Anna Rumschisky, a marketing professor at the IE Business School in Madrid, has demonstrated that using celebrities in advertising has a measurable impact on the prices companies can charge for their products. According to the study:
- Consumers are prepared to spend up to 20% more on the same product as a result of who is representing it.
- Celebrities can help focus and retain consumers’ attention on the advertising.
- Using a Celebrity improves the reception of the branding message, helping it to overcome the “noise” in the communications process.
- A famous personality brings with him a meaning that contributes clarity to the message. This approach saves advertisers time when it comes to conveying that message to the consumer.
- Other researchers in this area believe, that when consumers use products tied to famous personalities, they derive added value in terms of imaginative aspiration and entertainment. This can be enough to tilt the scale in favor of the brand rather than its competitors. The famous person becomes a model — a “standard” guiding the consumer, who wants to be and look like that person.
For men, famous people have a direct impact [based on their fame alone] of 8% on the price of the product, as well as an indirect impact [based on their personal attributes] of 11%. So the total value that the famous person contributes, among young men, is to raise the price [these men are willing to pay] by more than 19%.
Men believe that a product which is suitable as a gift is worth an additional price of 8.6%, and one that is fashionably attractive is worth an additional 7.6%. Nevertheless, when men identify themselves with the product or consider that the personality who advertises it is someone “modern,” there is a greater impact on price increases — 14.6% and 11.1%, respectively.
For women, the impact is not as great, but it is nevertheless significant: For watch prices, for example, the direct impact of the famous person is 5.4%. There is also an indirect impact of slightly more than 8%…. As a result, the total value that the famous person contributes among young women is to raise the price [that those women are willing to pay] by more than 13.4%.
Women raise their price by 4% when the product is suitable as a gift and by 6.2% when they think that the product makes them look stylish. The variable that has the most influence on women when it comes to increasing the price of the watch is whether they consider it to be “sexy”; that raises the price by 10.1%. There is less impact [on price] — only 5.8% — when women have confidence in the personality who advertises the product.
WHY CELEBRITIES WORK?
Most brands start a life without personality. Let’s be honest, a brand by itself will never walk, talk and get photographed. But by tying it with a celebrity, the name of a product or a company can take on instant glitz, glamour, charm, sex-appeal and aspiration.
Malcolm Gladwell states in his book, Tipping Point that The Law of the Few contends that before widespread popularity can be attained, a few key types of people must champion an idea, concept, or product before it can reach the tipping point. Gladwell describes these key types as Connectors, Mavens, and Salesmen. If individuals representing all three of these groups endorse and advocate a new idea, it is much more likely that it will tip into exponential success. Celebrities check off all types in one. “The success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts”.
- Connectors are the people in a community who know large numbers of people and who are in the habit of making introductions. They are essentially the social equivalent of a computer network hub. They usually know people across an array of social, cultural, professional, and economic circles, and make a habit of introducing people who work or live in different circles. They are people who “link us up with the world…people with a special gift for bringing the world together”.
- Mavens are “information specialists”, or “people we rely upon to connect us with new information”. They accumulate knowledge, especially about the marketplace, and know how to share it with others. “A Maven is someone who wants to solve other people’s problems, generally by solving his own”. Mavens are really information brokers, sharing and trading what they know
- Salesmen are “persuaders”, charismatic people with powerful negotiation skills. They tend to have an indefinable trait that goes beyond what they say, which makes others want to agree with them.
Celebrities are rare breeds that encompass the key traits of a Connector, Maven and Salesman all in one. Amplifying the efficiency and the potency of the marketing message being transmitted.
The benefits of Celebrity driven marketing, can be represented using – the four Qs:
- Quick saliency: It gets cut through because of the star and his attention getting value.
- Quick connect: There needs to be no insight but the communication connects because the star connects.
- Quick shorthand for brand values: The right star can actually amplify a brand message fast without elaborate story telling.
- Quick means of brand differentiation: In a category where no brand is using a Celebrity, the first that picks one up could use it to differentiate itself in the market.
TESTING ROI IN A CELEBRITY CAMPAIGN
There is no standard practice to measure ROI or gauge the direct effect of celebrity endorsement on the brand’s sales. However, some brands have a few parameters in place that help them judge consumers’ response to a celebrity. For example, the number of times consumers mention/tag the celebrity’s name along with the brand name on social media, etc. Some brands also conduct audits from time to time to justify the celebrity usage. At the end of the day, a brand manager has to pool in his/her experience and gut instinct to get this one right.
Most programs are impression-based, so tracking a solid ROI is possible, but tracking becomes more problematic in the gray area of branding. If a celebrity is utilized to increase brand awareness beyond impressions, then polling a core demographic after the celebrity engagement may give the business indications of a viable ROI. In general, most companies expect that not everything in a celebrity-centric deal can be evaluated using traditional metrics.
(NEXT MONTH: CELEBRITY ENDORSEMENT STRATEGIES)
KNOWLEDGE @ WHARTON
Celebrity Sells book
A Dummy’s Guide to Celebrity Endorsement
Havard Business School: The Economic Value of Celebrity Endorsements
Branding and Celebrity Endorsements
What are the benefits on the use of Celebrity Based Campaigns?
Can small business really afford Celebrity endorsements
Celebrity Marketing Myth
Celebrities in Marketing
Celebrity Power: Can less be more?
How Celebrities sell in China
Why Celebrity Sells: A Dual Entertainment Path Model of Brand Endorsement
Celebrity Endorsements builds Brands