The Decline of Celebrity Brand Endorsements

Photo by Peretzb

Celebrities are cool. Celebrities are recognizable. Celebrities are dumpster fires just waiting to happen. 

 

Americans are obsessed with fame. How else do you explain American Idol, The National Inquirer, TMZ, and Celebrity Apprentice? The fact that the city of Los Angeles is what it is today is proof enough.

 

A recent AdWeek article noted that celebrity endorsements are down 9% since a high of 19% in 2004. They quote a former General Motors vice-chairman as saying, "There are more effective ways of communicating with the consumer without using celebrities, with really great creative." He was also quoted as saying, "I’m not sure anyone really believed that Tiger Woods drove a Buick." 

 

Red Lobster used a similar brand tactic by using real cooks and servers in their ads. The reason was they were trying to be more "authentic."

 

That thinking is just plain wrong. Unless you are a local brand with real personality that people know and trust, this is NOT the way to go. Fundamentally, I see 3 problems with this thinking.

 

Problem #1: It's All About the Benjamins

I believe the biggest factor for the shift of brand marketing dollars away from celebrities as brand spokespeople is cost. We are currently in a recession. If I were CEO of a huge, public company, how could I justify paying Tiger Woods millions of dollars a year to appear in 30 second spots while at the same time cutting my workforce by thousands and taking bail-out money from the government?

 

I couldn't.

 

Cutting costs is the only way to get through the recession for GM, and that includes cutting the use of celebrities in the ads. Which is something they obviously don't believe in because Buick is now getting Shaq to drive their cars.

 

Problem #2: Celebrities are Trendsetters

Celebrities have been selling product for hundreds of years. Buffalo Bill Cody and Annie Oakley sold tickets to Buffalo Bill's Wild West. Mickey Mantle and countless other athletes sold cigarettes in the 50s. Mean Joe Greene sold Coca-Cola in a Super Bowl spot so effective that is STILL being parodied today. Tom Cruise sold Ray-Ban's (unofficially), not once but twice, first in Risky Business and then again in Top Gun. More recently, the Duchess of Cambridge is making designers across London both well-known and wealthy.

 

Celebrity is an addiction. People want to be movie stars, performers, and athletes. People may not be able to reach those levels of fame, but they can still buy the dress or wear the sunglasses. 

 

Problem #3: Lowered Expectations, Lowered Profits

I expect certain things from the brands I hold in high regard. I expect a celebrity to wear a Tag Heuer watch. How else does I know that Tag Heuer is a luxury brand worthy of commanding the price tag that it does? I really have no idea what makes a Tag Heuer worth more than a Timex other than my brand perception.

 

I'm reminded of the analogy on the cover of "Building the Brand-Driven Business." On it, appears a plain black t-shirt with no label. The only thing that gives the 100% cotton tee value and turns it into a $50 shirt instead of a $5 shirt is the brand behind it. In fashion, celebrities most certainly influence the buyers of their clothing.

 

As long as Americans are fascinated with celebrity, there is a place for celebrity endorsements. These costs are not only justified, but in many industries necessary.