Do Celebrities Sell?
It’s a fairly common technique to employ a celebrity to endorse a brand, and research shows that it can have a positive impact. In the U.S., celebrities show up in more than 15 percent of advertisements.
One big success story that marketers point to is that of Michael Jordan’s deal with Nike, which continues to be a bonanza for Nike and Jordan. In Jordan’s case, his original 1984 deal morphed from the “Be Like Mike” campaign into a separate Jordan-branded subsidiary for Nike. Even though Jordan retired from the game in 2003, the brand brings in an estimated $2.5 billion a year in sales and earns Jordan an estimated $100 million annually in royalties. Comparatively, LeBron James’ sneakers brought in a reported $300 million in 2013.
One study found that sales increased an average of 4 percent in the six months after an endorsement deal began—controlling for ad spending and other factors that could increase sales—so the celebrity effect was real. Some brands in the study saw sales jump more than 20 percent.
But before you rush out and try to sign a famous face, beware of the dark side of celebrity, because they are people, with flaws and foibles. That point couldn’t be more apparent than when Subway sandwich stores’ pitchman Jared Fogle pleaded guilty to possessing child pornography and paying for sex with minors. Fogle—who credits eating at Subway with helping him lose roughly 250 pounds—has long been associated with the brand, appearing in commercials and making personal appearances on behalf of the chain. How Fogle’s actions ultimately affect sales remains to be seen, but it certainly can’t help the sandwich chain, which saw sales decline 3 percent last year and has been struggling due to tough competition from Chipotle and Panera.
One big advantage of employing a celebrity endorser or spokesperson is the instant exposure and affiliation it provides a brand, which can help differentiate it in a crowded category. Adding the Ralph Lauren name to a line of paint colors is one way, but the same strategy didn’t fare quite as well for the licensee for Martha Stewart’s paint when the domestic diva was sent to prison for insider trading. It should be noted that Stewart weathered the reputation storm, and her paint is still in the market and doing well, so it’s not impossible to bounce back, but that’s the exception to the rule.
Southern-fried cooking celebrity Paula Deen, for example, hasn’t been able to come back from her 2013 disaster, when it was revealed that she had used a racial slur. Deen was fired from the crown jewel in her empire—her show on Food Network—and she quickly saw sales of her line of cookware evaporate.
It’s tough to find Deen on any kind of media these days, though she did recently open a restaurant, Paula Deen’s Family Kitchen, in Pigeon Forge, Tenn., right next door to Dolly Parton’s Dollywood theme park and Jimmy Buffett’s Margaritaville hotel.
Closer to home, General Mills was probably one of the first marketers to effectively utilize celebrity endorsements when its Wheaties brand put sports stars on cereal boxes, billing it as the “Breakfast of Champions.” Wheaties was also one of the first brands ever to advertise on television, with a live announcer spot in 1939 during a televised major league baseball game between the Cincinnati Reds and Brooklyn Dodgers. And the brand can also lay claim to a very popular departed celebrity—Ronald Reagan.
Before Reagan became famous as an actor, he was broadcasting Wheaties-sponsored Chicago Cubs games out of Des Moines, Iowa. He was named Wheaties’ most popular sports announcer in the country, which led to an all-expense paid trip to California, where he took a screen test. The rest is history.
Before Target created its partnerships with celebrity designers Michael Graves, Isaac Mizrahi, and others, the retailer went through a passel of celebrities, from Aretha Franklin to Betty White, in an effort to differentiate its brand. Back then Target also had an affiliation with Magic Johnson, which they quietly let expire after the former NBA star revealed he was HIV-positive.
While some marketers believe a brand needs to be strong enough to stand on its own merits—in the culture of social media where peer endorsements have more sway than traditional advertising does—having a notable person with credibility alongside your product can have its benefits, which is what Nike golf was going after when it signed Tiger Woods. Just keep in mind that famous people are people. TCB
Glenn Karwoski (email@example.com) is founder and managing director of Karwoski & Courage marketing communications agency. He also teaches at the Opus College of Business at the University of St. Thomas.