Companies have various methods of creating convincing advertising campaigns. In this lesson, you will learn the benefits and drawbacks of choosing celebrity endorsements as an advertising method.

Celebrity Endorsement

Have you ever purchased a product because you knew a celebrity was also a user of the item? Maybe you bought a brand of lipstick because your favorite actress expressed in a commercial that it made her lips plumper? Or did you buy a pair of sneakers because you thought it would make you jump as high as the pro athlete pictured in the magazine ad? In this lesson, you will learn why companies use celebrity endorsements in advertising. A celebrity endorsement is when a famous person uses their notoriety to help sell a product or service.

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Jet-Air is the manufacturer and marketer of athletic shoes. They make good quality sneakers and have survived for over ten years in the competitive marketplace. Paige, their new marketing manager, is presenting her new advertising campaign to the CEO today. Let’s take a look at why Paige is recommending a celebrity endorsement for their new Jet-Air Rocket line of sneakers.

Benefits of Celebrity Endorsements

Paige has created a short presentation for the CEO that explains the benefits of using a celebrity endorsement for the new Jet-Air Rocket sneaker line. Paige has negotiated a deal with LeBarn Birkenstein, a top NBA basketball player, to appear in an integrated advertising campaign consisting of magazine, television, radio and social media advertisements. She hopes that the campaign can attract new customers and increase their market share.

Paige believes that there are many benefits to using a celebrity for their advertising campaign. The ability to build brand equity is a valuable asset. Jet-Air’s brand power is acquired through the name recognition, which allows the company to achieve larger sales and profits. To a consumer, brand equity creates product/brand differentiation over the other competitors in the market. Another benefit to celebrity endorsements is that it increases consumer’s remembrance of the ad. Paige showed her CEO studies that showed consumers are more apt to remember an ad that is linked with a celebrity endorsement. This can translate into a consumer search and purchase for the specific product, which can result in additional sales.

One of the strongest reasons for using a celebrity as a product endorsement is that it can link the product to the celebrity’s skills. For example, Paige knows that her target market of teenagers will want to purchase the new sneakers because they believe that wearing them will help their own basketball skills. This product transference of a celebrity skill works for any product. Even Paige herself buys clothing from a television star’s product line in order to look just as fabulous as the actress. Finally, Paige wants to use LeBarn in all advertising-related material to help the product stand out from competition. The CEO has his own concerns about using a celebrity to endorse their new sneaker line.

Risks of Celebrity Endorsement

The CEO is worried about using LeBarn Birkenstein as their celebrity spokesman because of the potential for public relations issues in the future for the star. This can occur when a celebrity’s public image changes due to a mistake that leads to negative perception from customers. For example, the CEO had a celebrity tennis pro as a spokesperson for their tennis sneakers that was arrested for destroying a vacation rental. Customers disliked her disregard for property and, in turn, also rejected the sneakers.

Another risk of using celebrity endorsements is the problem of overexposure, which can occur when a celebrity signs on to endorse too many products. Consumers grow tired of seeing the celebrity hawking multiple products and start to question their credibility. LeBarn has appeared in toothpaste, automobile, potato chip, hotel and even baby formula ads, which are a concern to the CEO. Lastly, celebrities can eclipse a brand so that the consumers focus on them instead of the actual product or service. For example, Paige could not remember any of LeBarn’s brands that the CEO mentioned in his example.

Lesson Summary

In the end, Paige was able to secure LeBarn as her celebrity spokesperson for the new sneakers. She was able to see the possible drawbacks to using a celebrity and is carefully monitoring the advertising campaign. Celebrity endorsement is when a famous person uses their notoriety to help sell a product or service. The benefits of using a celebrity for advertising are the ability to:

  • Build brand equity, meaning brand power is acquired through the name recognition, which allows the company to achieve larger sales and profits.
  • Increase the consumer’s remembrance of the ad.
  • Link the product to the celebrity’s skills.
  • Help the product stand out from competition.

In addition, there are some potential drawbacks of using a celebrity to endorse a product or service. They are:

  • The potential for public relations issues in the future for the star. This can occur when a celebrity’s public image changes due to a mistake that leads to negative perception from customers.
  • The issue of overexposure, which can occur when a celebrity signs on to endorse too many products. Consumers grow tired of seeing the celebrity hawking multiple products and start to question their credibility.
  • The ability that a celebrity can eclipse a brand so that the consumers focus on them instead of the actual product or service.

Learning Outcomes

As you learn more about celebrity endorsements in advertising, you could develop the capacity to:

  • Highlight the purpose of a celebrity endorsement
  • Emphasize the benefits and risks of celebrity endorsements in advertising