FREQUENTLY ASKED QUESTIONS

CELEBRITY DRIVEN MARKETING

1.OVERVIEW

The modern world has shaped the advertising age of celebrity culture, in which marketing is adopting celebrities. Advertising is now being replaced by PR with prominent use of fame. Fame over the years has become a powerful marketing tool embedded within today’s society, adding desire to products with the use of celebrity endorsements. The celebrity-obsessed culture of today has allowed brands to achieve massive demand and worldwide exposure. New brands launching have used generated PR in order to become successful rather than the past use of advertising.

2.BRAND AMBASSADOR & CELEBRITY ENDORSER. WHAT IS THE DIFFERENCE?

Although the two terms are commonly used interchangeably, there is a difference between them:

• A celebrity endorser promotes the brand on media channels as a job; the endorser’s role is to advocate the brand in return for monetary compensation. An endorser, is always a known face, who has been hired to be the ‘face of the brand’ for a fixed period of time.

• An ambassador serves a larger strategic purpose; almost like going to a ‘higher level’ in a video game – it’s difficult to achieve, not everyone gets there and the ones who do earn bragging rights and enjoy a good position. A brand ambassador need not be a celebrity. A company spokesperson, a customer or domain expert may well an ambassador.

Unlike endorsers, ambassadors believe in the brand and go beyond merely persuading people to use it; they themselves use the brand in their own personal lives and not simply because they are paid for it. So in that sense, every loyal consumer of a given brand is, by default, an ambassador or ‘evangelist’.

3.A POTENT MARKETING TOOL

Top marketing directors were asked their opinions on campaigns involving Celebrities. They said:

• “Celebrity endorsement increases the attention paid to an ad”.

• “Celebrities are generally attractive, which helps persuasion when consumers are worried about social acceptance and others’ opinions or when the product is attractiveness”.

• “Celebrities may be credible sources if they have expertise in a particular area, such as an athlete endorsing or a beautiful model endorsing make-up”.

• “Celebrities are often well-liked, possibly leading to identification and consumer persuasion in an attempt to seek some type of relationship with the celebrity”.

• “Our analysis showed that the ads featuring the celebrity performed better on key measures than those without the celebrity. The celebrity had also become a strong branding device. We were able to estimate that the Celebrity was worth over $5 million per year to the client. Since the contract cost considerably less than this, the client continued the relationship”.

4.BENEFITS OF CELEBRITY MARKETING

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.

MEN

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.

WOMEN

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.

5.WHY CELEBRITY MARKETING WORKS?

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.

Malcom 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”.

The benefits of Celebrity driven marketing, can be represented using – the four Qs:

1. Quick saliency: It gets cut through because of the star and his attention getting value.

2. Quick connect: There needs to be no insight but the communication connects because the star connects.

3. Quick shorthand for brand values: The right star can actually amplify a brand message fast without elaborate story telling.

4. 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.

6.MARKETING DIRECTOR'S INSIGHTS

Top marketing directors were asked their opinions on campaigns involving Celebrities. They said:

• “Celebrity endorsement increases the attention paid to an ad”.

• “Celebrities are generally attractive, which helps persuasion when consumers are worried about social acceptance and others’ opinions or when the product is attractiveness”.

• “Celebrities may be credible sources if they have expertise in a particular area, such as an athlete endorsing or a beautiful model endorsing make-up”.

• “Celebrities are often well-liked, possibly leading to identification and consumer persuasion in an attempt to seek some type of relationship with the celebrity”.

• “Our analysis showed that the ads featuring the celebrity performed better on key measures than those without the celebrity. The celebrity had also become a strong branding device. We were able to estimate that the Celebrity was worth over $5 million per year to the client. Since the contract cost considerably less than this, the client continued the relationship”.

7.WHAT IS THE LUMENERE INDEX (TLI)?

THE LUMENERE INDEX (TLI) is a systematic research and grading process that summarizes various perceptions and feelings that consumers have in the form of likeability measurements. This index evaluates the worth of celebrities through a systematic and controlled method that resembles financial brand valuation and forecasting. There is a great deal of science involved in picking-up a brand ambassador and it cannot function without that.

Through country specific research & focus groups, we provide an overview score of a Celebrity’s key traits and likability in the areas of:
1. Appeal
2. Recognition
3. Trend setting
4. Influence
5. Trust
6. Credibility
7. Aspiration
8. Awareness

8.CAMPAIGN ROI (SAMPLES)

• Pringle (2004) has reported a high rate-of-return (27 times its costs) for this strategy. In the UK, Barclaycard used the popular comedian

• Rowan Atkinson during the 1990s in a highly successful campaign for Barclay’s. It was hugely enjoyed and well recalled, and it communicated the intended messages. Barclay’s share of new cardholders rose from 15 percent to 25 percent in five years.

• Jamie Oliver for Sainsbury’s: ROI of 27:1, £1.12 billion in incremental revenue.

• Ian Wright/Martin Luther King/Kate Moss/Elvis/John McCarthy/Yuri Gagarin for One2One: ROI of 5.4:1, £199 million in incremental revenue.

• The Simpsons for Domino’s Pizza: ROI of 5.3; incremental revenue of £13 million.

• Martin Clunes, Caroline Quentin, Jonah Lomu, Caprice, Jonathan Ross for Pizza Hut: ROI of 3:1; incremental revenue of £55 million.

The most recent and interesting use of celebrity figures to drive significant and escalating sales is the use of musician Rihanna for Puma. This is Puma’s latest effort to polish up its brand image and ultimately boost sales. The use of Rihanna is the brands strategy in renewing the brand, taking up as Creative Director as well as serving as the brand’s global ambassador.

Within minuets of Rihanna posting photos on her instagram account the images has gone viral, with thanks to a boastful following of 38.4million followers on Twitter and 14million on Instagram it is no surprise. Overseeing the companies women’s line Puma is sure to profit as the musician has previously partnered with High street retailer River island as well as MAC cosmetics brand both of which benefitted from the PR value with the use of Rihanna’s celebrity status. The use of Rihanna works perfectly as a PR tool to introduce Puma’s transformation to reposition itself as a lifestyle brand not only a sports brand.

9.PSYCHOLOGICAL SCIENCE BEHIND CELEBRITY MARKETING

The Psychological Science behind Celebrity Marketing
Classical conditioning is a psychological concept based on experiments conducted by Ivan Pavlov in the early 1900s. Pavlov was examining the salivation rates of dogs in his laboratory, and noticed that when the dogs saw food, they began to salivate more.
As the experiment progressed, Pavlov would ring a bell before dinner to condition the dogs to understand that a dinner bell meant food was on its way. Soon, Pavlov discovered that even if food wasn’t present, when he rung the bell, salivation rates would increase.
Pavlov discovered that the dogs created an association between the ringing of the bell and food. While most advertisers aren’t marketing their products to dogs exactly, this process of associative learning is important to understand why consumers create associations between celebrities and brands.

According to “Classical Conditioning and Celebrity Endorsers: An Examination of Belongingness and Resistance to Extinction,” by researchers Brian Till and others, there are three major psychological concepts considered when creating celebrity endorsement campaigns:

• An Unconditioned Stimulus: A stimulus that automatically and naturally produces a response
• A Conditioned Stimulus: A neutral stimulus that does not naturally produce a response
• A Conditioned Response: A response created when pairing the unconditioned and conditioned stimuli together.

So, when a celebrity (unconditioned stimulus) endorses a brand (conditioned stimulus), it creates a (hopefully) positive response about that brand (conditioned response).

For example, when Jennifer Aniston endorses a perfume, people consider the qualities of Jennifer Aniston with the perfume. Aniston is considered one of the sexiest women on the planet, powerful, and likeable. If Aniston is endorsing a perfume, women (who view Aniston as a likeable, strong, attractive personality) in turn attribute those qualities to the perfume.

10.MEASURING CELEBRITY FIT

Marketers use the acronym FRED to evaluate the strengths and weaknesses of potential marketing campaigns. The same tools are used to evaluate celebrity spokesmen. Here is how it works.

• Familiarity – The more familiar a celebrity is to the widest possible segment of the population, the more affective their ads will be. Relatively unknown celebrities are only used to market niche products and speak to very specific demographics.

• Relevance – Marketers strive to create the greatest fit between a product and its celebrity endorser. The celebrity chosen must be seen in the eyes of the public as linked to the product they endorse. The greater the link, the more customers will trust the message being delivered.

• Esteem – The more esteem that a celebrity endorser has, the more that esteem will transfer over to the product they are endorsing. Celebrity marketing is about associating a famous person’s reputation with a product. The better their reputation, the better the product appears.

• Differentiation – The advertising market is fierce and it can be difficult to differentiate similar products from each other. Advertisers are always trying to find a message or an image that makes their product seem unique when compared to competitors. Having an esoteric or unexpected celebrity spokesman can be a great way to stand out from the crowd.

11.MEASURING CAMPAIGN SUCCESS (KPI)

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.

Performance metrics you can use when evaluating an influencer marketing campaign:
1. Impressions
This measures the number of times a Celebrity’s post is viewed. Impressions are one of the indicators of the effectiveness of branding campaigns.
2. Engagements
Although impressions are the standard way to buy advertising inventory, engagements — through a like, comment, or share — provide deeper insight into the effectiveness of the influencer’s post.
3. Conversions
Although Celebrity Driven Marketing is often regarded as a branding strategy, savvy performance marketers are quickly realizing its power to drive sales, press coverage and brand credibility.

4. Mentions
Overall mentions of a campaign over social media and press.

5. Investment
The investment metric is the pre-campaign cost of researching which Celebrities are right for your brand and budget; how much it costs to set the program up; and using that as a barometer against how much return (financial or awareness) you experienced.
6. Sentiment
Every marketing campaign, whether online or offline, succeeds primarily for one main reason – the perception of that campaign and the buy-in of the audience.
Using the same metrics to measure your Celebrity campaign will allow you to understand the sentiment around the brand message, and how the target audience perceives both your brand and the campaign itself. It also allows you to quickly identify areas that upset a certain demographic and amend the message accordingly, or instigate a crisis communication response if needed.

12.OUR CELEBRITY MARKETING STRATEGY

Successful brands need to convince consumers that they carry a different image and value from other competing products. Today, the use of celebrity advertising for companies has become a trend and a perceived winning formula of corporate image building and product marketing. This phenomenon is reflected by the recent market research findings that 8 out of 10 TV commercials scoring the highest recall are those with Celebrities’ appearances.

Finding the right celebrity ally is as much art as science. The biggest, most familiar names may lend cachet, but they carry a hefty price tag. The character of the trendiest new star is often untested and may prove to be a liability

This study reveals and re-establishes that corporate must always keep in mind that the objective is to build the brand and not the celebrity. As companies invest large sums of money in celebrity endorsement contracts, any celebrity endorsement relationship must contribute to larger marketing strategies. Accordingly, campaigns involving celebrities are believed to bring more positive results if they are properly integrated than traditional non-integrated campaigns.

Studies on Celebrity worship reveal, consumers form parasocial bonds with favored celebrities who shape their lifestyles, attitudes, and behaviors. Driven by the need for achievement and lifetime pursuit, consumer’s aspire to mimic Celebrities as well as live the successful and glamorous lifestyles portrayed in the media. Consumers who desire to be the likes of the celebrities gratify their urges through sub-conscious efforts to build and maintain a relationship with the celebrity. Marketers focus on this.

13.IS CELEBRITY MARKETING A TOOL OR THE WHOLE CAMPAIGN?

Celebrity endorsements cannot replace the comprehensive brand building processes. As branding evolves as a discipline companies must be extra cautious to utilize every possible channel of communication rather than solely just Celebrity endorsement.

• When all other steps in the branding process is followed and implemented, then channels such as celebrity endorsements can provide the cutting edge as it did for Nike endorsement romance with Tiger woods. What Nike did was to use celebrity endorsement as one of the main channels of communicating its brand to a highly focused set of customers. So, Nike’s association with Tiger Woods was one of the parts of an entire branding process that Nike has been practicing consistently.

14.RESEARCH SOURCES

KNOWLEDGE @ WHARTON
https://knowledge.wharton.upenn.edu/article/celebrity-advertising-what-is-the-roi/

Celebrity Sells book
http://www.ipa.co.uk/Framework/ContentDisplay.aspx?id=2196

A Dummy’s Guide to Celebrity Endorsement
http://www.afaqs.com/news/story/39588_A-Dummys-Guide-to-Celebrity-Endorsement

Havard Business School: The Economic Value of Celebrity Endorsements
http://www.people.hbs.edu/aelberse/publications/Elberse_Verleun_2012.pdf

Branding and Celebrity Endorsements
http://www.venturerepublic.com/resources/branding_celebrities_brand_endorsements_brand_leadership.asp

What are the benefits on the use of Celebrity Based Campaigns?
http://www.millwardbrown.com/docs/default-source/insight-documents/knowledge-points/MillwardBrown_KnowledgePoint_Celebrity-basedCampaigns.pdf

Can small business really afford Celebrity endorsements
http://www.forbes.com/sites/work-in-progress/2013/09/17/can-small-businesses-really-afford-celebrity-endorsements/

Celebrity Marketing Myth
http://www.brandchannel.com/images/papers/522_2011-01_celebrity_marketing_myth.pdf

Celebrities in Marketing
http://johnmichaelmorgan.com/how-to-use-celebrities-in-your-marketing/

Celebrity Power: Can less be more?
http://www.millwardbrown.com/docs/default-source/insight-documents/points-of-view/MillwardBrown_POV_CelebrityPower.pdf

How Celebrities sell in China
http://www.businessoffashion.com/2015/01/op-ed-celebrity-sells-china.html

Why Celebrity Sells: A Dual Entertainment Path Model of Brand Endorsement
http://www.coms.hkbu.edu.hk/~kineta/files/JA_Entertainment_Aug20_2013_Final.pdf

Celebrity Endorsements
http://usdrinc.com/downloads/Celebrity-Endorsements.pdf

Celebrity Endorsements builds Brands
http://www.marketwired.com/press-release/research-shows-celebrity-endorsements-build-brands-and-boost-direct-response-online-1238525.htm

Marketing with Celebrities
http://www.marketing-schools.org/consumer-psychology/marketing-with-celebrities.html

The Rise Influencer Marketing
http://traackr.com/why-invest-influencer-marketing/

Measuring Impact of Celebrity Endorsements
https://www.questia.com/library/journal/1G1-344154938/measuring-the-impact-of-celebrity-endorsement-on-consumer

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