One of the oldest brand strategies is celebrity endorsement. Brands are always seeking validation in one form or another, and often the easiest and most compelling way is to have someone famous eat, wear, drive, walk in or just say something nice about your brand.
Think of the celebrity athletes who built Wheaties as the Breakfast of Champions. Catherine Zeta Jones for T-Mobile. Fabio for I Can’t Believe It’s Not Butter. Michael Jordan for Nike and Hanes.
But it’s also one of the riskiest moves, because celebrities are people, too. And people tend to make mistakes.
The latest example of this is the one the press has been talking about for the last week: Ryan Lochte and company. These four gifted swimmers embarrassed themselves, their US Olympic Teammates and a nation outside of the games in Brazil. No need to go into the details here; we’re all too familiar with them now. For Lochte, the bar tab for his night of carousing, misleading law enforcement and the world is an estimated $1 million in endorsement deals with Ralph Lauren, Speedo and Airweave, according to ESPN. His behavior is a reminder of why every endorsement contract has what is know as a “morals clause.”
But for all the media preoccupation with this recent sad tale of celebrity-athlete-stumble, it’s hardly the first and won’t be the last. In fact, with everyone’s collective indignation, it seems a bit incredulous; especially when you consider the track record (and sometimes severity) of endorsements that have gone sour.
Consider these notables from the past 25 years:
Madonna dropped from Pepsi in 1989 for an R-rated music video.
O.J. Simpson dropped from Hertz in 1992 for domestic abuse allegations. Two years later, he was arrested for murder.
Mike Tyson lost deals in the 90’s with Pepsi, Kodak and Nintendo for domestic abuse allegations and a rape conviction.
Ludacris cut from Pepsi in 2002 for controversial lyrics.
Kobe Bryant fired from McDonalds because of rape accusations in 2004.
Kate Moss dismissed from Burberry, Chanel and H&M for photos of her snorting cocaine in 2005.
Michael Vick in 2007 for dog fighting and abuse. Nike, Rawlings and AirTran Airways cut their ties.
Barry Bonds dropped by MasterCard, KFC and Charles Schwab for alleged steroid use – costing him an estimated $28 million a year in contracts.
Kirstie Alley lost her endorsement deal with Jenny Craig in 2008 for weight gains.
Sharon Stone dropped from Christian Dior in 2008 for insensitive remarks following an earthquake in China.
Michael Phelps lost brand endorsements from AT&T and had a non-contract renewal with Rosetta Stone and Kellogs in 2009 for smoking pot.
Tiger Woods dropped in 2009 from Accenture and Gatorade for infidelity.
Lance Armstrong out in 2012 for doping from Nike, Anheuser-Busch InBev and others.
Oscar Pistorius lost Oakley, Nike, Clarins and BT endorsements in 2013 for homicide arrest.
Paula Deen lost her endorsement deals and her nationally televised cooking show in 2013 because of an alleged racial slur.
Bill Cosby dropped in 2014 from Jell-O, Coke and others due to rape allegations.
To put the Ryan Lochte endorsement saga in perspective, many of these listed here, and others, are far more serious and costly than his escapades in Rio. Others, it can be argued, are a case of skittishness on the part of brand management too quick to pull the trigger. But in every case, the damage is real, both to the celebrity and to the brand.
When people say, “what a celebrity does in their private life makes no difference regarding the brand they endorse,” research says otherwise. Just as brand association with the celebrity hero can create a “halo effect,” it can also tarnish the brand. And in a highly competitive marketplace where a share point can translate into millions of dollars, the risk of damage is too great.
People will also say, “you just need to vet the celebrity more thoroughly” or “you need to be more selective in choosing the celebrity.” Is there anyone reading this that would have predicted the trouble Bill Cosby found himself in? Didn’t think so. The point is that there is just no predicting human behavior with certainty, be it past, present or future.
And for CMOs, marketing VPs or brand managers, there’s more to deal with than the temporary embarrassment of the news cycle. There’s the residual online media pile up of news stories, blog posts, video clips, op-eds, Facebook and Twitter feeds that will menace the brand’s reputation for weeks, months and even years. Pushing all that down off page one of Google where 80% of all searches are performed and stop may be too daunting a task. Google’s suggested remedy – change your name.
And of course the typical public repudiation by the brand for the endorser’s bad behavior can actually hurt the brand as well by making it sound so “saintly.” Ironically, this is often the opposite of the brand image it was trying to convey by hiring the endorser in the first place.
Frankly, if brand meaning is aligned, it is much easier and safer to license a deceased celebrity, brought back to life through CG technology, as in Fred Astaire dancing in a Dirt Devil TV spot or Audrey Hepburn for Dove/Galaxy chocolate.
It is estimated that in 1975 one in eight network TV spots featured a celebrity endorser, but today, there’s a steady decline in the practice. Part of it is due to the nature of media fragmentation and a general cynicism and distrust. However, the endorsement news is not all dark. Consider the long-term success of George Foreman and his grill. William Shatner for Priceline and Jennifer Aniston for Aveeno. When brands and celebrities unite with the absence of harmful behavior wonderful things happen.
For those brands looking for celebrity endorsements to bolster the meaning they represent, Branding Strategy Insider’s Martin Roll says to evaluate the celebrity with these important aspects in mind:
1. Attractiveness Of The Celebrity: This principle states that an attractive endorser will have a positive impact on the endorsement. The endorser should be attractive to the target audience in certain aspects like physical appearance, intellectual capabilities, athletic competence, and lifestyle. It has been proven that an endorser that appears attractive as defined above has a greater chance of enhancing the memory of the brand that he/she endorses.
2. Credibility Of The Celebrity: This principle states that for any brand-celebrity collaboration to be successful, the personal credibility of the celebrity is crucial. Credibility is defined here as the celebrities’ perceived expertise and trustworthiness. As celebrity endorsements act as an external cue that enable consumers to sift through the tremendous brand clutter in the market, the credibility factor/authenticity of the celebrity greatly influences the acceptance with consumers.
3. Meaning Transfer Between The Celebrity And The Brand: This principle states that the success of the brand-celebrity collaboration heavily depends on the compatibility between the brand and the celebrity in terms of identity, personality, positioning in the market vis-à-vis competitors, and lifestyle/behavior. When a brand signs on a celebrity, these are some of the compatibility factors that have to exist for the brand to leverage the maximum from that collaboration.
Written by Paul Friederichsen at Branding Strategy Insider