Celebrity Endorsement gone bad
In todays society there is a heightened interest towards using celebrities to promote a particular product or brand and its positive effects are increasingly being recognized - Celebrity Endorsement gone bad introduction. Every year companies spend millions of dollars on endorsement contracts to align their brand and themselves with endorsers (e.g. celebrities).1 “When you have nothing important to say, get someone very important to say nothing for your brand.”2 The reason why celebrity endorsement has become an important role in the advertising industry is that businesses have realized that it is indispensible using celebrities if they wish to achieve a competitive advantage. “Strong, unique and favorable brand associations” help companies differentiate their products from those of competitors.3 Celebrities in Advertising can be traced back to the 19th century.4 Taking a closer look on advertising we find ourselves surrounded by celebrities. Approx. 25 percent of all televised commercials feature celebrities in their advertising campaign.5 But not only television is a popular medium for promoting a product – magazines, newspapers and the Internet are staring them as well. The aim behind pursuing such marketing strategies is to gain attention, high brand exposure, interest, desire and action.6 The consequence is a positive influence of the advertised product through a celebrity and eventually a favorable effect on the brand image.7 While the benefits of using famous people as endorsers can be very appealing for companies, it is not without potential risks.
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Choosing the wrong celebrity can backfire and bring a huge financial downsize to the company. Negative information and publicity concerning the celebrity is one of the major risks associated with celebrity endorsement.8 For instance Tiger Woods jeopardized his endorsement contracts with several brands (e.g. Nike), when he was involved in negative publicity for having several relationships with women in 2009.9 There are other circumstances, which may lead to negative impact of celebrity endorsement such as multiple endorsements, the sudden image change of an endorser or a drop in popularity.10 These various types will be explained later in the paper. Negative Endorsement suggests new questions concerning the consumer behavior and how consumers respond to it. Considering the given background, the purpose of this paper is going to be about the impact of negative celebrity endorsement on consumer buying behavior. The aim is to investigate whether consumers take notice of negative events and will be influenced not to buy the endorsed product due a lack of credibility or remain a strong relationship towards its Idol and disregard the negative publicity. Stating the thesis: There is no major impact of negative endorsement regarding the consumer buying behavior. In the following there will be a literature review on celebrity endorsement, defining its territory and explain the effects on celebrity endorsement. Going on there will be a chapter about celebrity images and their influence on the consumers. After that the paper aims to introduce several models on celebrity endorsement for choosing the right celebrity, followed by the most crucial part, the negative effects on celebrity endorsement with given examples and the discussion whether negative endorsement is relevant for the consumer buying behavior or not.
2 Celebrity Endorsements: The Conceptual Framework
Over the past few decades much research has been done on the phenomenon of celebrity endorsement and a great number of authors attributed to the subject, each with different issues. Therefore there is a broad literature of general celebrity endorsement. You often find names such as McCracken (1989), Erdogan (1999), Atkin and Block (1983) and Kamins (1989) on the topic of celebrity endorsement. Negative Aspects of celebrity endorsement are written down as well but to a lesser extent. The main reason for choosing this topic is based on the lack of literature about the consumer aspect on negative celebrity endorsement.
1.1 2.1 Defining the Territory
This chapter intent to review the existing literature done on celebrity endorsement in order to get a better understanding of the research area. Primarily it concentrates on the concept of celebrity endorsement and clarifies its territory by giving relevant definitions.
1.1.1 2.1.1 Celebrity
McCracken (1989) defines celebrities as “well known individuals, who receive significant media attention”, such as any public figure that are depicted in the mass media. Those public figures include actors, athletes, musician, models, authors etc.11 Furthermore he refers to their “distinctive attributes such as attractiveness and trustworthiness”12 Friedman and Friedman (1979) support McCracken’s definition by adding that one of the most important quality of being a celebrity is “not being forgotten and known by people” for being a public figure.
1.1.2 2.1.2 Celebrity Endorser
Added to the definition of “celebrity” a celebrity endorser is described as “any individual who enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing with it in an advertisement”13 According to Atkin and Block there are several reasons why a well known endorser may be influential. To be effective a celebrity endorser should be credible and attract attention to awake the purchase intention of the target group to buy the endorsed product.14 Friedman and Friedman (1979) found empirical evidence that the practice of using celebrities to promote a product psychological results in greater believability for the end consumer.15 Agrawal and Kamakura have been citied, that as soon as a celebrity is tied to a brand, the image will be transferred to the brand in the mind of the consumers.16
1.1.3 2.1.3 Celebrity Endorsement
Celebrity Endorsement has been well established as marketing and communication strategy in todays’ society.17 As McCracken states in his empirical research endorsement is a “ubiquitous feature of modern marketing”18 Celebrity endorsement can be a powerful “device” by which to enter foreign markets. Using a worldwide known celebrity may help companies to break through “cultural barriers”, such as time, power and language. Therefore it is more likely for a company to gain more attention and getting a greater audience all over the world.19 Quoting a UK marketing report, Erdogan (1999) says using celebrities in advertising was a “key to gain national headlines”.20 Erdogan quotes a Marketing report, saying that using celebs in advertising was a “Key to gaining national headlines.
1.2 2.2 The Effectiveness on Celebrity Endorsement
“A sign of a celebrity is that his name is often worth more than his services.”21 This Quote by Daniel J. Boorstin reveals already the impact a celebrity has on a potential product or brand. We live in society, which is influenced by public figures and we want to be like our Idols and tend to imitate them. The influence of celebrity images on consumers will be further discussed in the next chapter. Yet it is well established that firms use celebrities to achieve a competitive advantage.22 Therefore marketers and advertisers react on this threat by using endorsers as marketing strategy. There is a broad literature on the effectiveness of celebrity endorsement. Due their well knowingness, celebrities help advertisements to “stand out from the surrounding clutter” by appearing in them.23 Furthermore companies benefit from endorsers by grabbing the consumers attention.24 In addition to that celebrities help to have a better recognition of the brand and consumers remember the message of the endorsed product.25 Seen from a financial perspective it is safe to say that celebrity endorsement contributes to an improved stock market value of the firm.26 Hiring a public figure to promote a brand may also help improving the image for a “tarnished” company. There out it may benefit in restoring or refurbishing a company’s image.27 These are just a few effects resulting from the special feature of celebrity endorsement.
3 Selecting the “right” Celebrity: Models on Celebrity Endorsement
To link to and reinforce the just given theory, there are several models on the effectiveness of celebrity endorsement which will be shortly described in the following. The benefits of celebrity endorsement may be explained using different perspectives:
3.1 Source Attractiveness
McGuire (1968) set the foundation of the source attractive model, stating that the effectiveness of a celebrity endorser depend on “similarity with consumers, familiarity among consumers and likeability”28 Likeability is measured by the affection of the celebrity’s physical appearance or behavior, while similarity correlates to the likeness between the source and the consumer.29 Based on the research in social psychology30 advertisers choose celebrity endorsers on the foundation of their attractiveness “to gain dual effects of the celebrity status and physical appeal.”31
1.3 3.2 Source Credibility
While the source attractive model proposed the endorser’s effectiveness on similarity, familiarity and likeability, the source credibility model suggests that the effectiveness of a message depends on the expertise regarding the product, the trustworthiness in an endorser and the physical attractiveness.32 The model refers to a “communicator’s positive characteristics that affect the receiver’s acceptance of a message.”33 According to Kelman (1961), the exchange of information through a credible source has the potential to influence beliefs, opinions, attitudes and behavior through a process called internalisation.34
1.4 3.3 Match Up Hypothesis
According to the match-up hypothesis, the effectiveness of celebrity endorsement relies on the relationship between the endorser and the product. In order to transmit a positive effect, the product and the endorser need to be congruent.35 The product match-up hypothesis suggests that the celebrity and product should complement each other for effective advertising.
1.5 3.4 Meaning Transfer
In his Journals of Consumer Research (1986/1988/1989) McCracken proposed a three-step meaning-transfer model to prove that celebrities possess unique sets of meanings, which might be transferrable to the products endorsed by them.36 In step one, meanings are combined to form the image of the celebrity. In step two, those meanings are transferred to the brand.
In step three, the meanings are transferred to the consumer through their consumption. (See Figure 1, p. 10) The meaning transfer model suggests that celebrity endorsers bring their own symbolic meanings to the endorsement process.37 The cultural meanings “residing in a celebrity” go beyond the person and passed on to the products they promote. There are a variety of meanings a celebrity holds on to. Differences in “status, class, gender, age and personality, as well as lifestyle” are just a few examples on meanings a celebrity can transfer. 38 Eventually Advertisers and firms need to choose the right celebrity, who carries the right meanings onto their product and choose with who and what they want their brand to be associated with.39
Figure 1: Meaning Movement and the Endorsement Process (Source: McCracken (1989))
4 Celebrity Influences through Images
After giving a detailed review on the basic principles of celebrities used as spokesperson for a brand or product, this chapter aims to concentrate on the consumers and the influences predicted through celebrity images. Therefore it will outline the relationship between famous public figures and their impact on consumers. Moreover it will give a closer inside on the topic of fans and fandom and how the audience perceives celebrities that are stared in the mass media. The American culture is based on consumerism. Ads are shown everywhere – television, movies, magazines and tabloids are just a few to mention. On top of that, in every fourth advertisement a celebrity is shown and celebrity images are pasted all over them.40 No wonder why the “American culture can be characterized by its obsession with celebrities”.41 Public figures range from the sports department, across the movie business to the fashion industry. Celebrity endorsers in fact, are already media favorites due to their mass appeal and the audiences feel like they personally know these famous personalities.42 In Literature Para-social interaction is described as term, in which we respond to a media figure as though he/ she/ it were a real person. The most common form of this kind of relationship are one-sided relationships between celebrities and the audience or fans.43
Once the audience is infatuated with their idols, they are likely to buy the products their idols promoted.44 According to Henry Jenkins a person is a fan “not by being a regular viewer of a particular program but by translating that viewing into some type of cultural activity, by sharing feelings and thoughts about the program content with friends, by joining a community of other fans who share common interests”45 Translated into the world of celebrities, “fans” try to imitate their idols. But why are we caught up in the life of a celebrity? What is the sensation of a star that attracts us so bad? One answer is that these public figures are “someone to aspire to become”.46 Staiger relates to the question by saying a fans goal is to “match a persona to private life”47 On the one hand side we want to achieve that social status these characters have achieved or are born into. On the other hand we enjoy the fact, that they are human beings just like everyone else with edges and corners. Marketers and Advertisers are well aware of the described phenomena and take advantage on this kind of fandom by spending every year huge amounts of money and investing it in celebrities to promote their brand or product.48
The positive effects of celebrity endorsement have been already carried out earlier in the given literature review. Yet it might be important to find a connection between the effects and the consumer behavior resp. the consumer purchase intentions. Celebrities bring their own distinctive images to an advertisement and its associated brand and can “create, enhance and change brand images”.49 Furthermore it has been well investigated that celebrities bring credibility to advertising messages. With their “high” profile, wide recognition and unique qualities, “celebrities in general are perceived more credible than non-celebrity endorsers, exerting greater influence on consumers’ brand attitudes and purchase intent”.50 With regard on the thesis of this paper and the assumption that there is no major impact of negative celebrity endorsement concerning the consumers’ buying behavior, the theoretical framework was giving, models on celebrity endorsement have been explained and the connection between celebrity images and the perception of the audience have been made, the last part of this paper will concentrate on the negative effects on celebrity endorsement. The last chapter plays a crucial part because yet the assumed thesis can’t be validated nor unverified without taking a closer look on negative celebrity endorsement.
5 Implications and Limitations
Despite the various benefits of celebrity endorsements, there are still many potential risks involved in using celebrities to endorse their products as part of a marketing communication strategy for a company. This chapter deals with the topic of negative celebrity endorsement and its potential hazards. Based on three specific negative effects, the subject will be explained and further discussed.
1.6 5.1 Negative Effects of Celebrity Endorsement
Negative Information and publicity concerning the celebrity is one of the major risks associated with the celebrity endorsement.51 Sometimes celebrity endorsement can backfire due several factors, for instance suddenly image change, a drop in popularity, moral issues or a lack of credibility caused by over endorsing. This negative information not only have a great impact on the perception of consumers’ but also on the endorsed product.52 In fact many companies have paid a big price over celebrity wrongdoing, not referring to the potential financial returns it may cause.53 In the following negative effects will be described with the aid of two examples: multiple endorsement and second, celebrities being involved in a negative incident or scandal.
1.6.1 5.1.1 Multiple Endorsement
Multiple Endorsement refers to two different kinds of events, first, one celebrity endorses multiple brands at a time (i.e. Michael Jordan has endorsed products for 14 companies54), and second, one brand is endorsed by multiple celebrities at a time (i.e. Nike or Adidas staring several stars in Advertising55) Multiple endorsements are shown as a potential negative effect because it raises the question on how consumers respond towards the advertising, concerning the transferred meanings. The event of multiple endorsements could provoke confusion for the audience. Adopting McCracken’s (1989) models on credibility and attractiveness, consumers’ might perceive the celebrity as less credible and less likeable.56 Yet Tripp et al. (1994) admits, that there is less empirical evidence on the subject of the consumers’ reaction towards multiple endorsements, which could be investigated in future research.57 Nevertheless assumptions can be made, which are supported by the study of Tripp, Jensen and Carlos (1994). “Based on the preceding discussion of multiple endorsements, source credibility, and liking, the following hypothesis were developed: H¡ – As the number of products endorsed by a celebrity increases, consumers’ (a) perception of the celebrity’s credibility (i.e. trustworthiness become less favorable”58 The study revealed two noteworthy findings, saying “first, the number of products a celebrity endorses negatively influences consumers’ perception of endorsers credibility and likeability, as well as attitude toward the ad.”59 In the case of Michael Jordan, there are no solid arguments, that multiple endorsements had a major negative impact neither on his career, nor on his contracts with the firms/ brands being endorsed. Anyhow it could be argued that “fame” could play a crucial part evaluating the perception of consumers’. Michael Jordan has been playing in the top league for decades now, doubting multiple endorsement deals will make him less credible nor likeable. Still the greatest fear marketers while using multiple celebrities is that today consumers are more aware and educated about the use of celebrity endorsement. The consequence could be general compensation for the celebrity.60
1.6.2 5.1.2. Celebrities being involved in a scandal or negative incident
Another negative effect, which could result a downside for a firm, are celebrities being involved in a scandal or an negative incident. Celebrities are overshadowed 24/7 by paparazzi, and once in a while celebrities can be i.e. photographed in an unfavorable position or something out of their private life leaks to the press. A Scandal can cause the image of celebrity, especially since tabloids tend to exaggerate most of the times. Anther potential hazard could be a drop in popularity. According to James Lull and Stephen Hinerman a media scandal “occurs when private acts that disgrace or offend the idealized, dominant morality of a social community are made public and narrativized by the media, producing a range of effects from ideological and cultural retrenchment to disruption and change”.61 Several studies found out, that negative information on a celebrity endorser not only influences consumers’ perception, but also the endorsed product.62 The recent scandal surrounding Tiger Woods, a professional golf player caught, having several relationships with women and cheating on his wife resulted in bad publicity. By September 2009, Fortune Magazine reported that his career was on the peak, earning a ten figure number and having attractive endorsement deals with i. a. Nike, AT&T and Gilette.63
Once his several affairs have been flogged to death, Woods took a absence on the golf game, justifying he needs to “focus on being a better person, husband and father” […]64 The consequences for Woods abrupt absence of leave caused him his endorsement contract with AT&T and Accenture, a global business consultancy agency. In contrast Nike and EA Games decided to continue the endorsement relationship with Woods.65 These two different decisions show that there is no right or wrong in handling negative effects of celebrity endorsements. Its in the hand of the firm, deciding whether a celebrity is credible and attractive enough to continue the partnership, or if its better to end the partnership due bad publicity. Applied on the firm, same goes for the consumers’. If they’re connected to a star and build up a relationship it is likely that there is no change in perception. Are specific morals and values violated, it is likely that the celebrity is seen less credible and less attractive.
Many companies and big brands have recognized the importance on celebrity endorsement as a marketing communication tool. Celebrity endorsement is a million dollar industry in todays’ era. Summarized, the paper aimed to find relevant literature on celebrity endorsement, especially on negative endorsement to be able to respond to the given thesis: “There is no major impact of negative endorsement regarding the consumer buying behavior.” With that in mind it was first necessary to put celebrity endorsement into a theoretical framework to get to know the field of celebrity endorsement before slowly getting to the actual topic. Key finding in the paper was that the thesis can be validated due the fact, that of course consumers’ perception can always be influenced and lead to less credibility and attractiveness, which chapter 3 helped to evaluate after reviewing the references. Yet chapter four was decisive in supporting the thesis. Diving into the literature of celebrity influences through images, and taking a closer look on the consumer by exploring the field of fans and fandom and how the audience perceives celebrities that are stared in the mass media. A true fan is unlikely to change his perception when it comes to an event of an negative incident, unless moral values are affected. It is more likely for a fan to build up a tighter relationship in hard times, explaining the para-social interaction between celebrities and the audience. Considering the broad literature review that played a major role in this paper, there is a gap for further research open, which could take greater emphasis on consumers, which aren’t as much attached as fans to celebrities.