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Celebrity Endorsements in Marketing: Strategies, Effectiveness, and Challenges, Summaries of Brand Marketing

This document delves into the world of celebrity endorsements in marketing, exploring their effectiveness, strategies, and challenges. It examines the factors that contribute to a successful celebrity endorsement, including expertise, trustworthiness, and likability. The document also discusses the risks associated with celebrity endorsements, such as negative publicity and the potential for a celebrity's personal life to impact their image. It concludes by highlighting the importance of return on investment and the evolving role of celebrities in marketing.

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Source Credibility
Credibility is the extent to which the recipient sees the source as having relevant knowl-
edge, skill, or experience and trusts the source to give unbiased, objective information.
There are two important dimensions to credibility: expertise and trustworthiness.
A communicator seen as knowledgeable—someone with expertise—is more persua-
sive than one with less expertise. But the source also has to be trustworthy—honest,
ethical, and believable. The influence of a knowledgeable source will be lessened if
audience members think he or she is biased or has underlying personal motives for
advocating a position (such as being paid to endorse a product).
One of the most reliable effects found in communications research is that expert
and/or trustworthy sources are more persuasive than sources who are less expert or
trustworthy.5 Information from a credible source influences beliefs, opinions, attitudes,
and/or behavior through a process known as internalization, which occurs when the
receiver adopts the opinion of the credible communicator since he or she believes infor-
mation from this source is accurate. Once the receiver internalizes an opinion or atti-
tude, it becomes integrated into his or her belief system and may be maintained even
after the source of the message is forgotten.
A highly credible communicator is particularly important when message recipients
have a negative position toward the product, service, company, or issue being pro-
moted, because the credible source is likely to inhibit counterarguments. As discussed
in Chapter 5, reduced counterarguing should result in greater message acceptance and
persuasion.
Applying Expertise Because attitudes and opinions developed through an inter-
nalization process become part of the individual’s belief system, marketers want to use
communicators with high credibility. Companies use a variety of techniques to convey
source expertise. Sales personnel are trained in the product line, which increases cus-
tomers’ perceptions of their expertise. Marketers of highly technical products
recruit sales reps with specialized technical backgrounds in engineering, com-
puter science, and other areas to ensure their expertise.
Spokespeople are often chosen because of their knowledge, experience, and
expertise in a particular product or service area. Endorsements from individu-
als or groups recognized as experts, such as doctors or dentists, are also com-
mon in advertising. For example, Dove has promoted the fact that its skin
cleansing products are the most recommended by dermatologists in ads for
more than 60 years (Exhibit 6–2). The importance of using expert sources was
shown in a study by Roobina Ohanian, who found that the perceived exper-
tise of celebrity endorsers was more important in explaining purchase inten-
tions than their attractiveness or trustworthiness. She suggests that celebrity
spokespeople are most effective when they are knowledgeable, experienced,
Chapter 6 SourCE, MESSage, and Channel Factors 179Global Perspective 6–1 >
> >
Celebrities Sell Out—but Only Abroad
While many celebrities make huge sums of money endorsing
products and serving as advertising spokespeople, some big
stars won’t appear in ads in the United States because they
don’t want fans to think they’ve sold out. There has also long
been a feeling among actors that appearing in commercials
might devalue their image among the powerful Hollywood
producers and directors. However, this has been chang-
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Source Credibility

Credibility is the extent to which the recipient sees the source as having relevant knowl- edge, skill, or experience and trusts the source to give unbiased, objective information. There are two important dimensions to credibility: expertise and trustworthiness. A communicator seen as knowledgeable—someone with expertise—is more persua- sive than one with less expertise. But the source also has to be trustworthy—honest, ethical, and believable. The influence of a knowledgeable source will be lessened if audience members think he or she is biased or has underlying personal motives for advocating a position (such as being paid to endorse a product). One of the most reliable effects found in communications research is that expert and/or trustworthy sources are more persuasive than sources who are less expert or trustworthy. 5 Information from a credible source influences beliefs, opinions, attitudes, and/or behavior through a process known as internalization, which occurs when the receiver adopts the opinion of the credible communicator since he or she believes infor- mation from this source is accurate. Once the receiver internalizes an opinion or atti- tude, it becomes integrated into his or her belief system and may be maintained even after the source of the message is forgotten. A highly credible communicator is particularly important when message recipients have a negative position toward the product, service, company, or issue being pro- moted, because the credible source is likely to inhibit counterarguments. As discussed in Chapter 5, reduced counterarguing should result in greater message acceptance and persuasion.

Applying Expertise Because attitudes and opinions developed through an inter-

nalization process become part of the individual’s belief system, marketers want to use communicators with high credibility. Companies use a variety of techniques to convey source expertise. Sales personnel are trained in the product line, which increases cus- tomers’ perceptions of their expertise. Marketers of highly technical products recruit sales reps with specialized technical backgrounds in engineering, com- puter science, and other areas to ensure their expertise. Spokespeople are often chosen because of their knowledge, experience, and expertise in a particular product or service area. Endorsements from individu- als or groups recognized as experts, such as doctors or dentists, are also com- mon in advertising. For example, Dove has promoted the fact that its skin cleansing products are the most recommended by dermatologists in ads for more than 60 years (Exhibit 6–2). The importance of using expert sources was shown in a study by Roobina Ohanian, who found that the perceived exper- tise of celebrity endorsers was more important in explaining purchase inten- tions than their attractiveness or trustworthiness. She suggests that celebrity spokespeople are most effective when they are knowledgeable, experienced,

Chapter 6 SourCE, MESSage, and Channel Factors 179Global Perspective 6–1 >

Celebrities Sell Out—but Only Abroad

While many celebrities make huge sums of money endorsing products and serving as advertising spokespeople, some big stars won’t appear in ads in the United States because they don’t want fans to think they’ve sold out. There has also long been a feeling among actors that appearing in commercials might devalue their image among the powerful Hollywood producers and directors. However, this has been chang-

ing in recent years, and even some of the biggest names in entertainment have decided to cash in on their celebrity and appear in commercials. For example, Matthew McConaughey signed a lucrative endorsement deal with the Lincoln Motor Company division of Ford to help the luxury brand attract younger, more culturally progressive consumers. He started appearing in commercials for the company in 2014 and is Source: Beam Suntory Inc. credited for helping increase sales of Lincoln cars and SUVs over the past five years. Actor Charlize Theron is paid $5 mil- lion a year to endorse Dior’s J’adore perfume, while Nicole Kidman was paid $8 million to appear in commercials for the Chanel No. 5 fragrance line. Some of the A-list celebrities still resist the temptation to cash in on their fame in the United States, but they are only too happy to appear in ads in foreign countries. Nowhere are ads starring American celebrities more prevalent than in Japan. Even the rich and famous have trouble saying no to Japanese advertisers who will pay them between $1 million and $3 million for a few hours’ work to make 10-second spots that their Western fans across the Pacific will never see. In Japan, celebrities make more money for less work and, because the commercials will never air in the United States, they think they can make the money without looking like they are selling their artistic souls. Academy Award winner Leonardo DiCaprio, who is argu- ably one of the most famous actors in the world, appeared in a 15-second spot for the Jim Beam bourbon brand in which the only words he says are “cool bourbon, Jim Beam.” The company said the ad would be used only in Japan, but it made its way to the United States and other countries via You- Tube as soon as it was aired there. Megastars such as Brad Pitt, Hugh Jackman, Katy Perry, Scarlett Johansson, Ben Stiller, Harrison Ford, and Johnny Depp have been paid millions for appearing in Japanese commercials. Pop star Katy Perry has appeared in commer- cials for Japanese laundry detergent Laundrin, which show her coming home from a hectic pubic appearance and slip- ping into a freshly laundered bathrobe to cook pancakes. Pitt and qualified to talk about the product they are endorsing. 6 A number of other studies have shown that celebrities perceived as having expertise with a product or service can lend persuasive power to an advertising message. 7

Applying Trustworthiness While expertise is important, the target audience

must also find the source believable. Finding celebrities or other figures with trust- worthy images is often difficult. Many trustworthy public figures hesitate to endorse products because of the potential impact on their reputation and image. E-Poll Market Research conducts ongoing consumer surveys to gauge the popularity and marketability of celebrities by surveying consumers and having them rate celebrities on 46 different personality attributes such as trustworthiness, sincerity, trendsetting, and influence. The company’s annual E-Score Celebrity Report includes a spokesperson index score that reflects a celebrity’s perceived credibility and authority and suggests his or her potential as a spokesperson. 8 The highest-scoring celebrities on its most recent lists have included actors Betty White, Tom Hanks, Matthew Gubler, and Dwayne “The Rock” Johnson. Talk-show host and entertainment producer Oprah Winfrey has also been a very trusted source through the years, and her “Favorite Things” list has served as a trusted source for product recommendations for many consumers. Winfrey began appearing in ads for Weight Watchers in 2016, a few months after she acquired 10 percent ownership

cooler than a decade ago. I don’t think people feel an obliga- tion to hide it.” However, celebrities are used to getting their way, and most would probably still prefer that the knowledge of their overseas endorsements stay there. Sorry about that. Sources: Emerald Catron, “30 Celebrities with Surprising Overseas Endorse- ment Deals,” BestLife, June 1, 2018, https://bestlifeonline.com/celebrity- commercials-overseas/; Roo Ciambriello, “A Glam Hostel Gets Put to the Test When Mariah Carey Is Accidentally Booked,” Adweek, April 10, 2018, https:// www.adweek.com/creativity/a-glam-hostel-gets-put-to-the-test-when-mariah- carey-is-accidentally-booked/; Bradford Wernie, “Lincoln Signs Matthew McConaughey to Help Win Younger Car Buyers,” Advertising Age, August 21, 2014, http://adage.com/article/news/matthew-mcconaughey-signs-lincoln- boost-mkc/294661/; Jeff Labrecque, “Leonardo DiCaprio and the Easy Money of Foreign Commercials,” EW.com, February 19, 2013, http://popwatch. ew.com/2013/02/19/leonardo-dicaprio-celebrity-foreign-commercials/; in the company. Her involvement with the company and role as spokesperson led to a surge in publicity as well as an increase in subscribers to the program. However, in late 2018, the company added two new celebrity brand ambassadors, actor Kate Hudson and singer Robbie Williams, as part of a rebranding designed to position the company as a wellness brand rather than a weight loss program. The rebranding included chang- ing the company name to WW to help shed its Weight Watchers image. 9 While many top celebrities could command large sums of money as endorsers and spokespersons, very few of them do, often out of concern for how their image might be impacted. Global Perspective 6–1 discusses how some American celebrities protect their image by endorsing products in Japan and other countries rather than in the United States. Marketers can also deal with the source-trustworthiness issue by using other IMC tools such as publicity. Information received from sources such as newscasters is often very influential because these individuals are perceived as unbiased and thus more cred- ible, even though they are often presenting stories that stem from press releases. In some situations celebrities may appear on news programs or talk shows and promote an upcoming cause or event such as the release of a new movie or music. With the increase in stealth marketing techniques, many consumers are becoming wary of endorsements made by celebrities on news programs and talk shows. For example, a New York Times article revealed that drug companies were making payments to celebrities or their Chapter 6 SourCE, MESSage, and Channel Factors 181EXHIBIT 6– James Dyson is one of the most effective CEO spokespersons. Source: Dyson, Inc. favorite charities in return for the celebrities’ touting the companies’ pharmaceutical products on news and talk shows. As a result of the controversy from the article, CNN and the major broadcast networks announced that they would disclose any such finan- cial deals during interviews. 10 With the growth of social media another area of concern has arisen regarding the trustworthiness of sources that endorse companies and brands and make recommen- dations on sites such as Facebook and Twitter as well as through online reviews or on blogs. In 2009 the Federal Trade Commission passed a set of guidelines requiring online endorsers and bloggers to disclose any material connection they might have to a company. The FTC developed the guidelines in response to studies that showed as many as 30 percent of online reviews were fake and were coming from someone who had been paid to write them or failed to reveal their association with a company or brand. In 2015, the FTC issued an update to its endorsement guidelines clarifying how much disclosure is required. 11

Using Corporate Leaders as Spokespeople Another way of enhancing

source credibility is to use the company president or chief executive officer as a spokes- person in the firm’s advertising. Many companies believe the use of their president or

CEO is the ultimate expression of the company’s commitment to quality and customer service. For some firms, the use of a president or CEO in their ads can help create an identity and personality for the company and/or brand. For example, Richard Bran- son’s irreverence and zeal for life have helped personify the image of Virgin’s empire of megastores, airlines, mobile phones, and soft drinks. Branson has been used occasion- ally in ads for various Virgin brands. A study by the research firm Ace Metrix found that the most effective CEO spokesperson in recent years is Jim Koch, founder of the Boston Beer Company, which markets the popular Samuel Adams brands. 12 Koch has appeared in numerous commercials for the company and is perceived to be authentic and genuine, which are two important traits for the effective use of corporate leaders in ads for their companies Another popular CEO spokesperson is Sir James Dyson, who has appeared in ads for the company’s vacuum cleaners, hair dryers, and other innova- tive products. The practice of using company founders, owners, and presidents as adver- tising spokespersons is particularly prevalent among small and midsize companies such as retailers and auto dealers serving local markets (Exhibit 6–3). Many marketing and advertising experts question the strategy of using company presidents or owners in ads and note that it is often ego rather than logic that is the reason for their use. 13 The experts suggest that businesspeople should get in front of the camera only if they exude credibility and possess the intangible quality of provok- ing a warm, fuzzy feeling in viewers. For example, Microsoft chair Bill Gates appeared in several TV commercials that were designed to help build a stronger image for the company. Gates was paired with comedian Jerry Seinfeld in the spots, which attempted to use quirky humor to get consumers to think about Microsoft in a different way. How- ever, the ads aired for only a short time and many ad critics noted that Gates did not come across well in them. 14 Another concern is that a CEO spokes- person who becomes very popular may get more attention than the company’s prod- uct/service or advertising message. And if a firm’s image becomes too closely tied to a popular leader, there can be problems if that person leaves the company or is involved in any type of controversy such as a labor dispute, political issue, or per- sonal problem. For example, John Schnat- ter appeared in more than 60 commercials for the Papa John’s pizza chain over the past two decades and was considered one of the most effective CEO spokespersons, 182 Chapter 6 SourCE, MESSage, and Channel Factorsbecause he was perceived as authentic and genuine. 15 However, during an earnings report conference call in November 2017, Schnatter blamed the National Football League’s handling of its players’ kneeling protests during the national anthem for the chain’s declining pizza sales. Papa John’s had been the official pizza sponsor of the leagues since 2010. Several white supremacist groups praised Schnatter for his com- ments and called Papa John’s “the official pizza of the alt-right.” The controversy resulted in an extensive amount of negative publicity for the company, which pulled all advertising featuring Schnatter, who resigned as CEO less than two months later. 16 It has also been argued that the negative sentiment that still lingers from the financial crisis the country went through more than a decade ago, as well as more recent scan- dals involving top executives in some companies, has eroded confidence in executives,

maintain the attitudinal position or behavior only as long as it is supported by the source or the source remains attractive. Marketers recognize that receivers of persuasive communications are more likely to attend to and identify with people they find likable or similar to themselves. Similar- ity and likability are the two source characteristics marketers seek when choosing a communicator.

Applying Similarity Marketers recognize that people are more likely to be influ-

enced by a message coming from someone with whom they feel a sense of similarity. 26 If the communicator and receiver have similar needs, goals, interests, and lifestyles, the position advocated by the source is better understood and received. Similarity is used in various ways in marketing communications. Companies select salespeople whose char- acteristics match well with their customers’. A sales position for a particular region may be staffed by someone local who has background and interests in common with the customers. Global marketers often hire foreign nationals as salespeople so customers can relate more easily to them. Companies may also try to recruit former athletes to sell sporting goods or beer, since their customers usually have a strong interest in sports. Several studies have shown that customers who perceive a salesperson as similar to themselves are more likely to be influenced by his or her message. 27 Similarity is also used by creating a situation where the consumer feels empathy for the person shown in the commercial. In a slice-of-life commercial, the advertiser usually starts by showing an event or predicament that consumers often face, with the hope of getting the consumer to think, “I can see myself in that situation.” This can help establish a bond of similarity between the communicator and the receiver, increasing the source’s level of persuasiveness. Marketers like to cast actors in their commercials that consumers will notice, recognize, identify with, and remember, as well as help differentiate their products and services. In some cases they try to create a personality figure for the company or brand that consumers will find likable. For example, one of the most popular advertising personalities for more than a decade has been Flo, the fictional salesperson character who has appeared in more than 100 commercials for Progressive Insurance. Her popularity prompted other companies to develop likeable characters such as Jan, the charming and sassy receptionist at the Toyota dealership, and Lily, the retail store employee who appeared in ads for AT&T’s mobile service for a number of years (Exhibit 6–4). Her perky enthusiasm and somewhat quirky wit and charm, along with the way she presents the mobile plans to customers, made the ad campaign very popular with consumers. 28 Casting directors consider factors such as similarity and how the audience will identify with people when looking for talent to use in commercials. Many companies feel that the best way to connect with consumers is by using reg- ular-looking, everyday people with whom the average person can easily identify. For example, some of the most popular com- mercials for many years were those from the “Whassup?” campaign for Budweiser beer. In these ads the DDB agency cast a group of real-life friends from Philadel- phia, rather than actors, who greet each other with the slang word “Whassup?” when they speak on the phone or get together to watch a game and enjoy a Bud. Advertising Age named “Whassup?” one of

the top ad campaigns of the 21st century, noting how it was very effective at tapping 184 Chapter 6 SourCE, MESSage, and Channel Factorsinto popular culture and what young people are actually like and how they speak to each other. 29

Applying Likability: Using Celebrities Marketers recognize the value of using

popular celebrities to endorse their companies and brands, such as TV and movie stars, athletes, entertainers, musicians, and other well-known public figures. And they are willing to pay them large amounts of money to do so. Many of the top endors- ers are athletes such as Swiss tennis star Roger Federer, who makes an estimated $65 million per year in endorsements, followed by NBA basketball star LeBron James at $52 million. Several other athletes make more than $40 million a year in endorse- ments, including soccer star Cristiano Renaldo, NBA star Stephen Curry, and golfer Tiger Woods. For women, the top athlete endorser is tennis star Serena Williams, who makes an estimated $18 million per year for her deals with Nike, Gatorade, Intel, and a number of other companies. Other top female endorsers include tennis stars Gabrine Muguruza, Maria Sharapova, and Caroline Wozniacki—all of whom make an estimated $10 million per year from their marketing deals. A number of top female endorsers are entertainers, including actor-singer Jennifer Lopez and singers Beyoncé, Taylor Swift, and Katy Perry. There are a number of reasons marketers spend huge sums of money to have celeb- rities appear in TV commercials or print ads to endorse their company or brand or promote them on social media. Many marketers recognize that celebrities have stopping power. That is, they draw attention to advertising messages in very cluttered media envi- ronments, as the human brain recognizes celebrities in a manner similar to how it rec- ognizes people we actually know. This in turn leads to greater recall and/or recognition of the company or brand. Celebrities can also favorably influence consumers’ feelings, attitudes, and purchase behavior, as they may give more attention to and place higher value on products and services celebrities are endorsing. Another reason for using celebrity endorsers is that they can enhance the target audience’s perceptions of the product or service in terms of image and/or performance. Most marketers of sporting goods equipment use athletes to endorse their products, because a well-known athlete may convince potential buyers that the product will enhance their own performance. For example, Under Armour’s endorsement roster includes a number of top athletes, including NBA basketball star Stephen Curry of the Golden State Warriors, Major League Baseball star Bryce Harper, golfer Jordan Spieth, and New England Patriots star quarterback Tom Brady. (Exhibit 6–5) The athletic shoe and apparel company also has endorsement deals with a number of female ath- letes, including skier Lindsey Vonn, a four-time Olympic medalist, and ballerina Misty Copeland, who is only the third African American female soloist in the history of the American Ballet Theater. A number of factors must be considered when a company decides to use a celebrity spokesperson, including the dangers of overshadowing the product and being overex- posed, the target audience’s receptivity, and risks to the advertiser. Overshadowing the Product How will the celebrity affect the target audience’s pro- cessing of the advertising message? Consumers may focus their attention on the celeb- rity and fail to notice or recall the brand or advertising message. Carsten Erfgen and his colleagues refer to this as the “vampire effect” and note that it occurs when the personality of the celebrity endorser overshadows the brand he or she is advertising and thus has a negative impact rather than helping to sell it. 30 Advertisers should select a celebrity spokesperson who will attract attention and enhance the sales message, yet

with celebrities they follow. As was discussed in Chapter 5, many celebri- ties promote brands on their personal Instagram or Facebook pages. For example, pop star Selena Gomez has endorsement deals with a number of companies/ brands, including Coach, Coca-Cola, and Pantene shampoo. Luxury brand marketer Louis Vuitton signed Gomez to an endorsement deal a few years ago by rolling out ads on Instagram, where she has a huge global following. The post scored more than 1 million likes in the first two hours it was posted. 36 While young celebrities with large followings on social media are often used as endorsers, recent research has shown that their older counterparts are just as effec- tive, if not more so. A study by Spotted, a research company that focuses on celebrity endorsements, analyzed the effectiveness of endorsement deals, taking into consider- ation factors such as the likability; relatability; attractiveness; trustworthiness; authen- ticity; and facial, name, and voice recognition of 400 celebrities. Their study found that most effective campaigns were those using older celebrities such as Dwayne “The Rock” Johnson for Under Armour, Mark Wahlberg for AT&T, Kristen Bell for Old Navy, and Reese Witherspoon for Crate and Barrel. The least effective campaigns used younger celebrities such as Bella Throne for BUXOM cosmetics, Say Mitchell for Toy- ota, and Ansel Elgort for Polo Ralph Lauren. Spotted’s CEO noted that older celebri- ties may be more effective because the sheer volume of their work gives them more exposure to different subsets of consumers, and they enjoy a higher level of familiarity and trustworthiness. 37 A number of marketers do not use celebrities because they have determined that they do not influence the markets they are targeting, and/or they do not want to pay the large sums of money often required to do so. Many are also concerned that consum- ers have become more skeptical and cynical toward the use of celebrity endorsers and respond better to ads using humor, irony, and unvarnished truth. There is also concern over tying a company or brand’s image to a celebrity endorser, which we discuss next. Risk to the Advertiser A celebrity’s behavior may pose a risk to a company. 38 A num- ber of entertainers and athletes have been involved in activities that could embarrass the companies whose products they endorsed. As discussed in the chapter opener, golfer Tiger Woods was making more than $100 million per year from various endorsement deals. However, a number of companies terminated their endorsement deals with him when his infidelity and other character issues became public in 2009. Another high- profile athlete who lost a tremendous amount of money in endorsements was cyclist Lance Armstrong. In 2012, the U.S. Anti-Doping Agency released a report containing evidence that the seven-time Tour De France champion concealed his use of banned performance- enhancing substances. Armstrong had all of his titles stripped away and was banned from cycling for life, which resulted in 11 companies—including Nike, Oakley, Anheuser Chapter 6 SourCE, MESSage, and Channel Factors 187Busch, Trek, and 24-Hour Fitness—terminating their endorsement contracts with him. It is estimated that his actions cost Armstrong nearly $150 million in endorsements. 39 Problems regarding endorsers are not limited to athletes; they can occur with other types of celebrities as well, including social media influencers. For example, in 2019 several celebrities were among a group of individuals indicted for allegedly paying large sums of money to help their children gain admission into prestigious universities. Actor Lori Loughlin and her fashion designer husband Mossimo Gianulli were charged with paying $500,000 to help their two daughters get into the University of Southern Cali- fornia by designating them as recruits to the university’s crew team. One of the daugh- ters, Olivia Jade Giannulli, was a popular social media influencer with nearly 2 million subscribers on YouTube channel and 1.3 million followers on Instagram. However, within a few weeks most of the companies whose brands she was representing cut ties

with her, including cosmetics giant Sephora, hair care brand Tresemme, fashion brand Lulus, and consumer electronics company Hewlett Packard. 40 Problems can also arise with individuals who have become celebrities based on their role as an advertising spokesperson. In 2015 Subway terminated its relationship with Jared Fogle, who had been a popular spokesperson for the company for more than 15 years, after he was arrested and later pleaded guilty to child pornography and sex charges. 41 Marketers recognize that the use of celebrity endorsers can be a very expensive and high-risk strategy, because what the celebrities do in their personal lives can impact their image and the way they are viewed by the public. Some companies may face a dilemma in selecting celebrity endorsers: While they prefer them to be upright, they still want them to have an edge or be somewhat irreverent to be able to connect with consumers. This may be particularly true for companies marketing their products to teens and young adults. To avoid problems, companies often research a celebrity’s per- sonal life and background. Many endorsement contracts include a morals clause allow- ing the company to terminate the contract if a controversy arises. Several companies, including luxury brands Burberry and Chanel as well as fashion retailer H&M, canceled their contracts with supermodel Kate Moss in the wake of a British tabloid photo that showed her using cocaine. 42 However, marketers should remember that adding morals clauses to their endorsement contracts only gets them out of a problem; it does not pre- vent it from happening. Thus, it is important that they carefully consider the character of a celebrity as well as the potential risk associated with using him or her as a spokes- person or endorser for the company or one of its brands. 43 Return on Investment Perhaps the most important factor a company must consider regarding the use of celebrity endorsers is the return on investment from using them. Marketers use celebrities to increase awareness of and attention to their company and/ or brands, as well as their advertisements, and to develop strong associations between the celebrity and the brand that will result in higher purchase intentions. Many compa- nies do not reveal the increases in sales and/or market share that result from the use of celebrity endorsers. However, an interesting study was conducted by Anita Elberse and Jeroen Verleun that examined the economic impact of a sample of 347 endorsement deals for 180 athletes across six packaged-goods product categories. The results of their study found that sales did increase significantly over the first six months that the athlete endorsers were used—about 4 percent. However, subsequent major achievements by the athletes did not improve the sales of the brands studied relative to their competitors, which calls into question the long-term value of endorsement deals. 44 It should be noted that there are many examples of companies that have seen sales increase, and there can be other factors that marketers consider in determining the value gained from using a celebrity endorser. Thus it is likely that many marketers will continue to use them despite some of the drawbacks associated with their use that have been discussed. Some companies are changing their relationships with celebrity endors- ers and having them become more involved with their companies and brands rather than just appearing in advertisements (Exhibit 6–7). A number of high-profile celebri- ties have become involved in areas such as product design and development as well as the advertising creative process. For example, Selena Gomez’s endorsement deal 188 Chapter 6 SourCE, MESSage, and Channel FactorsEXHIBIT 6– Marketers are using celebrities for more than just appearing in ads. Source: Mark Dierker/McGraw-Hill Education with Coach included her collaborating with the luxury brand’s creative director to develop her own line of accessories, leather goods, and

Chapter 6 SourCE, MESSage, and Channel Factors 189The advertising industry sometimes refers to the cultural meaning a celebrity spokes- person can bring to an endorsement as “borrowed equity.” An excellent example of a celebrity who has acquired cultural meaning that she brings to her many endorsements is actor Jennifer Aniston. In addition to being very attractive, she is funny, charismatic, authentic, and wholesome—a persona developed from the Rachel character she played on the hit sitcom Friends for many years. She is also perceived as very likeable, relat- able, and aspirational, which are traits stemming from the roles she has played in mov- ies such as Marly & Me, Horrible Bosses, and Office Space. Aniston’s cultural meaning works very well in endorsements she does for brands such as Aveeno, Smartwater, and Emirates Airlines. 52 Another popular celebrity with a distinct identity is actress/comedienne Tina Fey, who has developed cultural meaning through the various roles and characters she has played on Saturday Night Live, the sitcom 30 Rock, and in movies such as Mean Girls, Whiskey Tango Fox Trot, and Date Night, in which she played the role of a relatable woman trying to balance her life as a wife and mother. She is also an acclaimed writer and producer, which contributes to her cultural meaning as a successful, multitasking businesswoman. McCracken suggests celebrity endorsers bring their meanings and image into the ad and transfer them to the product they are endorsing (stage 2 of the model in Figure 6–3). For example, American Express has been using Tina Fey in the advertis- ing campaign for its Amex EveryDay Credit Card, which allows users to earn rewards on everyday purchases. 53 The company introduced the card to attract a new set of con- sumers and position the brand as more approachable and inclusive. American Express is also targeting working mothers who are living very busy and somewhat hectic lives. The TV commercials for the campaign show Fey in her trademark witty fashion as a busy, on-the-go working woman and mom, juggling her personal life with work and other demands. She is an effective endorser for the brand since she represents the quintessential do-it-all woman with an endless to-do list but who gets it all done with the help of the Amex EveryDay Credit Card (Exhibit 6–8). In the final stage of McCracken’s model, the meanings the celebrity has given to the product are transferred to the consumer. By using Tina Fey in its ads, American Express can deliver on its branding and positioning platform by showing how its Every- Day Credit Card matches well with the lifestyles of busy people who are trying to EXHIBIT 6– Tina Fey’s image works well in ads for the Amex EveryDay Credit Card. Source: American Express Company 190 Chapter 6 SourCE, MESSage, and Channel Factorsbalance demanding careers with their personal lives. McCracken notes that this final stage is complicated and difficult to achieve. The way consumers take possession of the meaning the celebrity has transferred to a product is probably the least understood part of the process. The meaning transfer model has some important implications for companies using celebrity endorsers. Marketers must first decide on the image or symbolic meanings important to the target audience for the particular product, service, or company. They must then determine which celebrity best represents the meaning or image to be pro- jected. An advertising campaign must be designed that captures that meaning in the product and moves it to the consumer. Marketing and advertising personnel often rely on intuition in choosing celebrity endorsers for their companies or products, but some companies conduct research studies to determine consumers’ perceptions of celebri- ties’ meaning.

Marketers may also pretest ads to determine whether they transfer the proper meaning to the product. When celebrity endorsers are used, the marketer should track the campaign’s effectiveness. Does the celebrity continue to be effective in com- municating the proper meaning to the target audience? Celebrities who are no lon- ger in the limelight may lose their ability to transfer any significant meanings to the product.

CHOOSING A CELEBRITY ENDORSER

As we have seen, marketers must consider many factors when choosing a celebrity to serve as an advertising spokesperson for the company or a particular brand. Studies have shown that advertising and marketing managers take these various factors into account when choosing a celebrity endorser. 54 Among the most important factors are the celebrity’s match with the target audience and the product/service or brand, the overall image of the celebrity, the cost of acquiring the celebrity, trustworthiness, the risk of controversy, and the celebrity’s familiarity and likability among the target audi- ence. Digital and Social Media Perspective 6–1 discusses how YouTube personalities have become more influential than mainstream celebrities, who are less popular among young people. While some advertising and marketing executives rely on their own intuition and gut feeling, many turn to research that measures a celebrity’s familiarity and appeal among their target audience as well as other factors. Many companies and their advertising agencies rely on Q-scores that are commercially available from the New York–based firm Marketing Evaluations, Inc. To determine its Q-scores for sport personalities, actors, and entertainers, the company surveys a representative national panel of con- sumers several times a year. Respondents are asked to indicate whether they have ever seen or heard of the performer or sports personality and, if they have, to rate him or her on a scale that includes one of my favorites, very good, good, fair, and poor. The familiarity score indicates what percentage of people has heard of the person; the one of my favorites score is an absolute measure of the appeal or popularity of the celebrity. The well-known Q-score is calculated by taking the percentage of respondents who indicate that a person is “one of my favorites” and then dividing that number by the percentage of respondents who indicate they have heard of that person. Q-scores are important because they answer the question: How appealing is the person among those who do know him or her? The average Q-score for performers is generally around 18 and about 17 for sports personalities. Marketing Evaluation’s Q-scores are also broken down on the basis of various demographic criteria such as a respondent’s age, income, occupation, education, and race so that marketers have some idea of how a celebrity’s popularity varies among different groups of consumers. Marketing Evaluations also now reports a negative Q-score, which is the percentage of respondents who rate the

Chapter 6 SourCE, MESSage, and Channel Factors 191Digital and Social Media

Perspective 6–1 > > >

YouTubers—New Celebrities to Gen Z and Millennials

If you took a survey of baby boomers or gen Xers and asked them to name the most influential celebrities, it is likely the list would include television and movie stars, entertainers, musicians, and athletes. Depending on their age, they would probably mention popular celebrities such as Jennifer Annis- ton, Dwayne Johnson, George Clooney, Ellen DeGeneres, LeBron James, and perhaps even Kim Kardashian. However, if you were to ask many millennials and gen Zers the same

having famous athletes appear alongside them in their videos. In 2019, Dude Perfect had the second most popu- lar YouTube channel in the world, with nearly 41 million subscribers. personality as fair or poor divided by only those who are familiar with the person. Exhibit 6–9 shows a sample page from the Performer Q study. In addition to Q-scores, marketers use information provided by a number of other research firms that provide them with data on the popularity of various celebrities and insight into how well their image might fit with their company or brand. For example, in 2018 consumer research firm GfK MRI and market research firm E-Poll launched a new service, MRI/E-Poll Celebrity Fusion, that provides detailed insight into con- sumer/celebrity compatibility. The service combines MRI’s consumer research data, which covers purchase patterns for over 6,500 products and services, with E-Polls research on awareness, appeal, and attribute measures for more than 10,000 celebrities. The new service allows marketers insight into how the interest and appeal of celebrities align with consumers’ purchase behavior for various brands. 55 192 Chapter 6 SourCE, MESSage, and Channel FactorsCelebrity brand strategist Jeetender Sehdev took a deeper dive into the survey data to understand why the You- Tube stars have more influence on teens. He found that they scored significantly higher than traditional celebrities did across a range of characteristics that influence the purchase behavior of teens. The YouTubers were judged to be more engaging, extraordinary, and relatable than mainstream stars, who were rated as being smarter and more reliable. The two types of celebrities were rated evenly in sex appeal. He also found that teens enjoy an intimate and authentic experience with YouTube personalities because they do not feel their images are orchestrated by PR professionals. Teens also say they appreciate YouTube stars’ more candid sense of humor, lack of filter, and risk-taking spirit—behaviors that are often managed carefully for mainstream celebrities. There are several other reasons YouTubers influence teens and millennials more than mainstream celebrities do. According to a study conducted by Google, YouTube sub- scribers say that their favorite YouTubers understand them better and can relate to them more than do traditional celeb- rities. YouTube content creators also develop relationships with their fan base, which leads to higher engagement, as evidenced by more views, comments, and other actions such as liking and sharing. Teens and young adults also feel that YouTube personalities are more influential in setting trends and shaping popular culture than traditional celebrities. There is no doubt that a new generation of talented people who create their own content and deliver it on social sites such as YouTube, Instagram, Facebook, and other platforms are becoming household names and legitimate influencers among young consumers. Several studies have shown that younger consumers would try a brand or product endorsed by a YouTube personality and that they make pur- chase decisions based on recommendations of their favorite YouTuber over those of tradition celebrities. Chris Foster, the former chief operating officer of the Saatchi & Saatchi advertising agency, notes that the Internet and social media are clearly changing the nature of celebrity in ways that have major implications for advertising and other forms of market- ing. He argues that the traditional image of a celebrity as remote, unknowable, and highly controlled by publicists is no longer persuasive or effective, because members of today’s

Source: Dude Perfect, llC plugged-in generation want to feel connected to their idols and have a sense of how they spend their lives. Foster argues that a democratization of celebrity is taking place that includes three key factors—expertise, access, and identification—and popular social media personalities often stack up as well, if not better, on all three than do traditional celebrities who are paid to promote companies and brands. He notes that the use of endorsements in advertising will never go away but is changing dramatically in ways that give them more meaning. Technology is making it easier for ordi- nary consumers to do the marketing for brands and do it in ways that are more authentic and may remove the need for celebrity endorsers. As Foster notes: “We’ve seen the future of celebrity endorsement. And it’s us.” Sources: Paige Leskin, “These Are the 23 Most Popular YouTube Stars in the World,” Business Insider, April 4, 2019, https://www.businessinsider.com/most- popular-youtubers-with-most-subscribers-2018-2; John Lynch, “The 11 Most Popular YouTube Stars in the US—Who Have Snagged Millions of Fans and Millions of Dollars,” Business Insider, February 18, 2018, https://www.busines- sinsider.com/most-popular-youtube-stars-in-america-usa-list-2018-2; Chris Fos- ter, “Why J-Law & George Clooney Don’t Matter: Saatchi & Saatchi Coo,” USA Today, June 15, 2015, www.usatoday.com/story/opinion/ 2015/06/12/internet- celebrity-endorsement-advertising-column/71084290/; Susanne Alt, “Survey: YouTube Stars More Popular Than Mainstream Celebs among U.S. Teens,” Variety, August 5, 2014, http://variety.com/2014/digital/news/survey-youtube- stars-more-popular-than-mainstream-celebs-among-us-teens-1201275245/. Applying Likability Decorative Models Advertisers often draw attention to their ads by featuring a physically attractive person who serves as a passive or decorative model rather than as an active communicator. Research suggests that physically attractive communicators generally have a positive impact and generate more favorable evaluations of both ads and products than do less attractive models. 56 The gender appropriateness of the model for the product being advertised and his or her relevance to the product are also important considerations. 57 Products such as cosmetics or fashionable clothing are likely to benefit from the use of attractive models, since physical appearance is very relevant in marketing these items. Some models draw attention to the ad but not to the product or message. Studies show that an attractive model facilitates recognition of the ad but does not enhance copy readership or message recall. Thus, advertisers must ensure that the consumer’s attention Chapter 6 SourCE, MESSage, and Channel Factors 193EXHIBIT 6– Sample page from Marketing Evaluations, Inc., Performer Q Study. Source: Marketing Evaluations, Inc. will go beyond the model to the product and advertising message. 58 Marketers must also consider whether the use of highly attractive models might negatively impact advertising effectiveness. Several studies have shown that some women experience negative feelings when comparing themselves with beautiful models used in ads and the images of physi- cal perfection they represent. 59 A recent study by Rachelle Jantzon and Michael Basil suggests that it is possible for models or endorsers to be too attractive, particularly when an ad is targeted at an audience that is the same sex as the endorser. 60 Their study found that endorser attractiveness generally makes an ad more effective with opposite-sex view- ers. However, when an ad is evaluated by viewers of the same sex, the use of a highly attractive model result in less interest in the advertisement. The results suggest that mar- keters should be cautious about unrealistically attractive models in their ads. Some companies have developed marketing campaigns that undermine the tradi- tional approach to beauty care advertising by telling women, as well as young girls, that they’re beautiful just the way they are. For example, Unilever’s Dove brand has

individual with an authoritative personality as a spokesper- son. For example, Take Pride in America uses actor-director Clint Eastwood, whose movie roles earned him an image as a rugged tough guy, in public service campaigns commanding people not to pollute or damage public lands (Exhibit 6–11). Eastwood has used his imposing image in TV commercials calling for people who abuse public lands “to clean up their act or get out of town.” The use of source power applies more in situations involv- ing personal communication and influence. For example, in a personal-selling situation, the sales rep may have some power over a buyer if the latter anticipates receiving special rewards or favors for complying with the salesperson. Some Chapter 6 SourCE, MESSage, and Channel Factors 195companies provide their sales reps with large expense accounts to spend on customers for this very purpose. Representatives of companies whose product demand exceeds supply are often in a position of power; buyers may comply with their requests to ensure an adequate supply of the product. Sales reps must be very careful in their use of a power position, since abusing a power base to maximize short-term gains can damage long-term relationships with customers.