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Celebrity Endorsements

May 25, 2017

Companies around the world have been using celebrities to promote their brands for decades. Since then, that trend has consistently increased. However, companies are beginning to stray from traditional celebrity endorsements (think athlete on a Wheaties box) to anyone with a large social media following (insert any contestant from the Bachelor). With the growing influence of social media in the purchase cycle, companies are stepping up their endorsement game. Social media is a way for consumers, particularly younger ones, to engage and build intimate connections with the celebrities they follow, making it the ideal place for these celebrities to promote a company or a product.

 

Social Media Influencers

 

Social media influencers can really be anyone; celebrities, athletes, reality stars, bloggers, etc. Posts are considered a celebrity endorsement when the company pays someone to advertise their product. A majority of millennials value endorsements from influencers that they consider peers or feel a personal connection to. Influencers are able to easily target them without interrupting the flow of their newsfeeds. They find subtle ways to incorporate the brand or product they are being paid to advertise.

 

The Impact

 

People idolize celebrities, so when famous people are seen in ads promoting a new product, audiences are more likely to buy that product. Just one endorsement can cause on average about a 4% increase in sales. A company stocks can rise up to .25% as soon as the news breaks on an endorsement.

 

Celebrity endorsements also add value and an element of legitimacy to the brand. Using a celebrity that people already have positive feelings and impulses towards, attracts the audience’s attention more than a standard ad would. However, the first step in celebrity endorsements is choosing the right one. The product and the celebrity need to be the right fit. You wouldn’t have LeBron James promoting woman’s shampoo, just like you wouldn’t have Jennifer Aniston promoting a new lawn mower. If the celebrity’s fan base doesn’t fit with the audience you’re planning to target, it’s not a match made in advertising heaven.

 

 

When celebrities utilize their own social media channels, it creates a unique and personal connection to fans and followers. Social media provides us access into lives of celebrities, meaning we now have around the clock footage of what brands our favorite athletes, models, and actors are using. This also has the power to make these endorsements seem all the more believable.

 

However, there is risk involved with celebrity endorsements. For starters, it is not always as effective as we hope. Consumers see more than 3,000 commercial images a day, absorb around 150 of those images, and only about 30 leave an impression. That’s a lot of advertisements for one person to take in! Not to mention, sometimes celebrities get caught in sticky situations. This inevitably causes the consumers to make a direct correlation with the brands they represent. You may remember Tiger Woods and Michael Vick.

 

The Rules

 

As companies continue to use social media platforms as a marketing tool, their brand awareness isn’t the only thing on the up rise. Continuously using the same celebrity to endorse a brand can be a costly endeavor. Depending on the celebrity and company, these contracts can involve up to seven figures. Yes, you read that correctly, SEVEN FIGURES for a single Instagram post! Hello, sign us up! The Federal Trade Commission has since been taking notice of these influencers. Just last week, the FTC sent 90 letters to various influencers educating them on its advertising disclosure requirements. The agency warned that common disclosure tactics such as #sp or putting a “sponsored” label near the bottom of a post are not sufficient. Influencers need to clearly and conspicuously disclose their relationships to brands. Sometimes the art of subtlety isn’t always appreciated.

 

The Local Celebrity

 

More than likely it’s not in every company’s budget to sponsor a seven figure Instagram ad, but the idea of a celebrity endorsement doesn’t have to be quite that costly. It doesn’t even have to include an A-lister recognized all over the country! Utilizing the local celebrity in your area can be just as beneficial for your brand or products. Reaching out to your local radio or TV host that you know uses your product, can be an extremely effective way to get the word out. Having well known radio hosts talk about their involvement with your products on air or having a news anchor appear in an ad allows you to put a locally recognized name to your brand. And we’re pretty confident when we say that will cost a whole lot less than recruiting LeBron James or Jennifer Aniston!

 

While the idea of celebrities endorsing products has evolved well beyond a face on a cereal box, the strategy is still a good one. People want to live the life of their favorite celebrities, meaning they want to use the same products as their celebrities. So think don’t be surprised if you think twice about who promotes the shampoos you use, because those ads probably had more of an influence on you than you realized.

 

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