Industry, U2, Sandra Bullock, Johnny Depp, Madonna, Briteny Spears are

to name few.

Advantages of Celebrity Endorsement

Brands have been leveraging celebrity appeal for a long time. Across categories, whether in

products or services, more and more brands are banking on the mass appeal of celebrities. The


9/17

accruement of celebrity endorsement can be justified by the following advantages that are

bestowed on the overall brand.

Establishment of credibility: Approval of a brand by a star fosters a sense of trust for that

brand among the target audience- this is especially true in case of new products.

Ensured Attention: Celebrities ensure attention of the target group by breaking the clutter

of advertisements and making the ad and the brand more noticeable.

PR coverage: is another reason for using celebrities. Managers perceive celebrities as

topical, which creates high PR coverage. A good example of integrated celebrity campaigns

is one of the Worlds leading pop groups, the Spice girls, who have not only appeared in

advertisements for Pepsi, but also in product launch and PR events. Indeed, celebrity

company marriages are covered by most media from television to newspaper.

High degree of recall: People tend to commensurate the personalities of the celebrity with

the brand thereby increasing the recall value. Golf champion Tiger Woods has endorsed

American Express, Rolex and Nike. Actress Catherine Zeta- Jones is used by T-Mobile and

Elizabeth Arden. 007 Pierce Brosnan promotes Omega, BMW and Noreico.

Associated Benefit: A celebritys preference for a brand gives out a persuasive message-

because the celebrity is benefiting from the brand, the consumer will also benefit.

Mitigating a tarnished image: Many companies want to restore the consumers

confidence so they use celebrities to get some good output from the brand. Cadbury, Pepsi,

Coca cola and lot more companies have done it.


10/17

Psychographic Connect: Celebrities are loved and adored by their fans and advertisers use

stars to capitalize on these feelings to sway the fans towards their brands.

Demographic Connect: Different stars appeal differently to various demographic

segments like age, gender, class, geography etc.

Mass Appeal: Some stars have a universal appeal and therefore prove to be a good bet to

generate interest among the masses.

Rejuvenating a stagnant brand: With the objective of infusing fresh life into the stagnant

products celebrity endorsement is used.

Disadvantages of Celebrity Endorsement

Celebrity endorsement can sometimes compensate for lack of innovative ideas. This approach

has few serious risks:

The reputation of the celebrity may derogate after he/she has endorsed the product

Pepsi Cola suffered with three tarnished celebrities Mike Tyson, Madonna and Michael

Jackson. Since the behaviour of the celebrities reflects on the brand, celebrity endorsers

may at times become liabilities to the brands they endorse.

Multi brand endorsements by the same celebrity would lead to over-exposure The

novelty of the celebrity endorser gets diluted if he does too many advertisements. This may

be termed as commoditization of celebrities who are willing to endorse anything for big

bucks.


11/17

Celebrity endorsing one brand and using another (competitor) Sainburys

encountered a problem with Catherina Zeta Jones whom the company used for its recipe

advertisements, when she was caught shopping in TESCO.

Britney Spears was endorsing Pepsi but many times spotted

drinking Coca-cola.

Mismatch between the celebrity and the image of the brand Celebrities manifest a

certain persona for the audience. It is of paramount importance that there is an egalitarian

congruency between the persona of the celebrity and the image of the brand. Each celebrity

portrays a broad range of meanings involving a specific personality and life style.

Madonna, for example, is perceived as a tough, intense and modern woman associated with

the lower middle class. The personality of Pierce Brosnan is best characterized as perfect

gentleman whereas Jennifer Aniston has the image of the good girl from next door.

The Vampire effect This terminology pertains to the issue of a celebrity overshadowing

the brand. If there is no congruency between the celebrity and the brand, then the audience

will remember the celebrity and not the brand. Examples are the campaigns of Dawn

French Cable Association and Leonard Rossiter Cinzano. Both of these campaigns were

aborted due to celebrities getting in the way of effective communication.


12/17

Celebrity Endorsement Statistics According to an IPAN-IMRB Research (2008),

86%-Remember celebrity ads

3%-Feel celebrities effect buying decision

84%-Believe quality and price is the input factor.

2%-Consider celebrity importance

5%-Believe stars endorse brand for money

22%-Believe celebrities use products they endorse.

INFLUENCE OF CE ON PURCHASE DECISION WHO MAKE BEST CELEBRITY ENDORSEE

Sport

person36%

Film Actor /Actress

42%

Politican5%

Socialworker

8%

Writer9%

StronglyDisagree

15% Disagree26%

Undecided

11%

Agree42%

StronglyAgree

6%


13/17

Example: Nike Endorsement by Tiger Woods

Nikes new Tiger Woods commercial is going viral in a massive way, according to new stats from

Visible Measures. The clip, which features Tiger looking into the camera while his fathers voice

states the wish to find out what (his) thinking was, received more than 2.7 million views on

YouTube in about a week on Nikes official YouTube channel. Visible Measures also counted

more than 160 reposts, mashups and parodies, accumulating a total of 7.1 million views and more

than 15,000 comments.

One of the big drivers of the videos virality seems to be social media. The ad has been making

waves on Twitter since late last week, according to dataprovided by Trendrr. Woods obviously got

a bit of a buzz out of his participation at the Masters, but both he and Nike got a big boost out of

the commercial as well. Nike was mentioned in about 8,000 tweets per day before the release of the

commercial. The day after it came out, that number jumped to 24,846.
http://www.trendrr.com/http://www.trendrr.com/


14/17

One interesting aspect of the ad is that the parodies, mashups and video commentaries have

actually become more popular than the spot produced by Nike itself. More than 100 of the 160

clips Visible Measures was able to track down on YouTube are derivatives, many of which simply

replace Earl Woods voice with a different audio track. These parodies actually became more

popular than the original clip over the weekend, and are still growing strong, whereas the Nike ad

itself has lost some steam.

"In golf ball terms, the endorsement of Nike products by Tiger Woods, which began in 2000,

resulted in the acquisition of approximately 4.5 million customers and $60 million dollars in profit

(in 1997 dollars) for the last 10 years," a news release on the study noted.

"From the findings of this study, which involve one specific product, we conjecture that similar

market impacts have been realized across a full line of golfing equipment, which Tiger Woods was

paid $180 million for 10 years (in 1997 dollars) to endorse," said Kevin YC Chung, a doctoral
http://newteevee.files.wordpress.com/2010/04/tigernike_twitterdaily.jpg


15/17

candidate and one of three from Carnegie Mellon involved in the study. "Having found that $60

million was recovered in the golf ball sector alone, we project that this would intensify the overall

profits and losses across the golfing industry."

The fact that Nike retained Woods in the wake of his off-course controversies also paid a dividend,

the study showed. "In the six months following Mr. Woods' highly publicized personal scandal,"

the news release state, "Nike lost approximately 105,000 customers. However, these losses were

not gained by other brands as the negative publicity resulted in a net loss to the golfing industry,

overall, of $7.5 million in profit."

Conclusion

A brief assessment of the current market situation indicates, that celebrity endorsement advertising

strategy can under the right circumstances indeed justify the high costs associated with this form of

advertising. The use of celebrity for endorsements creates a very favorable impact on the consumer

and it creates a connection which forces a consumer to purchase a product. However, as several

failures show, it is essential for advertisers to be aware of the complex processes underlying

celebrity endorsement.

It has been proved from the discussion that celebrity endorsements are a powerful and useful tool

that magnifies the effect of a campaign but the word of caution to be followed seriously; celebrities

alone do not guarantee success nor does a great advertising campaign or the best possible product.

It is the combination of several factors and elements that work together for the success of a brand

and its acceptance in the minds of consumers as well as for its market offering.


16/17

Modern day consumers are well educated and smart, they know celebrities are being paid for these

endorsements and this knowledge makes consumers rather more cynical about the product and

celebrity endorsements. Majority of the consuming population also knows what is advertising and

how it actually works and this knowledge of consumer makes the task of celebrity endorsement all

the more difficult and challenging for the advertising companies and the sponsors. Canadian

companies, both advertising and product offering companies, have to make an effort to overcome

this ever-mounting challenge.

References:


17/17

1. http://www.venturerepublic.com/resources/Branding_celebrities_brand_endorsements_bran

d_leadership.asp

2. http://www.indianmba.com/Faculty_Column/FC706/fc706.html

3. http://www.indianmba.com/occasional_papers/op88/op88.html

4. http://www.chillibreeze.com/articles/Celebrity-endorsement.asp

5. http://forbes.com/search/find?

tab=searchtabgeneraldark&MT=top+ten+celebrities+of+year+2010

6. http://www.forbes.com/2009/07/14/most-influential-women-in-media-forbes-woman-

power-women-oprah-winfrey.html

7. http://www.luxist.com/2009/12/07/lancome-selects-julia-roberts-as-global-ambassadres/

8. http://www.peta.org/features/justin-bieber-promotes-adopting-animals.aspx

9. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1203322&rec=1&srcabs=571701

10.http://www.ndtvmi.com/b4/dopesheets/garima.pdf

11.http://gigaom.com/video/nike-hits-gold-with-tiger-woods-commercial/

12.http://www.golfdigest.com/golf-tours-news/blogs/local-knowledge/2010/12/study-nikes-

investment-in-tiger-profitable.html#ixzz1DbFbbpwJ
http://www.venturerepublic.com/resources/Branding_celebrities_brand_endorsements_brand_leadership.asphttp://www.venturerepublic.com/resources/Branding_celebrities_brand_endorsements_brand_leadership.asphttp://www.indianmba.com/Faculty_Column/FC706/fc706.htmlhttp://www.indianmba.com/occasional_papers/op88/op88.htmlhttp://www.chillibreeze.com/articles/Celebrity-endorsement.asphttp://forbes.com/search/find?tab=searchtabgeneraldark&MT=top+ten+celebrities+of+year+2010http://forbes.com/search/find?tab=searchtabgeneraldark&MT=top+ten+celebrities+of+year+2010http://www.forbes.com/2009/07/14/most-influential-women-in-media-forbes-woman-power-women-oprah-winfrey.htmlhttp://www.forbes.com/2009/07/14/most-influential-women-in-media-forbes-woman-power-women-oprah-winfrey.htmlhttp://www.luxist.com/2009/12/07/lancome-selects-julia-roberts-as-global-ambassadres/http://www.peta.org/features/justin-bieber-promotes-adopting-animals.aspxhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1203322&rec=1&srcabs=571701http://www.ndtvmi.com/b4/dopesheets/garima.pdfhttp://gigaom.com/video/nike-hits-gold-with-tiger-woods-commercial/http://www.golfdigest.com/golf-tours-news/blogs/local-knowledge/2010/12/study-nikes-investment-in-tiger-profitable.html#ixzz1DbFbbpwJhttp://www.golfdigest.com/golf-tours-news/blogs/local-knowledge/2010/12/study-nikes-investment-in-tiger-profitable.html#ixzz1DbFbbpwJhttp://www.venturerepublic.com/resources/Branding_celebrities_brand_endorsements_brand_leadership.asphttp://www.venturerepublic.com/resources/Branding_celebrities_brand_endorsements_brand_leadership.asphttp://www.indianmba.com/Faculty_Column/FC706/fc706.htmlhttp://www.indianmba.com/occasional_papers/op88/op88.htmlhttp://www.chillibreeze.com/articles/Celebrity-endorsement.asphttp://forbes.com/search/find?tab=searchtabgeneraldark&MT=top+ten+celebrities+of+year+2010http://forbes.com/search/find?tab=searchtabgeneraldark&MT=top+ten+celebrities+of+year+2010http://www.forbes.com/2009/07/14/most-influential-women-in-media-forbes-woman-power-women-oprah-winfrey.htmlhttp://www.forbes.com/2009/07/14/most-influential-women-in-media-forbes-woman-power-women-oprah-winfrey.htmlhttp://www.luxist.com/2009/12/07/lancome-selects-julia-roberts-as-global-ambassadres/http://www.peta.org/features/justin-bieber-promotes-adopting-animals.aspxhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1203322&rec=1&srcabs=571701http://www.ndtvmi.com/b4/dopesheets/garima.pdfhttp://gigaom.com/video/nike-hits-gold-with-tiger-woods-commercial/http://www.golfdigest.com/golf-tours-news/blogs/local-knowledge/2010/12/study-nikes-investment-in-tiger-profitable.html#ixzz1DbFbbpwJhttp://www.golfdigest.com/golf-tours-news/blogs/local-knowledge/2010/12/study-nikes-investment-in-tiger-profitable.html#ixzz1DbFbbpwJ

celebrity endorsement final_to b print

Documents