The Cost & Worth of Celebrity Endorsements

Despite offering a chance to pocket hefty profits, celebrity endorsements can become a double-edged sword

Celebrity endorsements are a popular promotional tactic used by luxury labels, consumer product manufacturers and service providers to increase brand awareness and drive customer loyalty. Consider the number of books that have become bestsellers after being mentioned on Oprah’s Book Club. This phenomenon shows just how strongly buying decisions can be influenced by star-studded praise. However, despite having potential to propel sales growth, partnerships with famous personalities can also expose companies to significant risks.

The Gains

Charlotte Casiraghi, granddaughter of Rainier III, Prince of Monaco, and Grace Kelly, is a Gucci brand ambassador and appears in the label's latest ad campaign with the iconic Flora scarf designed exclusively for her grandmother

The main motivation that drives brands to establish associations with celebs is simple. People who admire the star’s talent, personality, or aspire to lead a similar lifestyle, tend to favor products and services that their idol uses or wears. And even though fans understand that the celebrity gets paid for such promotions, they still believe that their favorite persona wouldn’t endorse anything they don’t like.

The star partnership also affects company’s customers outside of the celeb’s fanbase, because getting a famous personality to be spotted donning one of the label’s garments can result in increased brand awareness and speedier client acquisition.

Moreover, if chosen right, the celebrity ambassador can amplify the label’s unique character and message using their personal charisma.

The Hindrances

After Kate Moss found herself in the middle of a drug scandal, Chanel, Burberry, and H&M severed ties with her

Studies show that consumers often associate companies and products with stars who endorse them. Therefore, scandals or negative publicity around the celebrity’s name might taint the brand by association. Furthermore, if the ambassador’s persona isn’t a good match with the product they endorse, people are likely to transfer the star’s negative qualities onto the brand.

On the other hand, a large portion of your customers may not be driven by the celebrity factor. So before you splurge on a contract with a famous persona, invest into market research to understand how your target clients shop and what influences their purchasing decisions, and tailor your strategy accordingly.

Also, since surveys show that celebrities are considered to be the least trustworthy source for product recommendations, companies would be well-advised to carefully evaluate the costs and the benefits of signing on a star before committing to such a relationship.

The How To’s

Because celebrity endorsements present both high risks and high rewards, follow these tips to ascertain that your partnership with a star does not become a liability.

Colin Firth and his wife Livia are well-known as staunch supporters of sustainable living and advocates of eco fashion

– Assess your label ambassador’s persona and make sure that it matches the values and the image of your brand, so as not to create dissonance in the consumers’ minds.

– Choose a celebrity who is well liked and regarded as credible and trustworthy by your existing and potential clientele. Ideally, the star’s fanbase should fit in with your target customer profile.

– Pick a personality that will support your brand, not overshadow it. A-list names aren’t always the best option.

– Aim for authenticity. Sign on someone who genuinely loves your label and openly supports it, rather than a person who’s in it solely for the money.

– If you are concerned about bad PR, include morals clauses in the contract to prohibit or restrain certain unwanted behaviors.

– One celebrity appearance may mean a lot or go unnoticed. The success lies in constantly creating publicity rings and establishing clear distribution schemes to direct the public to the coveted items. Otherwise, the stunt may not translate into the lucrative commercial results.