Celebrity endorsements – The flip side and the consequences
By
Prof R. N. Yashoda Krishna
AdjunctFaculty
Symbiosis Institute of Management Studies(SIMS)
Range Hills Road, Pune – 411020
Tel:- (020) 30213200, (0) 9158023773
Prof Karthik V
Faculty- Marketing
Christ University
Lavasa, Pune
08793904996
Celebrity endorsements – The flip side and the consequences
Abstract:
Marketers in their indefatigable and consistent efforts to thwart competition from barging in to
their territory have been innovating and experimenting with different promotional activities
towards maintaining their leadership positions. Celebrity endorsement has been one such primary
activity which markets have been in to since many decades and it has always given them worth
for every dime that they have spent. The history of celebrity of celebrity endorsement which
even dates back to the previous century has always been seen as a positive affiliation by
customers in associating with brands and in turn has yielded the expected resulted in terms of
brand loyalty and product purchase. So more often companies have always believe the fact that
“any publicity is good publicity” and have been actively involved in making celebrities as their
brand ambassadors and found a rationale in the huge sums of money being spent on them. But
the irony is that there are situations arise when there is also a flip side to the coin, when the same
celebrity endorsement turns in to a nightmare situation for the brand because o the action of the
celebrity or even the celebrity themselves. In such situations the same customers who would
associate the ‘good things’ of the celebrities with the brand will obviously be happy to associate
the ‘bad things’ of the celebrities with the brand too and this leads to a negative publicity which
takes a longer time for the companies to get over with. This researcher paper will analyze some
of the classic cases which have happened in the business world due to negative effects of
celebrity endorsements and the consequences of it to the companies.
Key words: Celebrity Endorsements, publicity, negative, effects, consequences
Introduction:
The ultimate goal of any organization for its existence is business is to generate revenue and to
earn profits through maximizing the sales volumes and in order to achieve these objectives
organizations perform various many clustered and interrelated activities which can act in unison
as well as separately as enhancers in achieving these goals. The most important of these activities
is promotion which calls for the communication and information about the products services and
most importantly the positioning that the company’s brand stands for in the market for its
customers. Advertising the most critical component of promotions is the key tool, which
enhances the organization to reach its target audience in huge number in order to make this
happen in an efficient and an effective way. A focuses and creatively crafted message is
delivered among the target customers who is expected to create a lasting impact on the customers
as the companies would want them to me. These calls for a powerful medium which can make
that impact more powerful. ‘Celebrities’ whom the common man always looks upon as ideals is
always the best person to perform this flawlessly. They are the people who are enjoying high
public recognition mainly by virtue of certain distinctive characteristics possessed by them which
are very much attractive to people (Tripp et al, 2004). An individual who enjoys any form of a
public recognition and also who is using the recognition on behalf of any consumer good by
presenting it in any form of promotion usually an advertisement is called as a celebrity
endorsement (McCrackern,1989). When the endorsers are being used to promote the products
and services it often acts as a source of great potential to manage brand equity as they are able to
influence the customers and the degree of persuasiveness improves with their efforts. When a
celebrity is being used appropriately by a brand they can act in a valuable role in developing the
brand equity and also enhancing the brand’s competitive position (Till, 1998). Endorsers apart
from these benefits can also be used as a means of grabbing attention and penetrating
commercial clutter (Kaikari (1987): Micial &Shanklin (1994).
But contrary to these beliefs the recent issues that companies are facing because of negative
publicity that they have been facing and the backlashes as consequences of it because of it have
made to rethink the effect of celebrity endorsements. The case of snap deal where the company
faced the wrath of customer in the name of #AAPWAPSI by deleting the smart phone app of
Snapdeal which they did in protest of Actor Aamir Khan and his views on growing intolerance in
India has been taunting the brand image of Snapdeal which he has been promoting actively for
the recent past. The same backlash is also being faced by brand such as Godrej and Coca-Cola
which he is a brand ambassador are losing big time customer credibility and base for which they
have in fact hired him to be their endorser. Similar incidents are not new as there has been many
cases where celebrity’s personal actions or values or themselves have been not liked by
customers and have resulted being companies being put in a fix and the negative side of celebrity
endorsement have taunted them and the consequences have had far reaching side effects.
This research paper is an attempt to analyze various negative aspects of celebrity endorsements
which have been die to various scandals and celebrity related issues and the consequences of
them and by using secondary data collected from various sources an effort is made to find out the
efforts and long term consequences as well as the flip side of celebrity endorsements.
Celebrity Endorsements:
Even though celebrity endorsement is not a new phenomenon today it is has become one of the
most popular forms of advertising which includes both the profit and non-profit sector (Choi &
Rifon, 2007; de los Salmones, Dominguez, & Herrero, 2013). Celebrity endorsement and its
popularity is ever increasing due to its numerous benefits its offers in using this form of
advertising as it acts as a solution to solve the clutter which is prevalent in the advertising
environment because of which companies are facing difficulties in grabbing customer’s
undivided attention and use celebrities as a means to solve this. Celebrities are the best bet to
gather attention of customers thereby creating a mileage for them and providing a chance of
communicating the intended message in a clear and precise manner to the target customers
(Erdogan, Baker, & Tagg, 2001; Kamins, Brand, Hoeke, & Moe, 1989). Grabbing attention is
one aspect of using a celebrity endorsement rather remembering the message in the
advertisement campaign and the brand name is the most critical aspect that a celebrity can give
company leverage with (Agrawal & Kamakura, 1995; Erdogan, 1999; Freidman & Friedman,
1979; Misra & Beatty, 1990).
In fact celebrities are able to create a distinctive image to the advertisement thereby linking their
personal images to the brands that they endorse and create a medium where in the brand’s image
can be enhanced , changed and improved (Erdogan, 1999). Whenever there is a brand associated
with a celebrity the image of the celebrity gets associated with the image of the brand positively
(Agarwal and Kamakura, 1995).
Researchers and their research findings have been equivocal about the ability of the celebrities to
generate actual buyer behaviour; also a positive impact on the economic returns of sponsoring
companies is being well documented in academic literature (Agarwal & Kamakura, 1995;
Chung, Derdenger, & Srinivasan, 2013; Elberse & Verleun, 2012; Mathur, Mathur, & Rangan,
1997). The attitude towards advertising and endorsed brand, the intentions to purchase and actual
sales are some of the desirable outcomes which are being expected in preferring celebrity
endorses over non- celebrities as and when companies use them in order to establish a public
persona match of them with their products and services (Erdogan, 1999).
Ongoing research studies in the field of celebrity endorsement have been instrumental in
understanding the process by which celebrities add values to the company, brand or product.
Researchers have attempted to construct many models to explain the process of celebrity
endorsement. Some of the most important models are
Source credibility model
Source attractiveness model
Product match-up hypothesis
Meanings transfer model
Social Influence Theory / Source Effect theory which argues that various characteristics of a
perceived communication source may have a beneficial effect on message receptivity (Erdogan,
1999), is the base upon which the Source Credibility Model and the Source Attractiveness Model
are being built upon. The effectiveness of a message depends on the perceived level of expertise
and trustworthiness in an endorser which the customers look for, and this is what is what the
source credibility model proposes (Ohanian, 1991). On the other hand the source attractiveness
model is all about the fact that the effectiveness of a message is wholly dependent on the
similarity, familiarity and liking for an endorser (McGuire, 1985).
Researchers are of the view that only the source models cannot completely explain the concept
of celebrity endorsement holistically. There is should be a matchup between the celebrity and the
brand as well as the brand image and the image of the celebrity image. This leads to the product
match up hypothesis which maintains that it is imperative that for an advertising message to be
efficient there has to be congruence between the celebrity image and the product message
(Kamins & Gupta, 1994). The degree perceived fit between brand and celebrity image
determines the match between the celebrity and the brand being endorsed, which leads to the
conclusion that a brand which is being endorsed by using a celebrity who has a high product
congruent image leads to greater advertiser and celebrity believability than one with a less
congruent case.
There are also advocacies existing which state that neither the source models nor the product
match- up hypothesis is sufficient to provide a heuristic for appropriate celebrity endorser
selection (DeSarbo and Harshman (1985). Even though not accepted by all the product match-
up hypothesis has emerged as the most dominant paradigm in celebrity endorsement literature
focusing majorly on the role of congruence between product/brand and celebrity as a critical
component for celebrity endorsement (Carrillat, d'Astous, & Lazure, 2013; Fleck, Korchia, & Le
Roy, 2012; Gurel-Atay & Kahle, 2010; Lee & Thorson, 2008). Not always customers look at
products they purchase as “bundles of utility” as the economists proclaim, rather they also look
at products as quantifying various attributes such as honesty, frugality, sophistication,
courageousness and most importantly as “ bundles of meaning” as a means to establish their self
identity. And that is what companies attempt is to label their products with different meanings by
linking their products with celebrities who carry the meanings they desire. During celebrity
endorsement, consumers have a perceived image about any celebrity endorser, and this image
affect is transferred to the endorsed brand (Atkin and Block, 1983).
The meanings transference model explains this transference of image wherein the celebrities
develop a persona through the type of role that they in the society as well as how are they are
being portrayed in the media (McCracken, 1989). What the society then performs an action is
that it just assigns meanings to the celebrities there by the meanings which are developed around
the particular celebrity gets transferred to a company, brand or the product that they endorse. The
customers who buys the brand believes to the fact that they indeed are claiming the transferred
meanings for themselves and their own lives. The distinguishing feature in terms of personality
and lifestyle meaning brought to an endorsement process is where lies the effectiveness of an
celebrity endorser in comparison to a non-celebrity (McCracken, 1989).
Negative publicity of the endorsers
There have been many studies pertaining to the effect that celebrity endorsers can have on
consumer’s attitudes towards the brands or the advertisements (e.g. Atkin and Block, 1983;
Freiden, 1984; Kamins, 1989, 1990; Petty et al., 1983; Tripp et al.,1994). But it is indeed a fact
that there has been little research that has been done to test directly the possible effects of
negative information about the endorsers under consumer’s evaluation of an endorsed brand (Till
& Shimp, 1998). In fact (Till & Shimp, 1998), were the earlier researchers who did some
research in the field of negative publicity of celebrity endorsers. Their researchers are focusing
on the risks being associated with celebrity endorsements especially negative publicity and the
impact of that on the customers towards the endorsed brand.
The value of the celebrity endorsement comes through the building of an associative link
between a brand and a celebrity. However, the establishment of such a link is not without risk
(Till and Shimp, 1995).
Consider the possibility of negative publicity regarding a celebrity endorser. If the brand is
strongly associated with the celebrity then the occurrence of the negative information about the
celebrity will also activate in memory, to some degree, the endorsed brand. This joint activation
of brand and celebrity provides a path over which one’s diminished evaluation of the celebrity
has an opportunity to transfer to the brand. The key to this process is the simultaneous activation
of the brand and celebrity nodes. Negative information about the celebrity activates the celebrity
node, which then activates the brand node to some degree, which allows for the transfer of the
reduced evaluation of the celebrity to the brand (Till, 1996). Therefore, there is always a risk that
negative publicity about a celebrity can tarnish the endorsed brand.
Caution in choice of celebrity endorser is warranted given the potential risk of tarnishing the
brand’s image. Negative publicity has plagued such celebrity endorsers as O.J. Simpson (Hertz),
Mike Tyson (Pepsi), and Dennis Rodman (Milk Council). And as such this negative publicity
risks have been found o be tarnishing the endorsed brand.
The most important characteristics that their researches focus on is the associative link between
the endorser and the brand. The following section will give brief summary on the theory of
associative networks and associative learning on consumers.
.
Associative Networks & Associative Learning
Memory is considered as a network consisting of various nodes connected by associative links
and this is the base upon which associative network principles are built upon (Anderson 1976;
Collins & Loftus 1975; Rumelhart, Hinton, & McClelland 1986). What the endorsement process
does is to interconnect the unconnected nodes such as the celebrity and nodes which act as
separate nodes through the process and during this the brands borrow specific associations of a
celebrity to finally be associated within them. If there is a stronger relationship between the
celebrity and the associated brand then a lower evaluation of the celebrity can also be resulting in
a lower evaluation for the brand under purview (Till and Shimp, 1998). In an associative network
brands and celebrities are acting as nodes and an associative link is being built among them after
which both of them become part of either’s association set (Meyers-Levy, 1989). A classic
example is the use of Michael Jordan with Nike that as soon as his name was heard Nike would
be remembered and vice versa.
Thus it has been proved that these associative links acts as a source of connection between the
brands and the celebrities and any events both positive and negative can have adverse effects on
the interconnected variables.
Classic cases and their consequences:
One of the most ‘grass root’ and ‘organic’ level methods to promote a brand is a word to mouth
marketing and celebrity endorsement is the best source of it as it reaches more than any others as
there are many potential customers who would like to influence like minded peers who would
patronize their celebrities as well as the brands they stand for. Brands encourage when their fans
talk about them in social media channels and all other traditional medium and make a free
propaganda to use their products and services because their favourite celebrity does so. We all
think about a product or a service in the purview of others and if that other person is a celebrity
then that definitely makes a difference in opinion of the customers about that particular product
or service. In short, what happens with an average customer is that they would like to associate
themselves with that particular brand like what their favourite celebrity did just in order to ensure
that they are able to download the qualities that they have bestowed upon the celebrity to be
downloaded to them because of the usage of the product or the service. More than others it is
often the sports personalities and movie stars who are often looked upon in this manner by
aspiring consumers.
But there have been situations when these celebrities have seen to be falling from grace and this
has led to adverse effects not only on the customers who have been actively following them
rather much more on the companies who have been investing dimes more than ever accounting
to almost of about 50 % of their marketing budgets to promote them. Presented here are some of
the cases which have been examples of celebrity scandals and their adverse effects on companies
who have used them in their brand endorsements.
Tiger Woods and the 12 Billion:
Tiger Woods’ still regarded as one of the greatest in the field of golf, during the tougher times he
faced in his personal life because of the wake of the scandal involving his extramarital affairs not
only cost a big dent in his career but in fact a bigger loss to the brands which he was an endorser.
Reports from a study by University of California suggest that shareholders of Nike, Gatorade and
others collectively lost around 12 billion dollars in share value due to the scandal involving him.
And these losses are separate from the potential losses than Tiger Woods’ own losses and
earnings. Tiger Woods’s estimated income from endorsements was around 100 million the
highest for any athlete before the scandal erupted. Apart from the other losses the three sports
related companies PGA Tour golf, Gatorade and Nike experienced a 4.2 percent scandal
generated overall drop in their stock value equivalent o about $6 billion.
Lance Armstrong- Deity to Disgrace:
Lance Armstrong the celebrity cyclist was almost considered as the god of cycling and also the
best motivator not only for winning the seven Tour de France titles but battling cancer and being
an inspiration for millions throughout the world. Till 2013 when he himself admitted to using
performance enhanced drugs for improving himself after which his fall from grace started where
he was stripped of his titles that he won and also the bronze medal he won in Olympics was also
withdrawn. All the brands that he endorsed had a great devaluation. Especially the Live strong
foundation that he personally owned and was developing got a great devaluation and Nike also
parted ways with the foundation. Tailwind Sports had to pay a fine of $10 Million to the
authorities.
Blade runner and the losses:
By the end of 2012 Oscar pistorius became the poster boy of world athletics and was referred to
as the “Blade Runner”. Organizations such as Forbes and Sports pro even identified the
Paralympics runner as the most marketable runner in the world and he started getting
endorsement deals nobody would have imagined. When pistorius stood charged with the murder
of his partner Reeva Steenkamp, things changed to worse Pistorius when he was in the peak of
the career had his sponsorship and endorsement portfolio amounting to more than US$2m per
year. Where some people might have seen a disabled athlete, companies and brands such as
Nike, Oakley and French fragrance manufacturer Thierry Mugler spied a commercial
opportunity. And when he fell from grace these companies lost a lot of goodwill and big time
commercial value.
Aamir Khan and #AppWapsi:
Aamir khan created a storm by his comments on in-tolerance which created wrath among many
followers and led to many negative comments on social media as well as violent protests against
him in his house as well wherever he went. Apart from the personal protests against him it was
snapdeal.com which was the prime target my many of the protestors. Snapdeal.com has roped
him with a deal of close to 15 to 20 crores to capitalize on his stardom and utilize that as an
opportunity to increase their brand awareness. But due to the incident many of the customers
resorted to tactics such as deleting the mobile application of Snapdeal.com as a way of staging
their protest and also downgraded the application to 1 rating on Google play store so that their
application was downgraded. Even though the exact financial losses that occurred to the
company was not measured but it cause a greater dent to the image of the company.
Thus these celebrities’ personal lives and actions have been causing financial and image loss to
the brands that they have endorsed. In fact the main reason the celebrities are being used by
brands is to build their image and create brand personalities but unfortunate situations like this
create a big question mark on the rationale for going for celebrity endorsements as such.
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