Are Celebrity Endorsed Products More Effective than those without Celebrity Endorsement?

Literature Review

Are Celebrity Endorsed Products More Effective than those without Celebrity Endorsement?

The product endorsement concept is not new. In Britain many companies, such as Yardley of London, Clarins Ltd, Elizabeth Arden, Pol Roger, Peter Reed, Heinz, Bacardi, Ford Motor Co etc. has been promoting themselves as ‘by appointment to the Queen’ for decades (Greene 2012) which sheds light on the many advantages a company can enjoy with the patronage of the royal family. Empirical studies done in this regard indicate that consumers are seduced by the idea of acquiring a brand which is endorsed by a famous, widely admired and rich personality, because such transactions creates an imaginary bond between the celebrity and the consumers and they feel associated with the celebrity endorser. The following paragraphs will present a comprehensive account of the researches conducted to determine the effectiveness of celeb-endorsed products in comparison with those without celebrity endorsement.

According to a rough estimate, more than 25% of marketers in the United States use celebrity endorsement strategy (Amos et al 2008, p.209) to advertise their offerings which indicate that large number of advertisers consider celebrity endorsers as a powerful force to attract consumers. It also underlines the fact that companies firmly believe that celebrities have a positive impact on consumer’s intentions to purchase, attitudes towards the products and advertisement and on several other measures of effectiveness. Additionally, the significance of popular endorsers does not merely lie in the fact that firms contract with famous personalities in order to generate better revenues, but also in how these luminaries add value to a brand or company. There are numerous examples where a celebrity endorsed brand resulted in huge profits and increased market share gained by firms. For example, Pepsi co. deal with Spice girls earned the firm 2% rise in its global market share and contract with Michael Jackson resulted in 8 % increase in sales. Similarly, Nike’s agreement with Michael Jordan grossed about $800 million (Rovell 2008) and Tiger Woods turned out to be immensely beneficial as it gained 4.5 million more consumers and around $59 million retail revenue (Chung et al 2011, p.3), and endorsement by Venus Williams caused a dramatic annual increase of $8 Million Reebok Inc. sales (Al Zoubi & Bataineh 2011).

According to a study by Christina Schlecht (2003) (as cited in Al Zoubi & Bataineh 2011), under right circumstances, celebrity endorsement promotion strategies often justify the costs incurred in this mode of advertising. Another investigation by Dr. Vipul Jain (2011) showed that 56% of sample consumers agreed to the assumption that celebrity endorsed goods are of high quality. He also studied the responses of participants regarding apparel purchases and found that out of five decision influencing factors; luxury, brand name, celebrity, instant need and self-esteem, the celebrity factor occupied a significant level of 22%. Vipul’s research findings also revealed that 48% of subjects were motivated to make a purchase because of celebrity endorsement. One of the chief reasons behind the wide-scale use of celebrity endorsement and investment of billions of dollars in such advertising practices is the rising competition for new product proliferation and building consumer consciousness which has compelled marketers to hire glamorous, attention-diverting movie, television or sports stars to support brand promotion (Edrogan 2010).

However, using celebrities to make company offerings more appealing does not always work. This is due to several factors associated with the selected personality. For instance, Pepsi had to face severe consequences in terms of its public image when its million dollar spokesperson Michael Jackson was alleged for drug addiction and child molestation and when another of its major celebrity endorser Mike Tyson, a champion boxer, was convicted of committing rape. Even though contract with Michael Jackson earned Pepsi 8 percent global market share, the deal didn’t last long to yield the anticipated benefits. Since the essence of celebrity marketing is using a personality’s credibility, recognition, trustworthiness for building brand image and by making them endorse a particular product the intent is to transfer celeb unique likable qualities to the brand, the strategy can result in a disaster if the choice of celebrity endorser is not made efficiently (Jones 1999).

Even though signing billion dollar advertising agreements is no guarantee of producing remarkable outcomes in terms of product awareness and profit, yet there are strong evidences that shows involving celebrities in advertising campaigns delivers a premium in terms of brand memorability and impact on consumers. This suggestion has been further validated by a study conducted by Gallup & Robinson Inc. in which careful assessment of 248 celebrity featuring printed ads was done over the period of 11 years, from 1982 to 1993 (Jones 1999, p.194). It was found that celebrity ads showed 34 percent higher level product recall than those ads without celebrity.

Consumers are generally interested in celebrities’ private as well as professional lives which can be judged from the great success of celebrity featuring magazines like National Enquirer, People, and Vogue etc. Any article, news or any other piece of information that provides insight on celebrity happenings easily grabs public attention. Hence familiarity with popular celeb endorsers motivates consumers to take interest and pay attention to the advertisements that features them (Jones 1999, p.195). The effectiveness of celebrity endorsement also largely relies upon the way celebs are used in promotional campaigns. For instance, when Tally Savalas endorsed Gillette Twinjector in an ad wearing a hat, it generated a normal response from viewers and did average to create awareness. However, when Savalas took off his hat to reveal his famous bald pate, the consumer recall level was several times higher.

Amos et al (2008, p. 214) state that consumers view celebrity endorsers as credible sources of information about the product they endorse. Source credibility refers to communicators’ positive traits that influence the receivers’ acceptance of an advertising message. According to Edrogan (1999), the effectiveness of celebrity endorsed products depends upon the perceived reliability, level of expertise and credibility of the chosen endorser and also upon how well the celebrity’s qualities are congruent to the product advertised. A research aimed at examining the perceptions of endorsement by Rashid & Nallamuthu 2002 (as cited in Balakrishnan & Kumar 2011, p. 99) suggested that engaging a renowned celebrity as an endorser instead of an anonymous endorser could assist companies in improving the ratings of the advertisement. But it doesn’t guarantee a change in consumer purchase intentions and attitudes. The reason behind this as explained by Baker & Churchill 1977 (as cited in Balakrishnan & Kumar 2011), is that celeb endorsement works more to effect the cognitive aspects of consumer attitudes rather than the behavioral aspects.

Hence, from the above given research evidences and academic literature, the importance of celebrity endorsement as a brand or company promoting tool has been established and it is safe to claim that, if utilized appropriately, celebrity endorsement advertising plans can serve better to create a desire among consumers to buy a brand as compared to non-celebrity advertising.

References

Amos, C., Holmes, G., Strutton, D., 2008. Exploring the relationship between celebrity endorser effects and advertising effectiveness. International journal of advertising, 27(2), pp. 209-234.

Balakrishnan, L. & Kumar, C.S., 2011. Effect of celebrity endorsed advertisement on the purchase attitudes of consumers towards durable products. World review of business research, 1(2), pp. 98-112.

Chung, K.Y.C., Derdenger, T. & Srinivasan, K., 2011. Economic Value of Celebrity Endorsement: Tiger Woods’ Impact on Sales of Nike Golf Balls.

Erdogan, B. Zafer, 1999. Celebrity Endorsement: A Literature Review. Journal of Marketing Management, 15(4), pp.291–314.

Al Zoubi, M.& Bataineh, M.T. 2011. The effects of using celebrities in advertising on the buying decision ‘empirical study on students in Jarash university’. American journal of scientific research, 13, pp. 59-70.

Jones, J.P., 1999. The advertising business: operations, creativity, media planning integrated communications. London: Sage Publications.

Greene, M., 2012. The Royal seal of success: From tea to perfume, holders of the Royal Warrant give a unique insight into the Queen’s personal tastes. Available at < http://www.dailymail.co.uk/femail/article-2149931/The-Royal-seal-success-From-tea-perfume-holders-Royal-Warrant-unique-insight-Queens-personal-tastes.html> [Accessed 2 June 2012].

Rovell, D., 2008. CNBC special report: swoosh! inside Nike. Available at < http://www.msnbc.msn.com/id/23071595/ns/business-cnbc_tv/t/cnbc-special-report-swoosh-inside-nike/#.T8nLsrUZS-U> [Accessed 2 June 2012].

Jain, V., 2011. Celebrity endorsement and its impact on sales: a research analysis carried out in India. Global journal of management and business research, 11(4), pp. 69-84.