Endorsement in Advertising Project

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Impact of Celebri Celebri ty Endor sements on Br and Image Image Debiprasad Mukherjee* Augus t 2009 2009

*

Debiprasad Mukherjee is a Business Process Management Consultant in IT Telecom domain.

He has experience of working with Siemens, IBM, and Tech Mahindra in India and abroad. He holds Post graduation in Management from Indian Institute of Social W elfare & Business Management, India and Bachelor in Technology in Electrical Engineering. His areas of interest are Brand Management, Management, Consumer Behavior, Advertisement, Advertisement, Customer Relationship Relationship Management, Data Warehousing, Business Intelligence, Intelligence, Master Data Management etc. Email:- [email protected] / [email protected] Contact: - Techno India Building, 6th Floor EM-4/1, Sector V, SaltLake, SaltLake, Kolkata-700091, INDIA Tel No: +91 334002 8146 8146 / +91 9830318394

This paper can be downloaded from the Social Science Research Network Electronic Paper Co llection: http://ssrn.com/abstract=1444814

Electronic copy available at: http://ssrn.com/abstract=1444814 http://ssrn.com/abstract=1444814

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 Ab st rac t Celebrity endorsement endorsement has been been established as as one of the most most popular tools of advertising in recent time. It has become a trend and perceived as a winning formula for product marketing m arketing and brand building. building. It is easy easy to choose a celebrity celebrity but it is tough to establish establish a strong strong association association between the product and the endorser. While the magnitude of the impact of celebrity endorsement remains under the purview of gray spectacles, this paper is an effort to analyze the impact of celebrity endorsements on brands. Objective of this article is to examine the relationship between celebrity endorsements and brands, and the im pact of celebrity endorsement on consumer's buying behavior as well a s how consumer makes brand preferences. This paper proposes proposes a 20 point model which can be used used as blue-print criteria and can be used by brand brand managers for selecting celebrities and capitalizing the celebrity resource through through 360 degree brand brand communication communication which, which, according according to this paper, paper, is the foundation foundation of the impact of celebrity endorsement. endorsement. Celebrity endorsement is always a two-edged sword and it has a number of positives— if properly matched it can do wonders for the company, and if not it may produce a bad image of the company and its brand.



Purpose

To study the impact of the celebrity endorsem ent on effective brand management and evaluate associated factors that contribute to the success or failure failure of the endorsement. 

 Appr  Ap proac oach h

This work was done mainly as an exploratory research to find out the correlation bet ween celebrity endorsement and brand image based on structured questionnaire questionnaire and analysis is done on the outcome/response with the help of higher order statistical tools.



Findings

Three categories of research findings have been deduc ed from the study. The first category dealing with the customer’s perception about celebrity endorsements. The second aspect is the factors those should be taken into account while endorsing a celebrity. And the last l ast aspect is the

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Value

This particular work will have a significant impact on the study of celebrity endorsement impact on brand building process and can be used for further research work work on the same area.



Keyword

Celebrity Endorsement, Celebrity Credibility, Controversy Risk, Brand Personality, Brand Im age. 

Classification

This paper can can be classified as a “Research Paper”.

Introduction Celebrities are people who enjoy public recognition by a large share of a certain group of people. Whereas attributes like attractiveness, extraordinary lifestyle or special skills are just examples and specific specific common characteris characteristics tics that are observed observed and celebrities celebrities generally generally differ from the social norm and enjoy a high degree of public awareness. The term Celebrity refers to an individual who is known to the public (actor, sports figure, entertainer, etc.) for his or her achievements in areas other than that of the product clas s endorsed (Friedman and Friedman, 1979). Endorsement is a channel of brand communication in which a celebrity acts as the brand’s bran d’s spokesperson and certifies the brand’s claim and position by extending his/her personality, popularity, stature in the society or expertise in the field to the brand. In a market with a very high hi gh proliferation of local, regional and international i nternational brands, celebrity endorsement was thought to provide a distinct differentiation (Martin Roll, 2006). McCracken's (1989) definition of a celebrity endorser is, "any individual who enjoys public recognition and who uses this recognition recognition on behalf of a consumer good by appearing with it in an advertisement (marcoms), is useful, because when celebrities are depicted in m arcoms, they bring their own culturally culturally related meanings, thereto, irrespective irrespective of the required promotional role." Ohanian stresses that to be truly effective, celebrities chosen as endorsers should be knowledgeable, experienced and qualified in order to be perceived as an expert in the category.

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endorser and the audience); Esteem (credibility to the m ass); Differentiation (in all his projections, he is seen to be one among the masses, and yet he towers above them. He is different). McCracken’s (1989) view also suggests that a symbolic “m atch” should exist between the celebrity image and the brand image in order for the celebrity endorsement to be effective. Consumers with strong self-enhancement goals tend to form self-brand connections to brands used by aspiration groups, that is, groups for which the consumer wishes to become a member (Escalas and Bettman 2003). On the other hand, self-enhancers will be more likely to reject brand associations created by a celebrity endorsement where the celebrity associ ations are rejected (i.e., a non-aspirational celebrity), compared to consumers who do not have active selfenhancement goals. Companies invest large sums of m oney to align their brands and themselves with endorsers. Such endorsers are seen as dynamic with both attractive and likeable qualities (Atkin and Block, 1983), and companies plan that thes e qualities are transferred to products via marcom activities (Langmeyer & Walker, 1991a, McCracken, 1989). Furthermore, because of their fame, celebrities serve not only to create and maintain attention but also to achieve high recall rates for marcom messages in today's highl y cluttered environments (Croft et al, 1996, Friedman and Friedman, 1979). Some brands can reject celebrit y endorsement outright and emerge in a better off position than their rivals. An example of a brand that has got it right is Singapore Airlines. Statistically the airline provides no m ore legroom than any other carrier. Yet in survey after survey flyers consistently vote Singapore Airlines the best carrier. Could this be in part due to the branded fragrance that has been subtly infused in all its planes? This smell is integrated into the hand towels and sprayed in all the cabins before passengers’ board. The reason is that smell has a direct emotional impact on consumers, bypassing the rational part of the brain, making consumers feel good. A branded fragrance – now isn’t that cheaper than paying a celebrity? The celebrity’s role is the most explicit and profound in incarnating user associations among the above mentioned points. To comprehend this, let us a nalyze the multiplier effect formula for a successful brand: S=P * D * AV

Where S is a Successful Brand

P is an Effective Product

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channel of communication rather than just a celebrit y endorsement. When all other steps in the branding process is followed and implemented, then channels s uch 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. There are hundreds of well known examples of celebrity endorsements, most of which were hugely successful due to proper endorsement strategy. Italian luxury brand Versace has used music icon Madonna and Hollywood stars Demi Moore and Halle Berry in its print adverts between 2005 and 2006. Likewise Julia Roberts appears in Gianfranco Ferres adverts, Sharon Stone in Dior and Jennifer Lopez, Scarlett Johansson, and Um a Thurman in Vuitton ads. Also, non-luxury brand Gap has used television st ar Sarah Jessica Parker to promote its brand in the recent past. Similarly Catherine Zeta Jones for T-Mobile, Emmitt Smith for Just For Men, Jason  Alexander for KFC. In India, probably the first ad to cash in on star power in a strategic, longterm, mission statement kind of way was for Lux soap, a brand which has, perhaps as a result of this, been among the top three in the country for much of its life-time. In recent times, we had the Indian cine star Shahrukh Khan – Hyundai Santro campaign with the objective of mitigating the impediment that an unknown Korean brand faced in the Indian market. Think of great cricket star Sachin Tendulkar. He means Pepsi in soft drinks, Boost in malted beverages, MRF in tyres, Fiat Palio in cars, TVS Victor in two-wheelers, Colgate Total in toothpastes, Britannia in biscuits, Visa in credit cards, Airtel in mobile services and Band-aid. Businesses have long sought to distract and attract the attention of potential customers that live in a world of ever-increasing commercial bombardment. Everyday consumers are exposed to thousands of voices and images in m agazines, newspapers, and on billboards, websites, radio and television. About 20% of U.S. ads feature celebrities (Solomon 2009), and the percent of ads using celebrities in other countries, such as J apan, is thought to be even higher.

Research Objectives Objective of this study was to reveal and re-establish the positive impact of celebrity endorsement on brand image and find out the most prominent factors those play the key role in the success of

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Literature Survey This paper uses a wide range of accepted principles of how consumers brand attitudes and preferences can be influenced, how buyer's behavior can be influenced, how buyer's behavior can be molded. The principles of credibility of source and attractiveness, the match-up hypothesis, the consumer decision-making model and the communication model ar e taken into account to understand the endorsement impact. Study reveals that the impact of celebrity endorsement is proportional to the 20 factors discussed in the model. The success of a brand through celebrity endorsement is a cumulative effect of these attributes. 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. It is also important to appreciate that just because an individual is famous and considered a celebrity, he/she might not necessarily be an effective endorser.  As companies invest large sums of money in celebrity endorsement contracts, any celebrity endorsement relationship must contribute to larger marketing strategies (Erdogan and Kitchen 1998). Accordingly, campaigns involving celebrities are believed to bring more positive results if they are properly integrated than traditional non-integrated campaigns (Bertrand and Todd, 199 2; Rogers, 1997). In order to discover what advertising agency managers think about integrating campaigns involving celebrities, they were asked to give their opinions on the issue. Traditional explanations of celebrity endorsement persuasion effects are based o n the source effects literature and find that 1) celebrity endorsement increases the attention paid to an ad (Buttle, Raymond, and Danziger 2000); 2) celebrities are generally attractive, which helps persuasion when consumers are worried about social acceptance and others’ opinions (DeBono and Harnish 1988) or when the product is attractiveness-related (Kahle and Homer 1985, Kamins 1990); 3) celebrities may be credible sources if they have expertise in a particular area, such as an athlete endorsing shoes (Ratneshwar and Chiaken 1991) or a beautiful model endorsing make-up (Baker and Churchill 1983); and 4) celebrities are often well-liked, possibly leading to identification and consumer persuasion in an attempt to seek some type of relationship with the celebrity (Belch and Belch 2007). In traditional dual process models (e.g. ELM; Petty, Cacioppo, and Schumann 1983), celebrities are most often considered a periph eral cue: they are important in persuasion only when consumers are not involved in the product category or in processing the

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6. Endorsement 7. Aspiration 8. Awareness

The Top Rated New York Celebri ties Overall Name Rank Appeal Influence

Micheal J Fox Tom Brokaw Whoopi Goldberg Drew Barrymore Robert De Niro Paul Newman Donald Trump Martha Stewart Chris Rock Katie Couric

Trust

4 14

87.3 80.3

76 75

75.9 73.5

21

75.3

66.1

63.7

27 29 70 103 118 159 192

78.6 84.3 84.5 55.5 55.5 75.1 71.4

69 71.8 70.9 65.1 60.2 69.9 67.6

63.9 68.2 73.7 53.5 46.7 60.6 63.9

(From http://nymag.com/)

ICM Research interviewed a random sample of 1,000 adults aged 18+ by telephone on February 22-24th, 2002. Interviews were conducted across the country and the results have been weighted to the profile of all adults. A third (32%) of those surveyed by ICM say that celebrity endorsement makes them feel more positive towards retailers. This rises to 59% among 18-24 year olds while those aged 65+ are less moved at 9%. However, one in five (22%) say that it makes them feel less positive (rising to 32% among 65+'s).

% of age group s that w atch online/mobi le video once a w eek or mo re 40% 30% 20% 10% 0% 16-20

25-34

35-44

45-54

Sour ce :BBC/ICM

55-64

65+

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branding process both in terms of gaining and keeping attention and in creating favorable associations leading to positive brand knowledge and distinct brand images.  As statistical proof, Nike golf balls, since the company signed Tiger Woods in 1996, have seen a $ 50 million revenue growth. Nike's golf line grossed more than $ 250 million in annual sales. In 2000, he re-negotiated a five-year contract estimated at $ 125 million. The Jamie Oliver deal with Sainsbury was said to have resulted in an extra £1 billion in sales. Gary Lineker and assorted celebrity chums pushed Walkers Crisps profits up by 105%. Indian Titan Watches used another leading Bollywood icon Amir Khan to endorse the brand. The campaign helped Titan ach ieve a growth of 45% in volume sales and 52% in value. According to Pooja Jain, Director, Luxor Writing Instruments Ltd. (LWIL), post-Bachchan Parker's sales have increased b y about 30 per cent. Lord Sharman, chairman of Aviva, defended the move arguing that the company's brand awareness had grown from 35% to 80% as a r esult of the TV ads, created by Abbott Mead Vickers, feature celebrities who changed their names before becoming internationally recognized. Microsoft armed with extensive advertiser and publisher portfolio, BAT conducted a study where ad campaigns featuring (video and still) im ages of athletes were tested against the same ads with no endorsement, the study found: 

 A 180% increase in unaided brand awareness, highlighting the ability of endorsement ads to fundamentally "register" with consumers;



 A 56% improvement in message association, where participants correctly absorbed the attributes of tested products and services;



 A 39% improvement in brand favorability, demonstrating how positive associations about an athlete carry over to brands;



 A 27% increase in purchase intent, a measure that speaks to brand and behavior goals.

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200

180

180 160 140 120 % of Increment

100 80 56

60

39

40

27

20 0 Brand  Aw areness

Brand Brand  Association Favourability Impact Area

Purchase Intent

"In 2001, 25% of all advertising dollars were spent on ads carrying celebr ities. In 2008, that percentage has gone up to 60% of all ad dollars spent," exclaims Percept's Porwal. There has been a 49% growth in celebrity endorsement advertising volumes on just TV during the year 2007 as compared to the previous year. There were in total 745 celebrity endorsements in 2007 as against 499 in 2006. Today, the celebrity endorsement industry is worth INRs.550 crore and is growing at high double digit growth rate ranging between 60- 80%. Experts predict the growth rate to touch even triple digits, soon. Sanjeev De, agency head, Saatchi & Saatchi Delhi, also expresses his need for statistics in this regard as, "There is a great deal of science involved in picking-up a brand ambassador and it cannot function without that."  A typical super-market in USA displays more than 12000 brands, an American family has at least one television set and a co nsumer is exposed to around 1000 ads p er day. Likewise, there are around 130 television channels in India broadcasting over 3 million television commercials each year in India. The media-explosion can thus be easily demonstrated. More over, people forget 80% of the information in just 24 hours! Just imagine the plight of the marketer to make his brand shout over the deafening clutter of all the brands! Some where in the 80's, Indian marketers found the solution, 'Celebrity Endorsement' for the brand! (Sanyukta A. Kulkarni Sahir U. Gaulkar, 200507).

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and positive perception of the celebrity in consumer minds (Choi & Rifon, 2007). Credibility is the most important criteria in choosing a celebrity endorser by the firm which is followed by familiarity and likeability and at last we have gender, and in credibility expertise is the most important piece which is followed by trustworthiness and than attractiveness (Knott & James, 2004). The celebrities that were perceived as having constant media coverage are trusted more than the celebrities who are not in the constant spotlight (Friedman, Santeramo, & Traina, 1978). To site one of the most successful campaigns in which the celebrity's credibility has had an indelible impact on the brand and has saved the brand is of Cadbury's. After the worm controversy,  Amitabh Bachchan's credibility infused into the brand through the campaign, helping it to get back on track. Research conducted by social psychologists over the past 30 years demonstrates that a source perceived as highly credible is more persuasive than a low credibility sender (Hovland and Weiss, 1951; McGuire, 1969; Hass, 1981). The sources that companies use to present their advertising message typically attempt to project a credible i mage in terms of competence, trustworthiness or dynamism.

5. Celebri ty Values Celebrity branding is all about the transfer of the value from the person to the product he endorses or stands for. There are two concerns here. The first is how long this could last. Can the person maintain his popularity? Another concern is his private life - personal integrity. If he is implicated in any kind of scandal, that would ruin the brand. "Who would want to use Michael Jackson to brand their product?" (brandchannel.com). Amitabh Bachchan & Shahrukh Khan campaigning for Pulse Polio or Aishwarya Rai appeari ng in the Donate Eyes campaign are few examples, which reflect the transfer of celebrity values to the brand, creating an impact that generates recall.

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attractiveness as well as interaction of likeability, involvement, and sex on the recall of the product.

7. Celebrity Regional & international Appeal Factors In a market with a very high proliferation of local, regional and international brands, celebrity endorsement was thought to provide a distinct differentiation. While selecting an endorser its regional effect always comes into play. W here as while going global, the celebrities should be chosen in such a way that can create a global overall impact. In this respect, a planning director believed that celebrities with international recognition were m ore valuable internationally than nationally as the need for instant shorthand is greater in the international arena. F or example, Jack Dee and John Smith’s no nonsense straight-talking pint of beer campaign would not m ake sense in countries where Jack Dee is not known due to the fact that Jack Dee would be seen as an ordinary consumer. Developing international campaigns was deemed to be a difficult task because of cultural differences. An interesting example would be of Steve Waugh campaigning for Tourism Australia in India since he was one of the popular celebrities f rom Australia.and could carry the messge of Australia as a tourist destination. Other celebrities lik e Kylie Minogue,

8. Celebrity Controversy Risk  Association of the celebrity with a controversy or ill-behavior can cause negative impact to the endorsements. Any act on the part of the endorser that gives him a negative image among the audience and goes on to affect the brands endorsed. The brand, in most instances, takes a bashing. Siyaram Silk Mills Ltd. (Siyaram), one of India's leading textile companies, was also affected badly by South African Cricket Captain Hansie Cronje match fixing controversy. Ann

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Baker, Using multiple celebrities or a single celebrity partially depends on the time scale a campaign is using to have impact.

10. Costs of Acqui ring the Celebrity Companies must have deep pockets to be able to afford the best available celebrities. Recently, a newspaper report showed how cola firms had gone beyond their a dvertising budgets to get the best celebrities. Small firms that use celebrities' services run greater risks if they invest large amounts. Although nobody is willing to sa y exactly how much celebrities get paid, industry sources say Indian cricketer Sachin Tendulkar's price is believed to be between Rs. 2.0-2.5 crore per endorsement, and Oscar winning musician A. R. Rehman, who had signed up with AirTel, is believed to have picked up Rs. 1.75 crore.

11. Fit with the Advertising Idea Marketers now seek to adopt 360 degree brand stewardship in which the brand sees no limits on the number of contact points possible with a target consumer. Advertising ideas, thus, revolve around this approach, and the celebrity endorsement decisions are made through these strategic motives. One of the most successful celebrity endorsement campaign which reflects the fit between the brand and the 360 degree advertising fit is Richard Gere's recent endorsement for VISA in India has gained acclaim due to its innovativeness and consumer connect. Brand marketers say that research reveals that Richard Gere was the most popular face across the Asia Pacific region, and would also fit into the persona of the brand meeting their communication objective to enhance VISA's brand leadership and consumer preference, and the motive to continue the "All it Takes" empowerment platform featuring international celebrities. Celebrities do

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