Impact of Celebrity Endorsment

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IMPACT OF CELEBRITY ENDORSEMENTS ON OVERALL BRAND

Successful branding programs are based on the concept of singularity. The objective is to create

in the mind of the prospect the perception that there is no other product on the market quite like

your product."

Al Ries & Laura RiesIndian advertising started with the hawkers who used to call out their wares right from the days

when cities and markets first began. Since then, Indian advertising has metamorphosed into a

strategic tool that enhances sales, siphons more profits and helps in the process of brand-building

and product promotion. With this evolved a strategy that tried to benefit from the emotional

attachment of the admirers or the fans of the celebrities; in the form of celebrity endorsement. It

does help in creating instant awareness and visibility; but for a cost.

This paper tries to look beyond the obvious benefits that might be derived out of celebrity

endorsement. It tries to understand the process of consumer psychology and impact of celebrity

endorsement on the overall process of brand building. The in-depth study of various models

brings to light the complexities pertaining to celebrity endorsement. Analyzing its success is as

much a necessity as is the understanding of its need. The importance of celebrity management

has been emphasized to realize success or failure in its true sense. A symbiotic model has been

proposed to define: how to make celebrity endorsement a win-win situation for both the brand

and the brand-endorser.

"Brand" is the most valuable asset of any firm. Any thoughtless adventure can be like the

Sword of Damocles. It's the "strong idea" of promotion which is a more strategic means of

brand-building; which can be an economical alternative over celebrity endorsement.

"It doesn't matter how new an idea is; what matters is how new it becomes."

- Elias Canetti If you're trying to persuade people to do something, or buy something, it seems to me you should

use their language, the language in which they think."

- David Ogilvy

Introduction

If the world were full of all wise men and all wise women; we would have never heard of a term

called "advertisement" . And then good products would have found the right customers and

grown to prosperity. Firms would have worked out a mathematical formula to sell and succeed.

But the buying process isn't rational; and so is this world.

Today, the business firms are trying out different ways in advertisement to increase their sales.

Indians are die-hard movie and sport buffs; and this aspect of the consumers has invited the

concept of "Celebrity Endorsement" to the world of advertisement. The purpose of this paper is



to analyze the role of Celebrity Endorsement in the process of brand-building by taking

appropriate examples from the advertising landscape.

The modern world of marketing communication has become colorful and inundated with

advertisements, and it is hard to get noticed. It is an uphill task for the designer of an advertising

campaign to differentiate itself from others and attract viewers' attention. In this jet age, people

tend to ignore all commercials and advertisements while flipping through the magazines and

newspapers or viewing TV. But even then, the glamour of a celebrity seldom goes unnoticed.

Thus, celebrity endorsement in advertisement and its impact on the overall brand is of great

significance. In this process, the companies hire celebrities from a particular field to feature in its

advertisement campaigns. The promotional features and images of the product are matched with

the celebrity image, which tends to persuade a consumer to fix up his choice from a plethora of

brands. Although this sounds pretty simple, but the design of such campaigns and the subsequent

success in achieving the desired result calls for an in-depth understanding of the product, the

brand objective, choice of a celebrity, associating the celebrity with the brand, and a framework

for measuring the effectiveness.

Definition of Celebrities

Celebrities are people who enjoy specific public recognition by a large number of certain groups

of people. They have some characteristic attributes like attractiveness, extraordinary lifestyle or

special skills that are not commonly observed. Thus, it can be said that within a society,

celebrities generally differ from the common people and enjoy a high degree of public

awareness. Among the classic forms of celebrities, actors (e.g., Shahrukh Khan, Amitabh

Bachhan, etc.), models (e.g., Malaika Arora, Bipasha Basu, etc.), sports-persons (e.g., Sachin

Tendulkar, Sania Mirza, etc.) are significant. According to Friedman and Friedman, a

"celebrity endorser is an individual who is known by the public for his or her achievements in

areas other than that of the product class endorsed". Compared to other endorser types, famous people always attach a greater degree of attention, recall and loyalty.

According to Melissa St. James, a doctoral fellow and marketing instructor at The George

Washington University, "Studies show that using celebrities can increase consumers' awareness

of the ad, capture [their] attention and make ads more memorable."

In this age of intense competition, where capturing a position in the consumers' mind space is

extremely tough, celebrity endorsements give an extra edge to the companies for holding the

viewers' attention. Celebrities can catalyze brand acceptance and provide the enormous

momentum that brands require by endorsing the intrinsic value to the brand.

Important Celebrity Attributes

While selecting a celebrity as endorser, the company has to decide the promotional objective of

the brand and how far the celebrity image matches with it. The selection is in fact a

collaboration, from which both the company and the celebrity gains.

The most important attribute for a celebrity endorser is the trustworthiness. The target audience

must trust that a celebrity carries a particular image and it must match with the product.



The second attribute in order of importance is likeability. The celebrity also must be accepted as

a popular icon by a large cross section of the audience.

Companies use celebrity endorser because they are considered to have stopping power, i.e., a

celebrity can be a very useful tool to draw attention to advertising messages in a cluttered media

environment. The overall popular image coupled with exact product-image match enhances the

consumer attention resulting in greater brand recall.

Similarity between the target audience and the celebrity is the third important attribute. A person

well-known in a society can have greater impact than a celebrity of a different world. If the

endorser and receiver have similar needs, goals, interests and lifestyles, the position advocated

by the brand communication is better understood and received. Similarity is also used to create a

situation where the consumer feels empathy for the person shown in the commercial. The bond

of similarity between the endorser and the receiver increases the level of persuasiveness.

Branding & Celebrity Endorsement

Indian firms have been juxtaposing their brands with celebrity endorsers in the hope that

celebrities may boost effectiveness of their marketing and/or corporate communication attempts.Today, use of celebrities as part of marketing communication strategy is fairly common practice

for major firms in supporting corporate or brand imagery.

What is a Brand?

Jack Welch, the former CEO of General Electric, once said, "Our most valuable assets are our

intangible assets." The intangible asset he was referring to is a brand. The Dictionary of Business

& Management defines a brand as: a name, term, sign, symbol, or design, or a combination of

them, intended to identify goods or services of one seller or a group of sellers and to differentiate

them from those of competitor.

Definition of Celebrity

A celebrity is a person who is widely recognized in a society. Whereas attributes like

attractiveness, extraordinary lifestyle or special skills are just examples and specific common

characteristics cannot be observed. It can be said that within a corresponding social group,

celebrities generally differ from the social norm and enjoy a high degree of public awareness.

Today's celebrities are larger figures from movies (Amitabh Bachchan, Shah Rukh Khan),

television (Larry King, Smriti Irani) and sports (Sachin Tendulkar, Michael Schumacher).

Definition of Celebrity Endorsement

According to Friedman & Friedman, a "celebrity endorser is an individual who is known by the

public for his or her achievements in areas other than that of the product class endorsed." So, in

the Coco-Cola advertisement; actor Amir Khan is the celebrity endorser for the product or brandcalled Coke, and this process is referred to as Celebrity Endorsement.

The Need for Celebrity Endorsement

The charisma of the celebrities almost always entices people and their words are worshipped by

a lot of people. Their influence also goes on the political front, where they are invited for

political endorsement. The business firms, thus, resort to celebrity endorsement to perk up brand



recall and product sales. This has now become a trend and is being perceived as a strategic

means of brand building exercise.

The Elaboration Likelihood Model (EML) suggests that consumers will scrutinize claims more

in important situations (say, life saving drugs) than in unimportant ones. So, for almost similar

products like Coke and Pepsi, it makes sense to use endorsement. Also, Friedman & Friedman

have shown that a celebrity relative to a non-celebrity spokesperson would be more effective for

products high in psychological or social risk, involving such elements as good taste, self-image,

and opinion of others. For example, when actor Shah Rukh Khan endorses Santro-Zip drive; the

consumers are made to think that he is giving his opinion to go for this car.

Two reasons why advertisers need celebrity endorsement are to increase the credibility &

attractiveness of their advertisement. This is solely to affect consumers' attitude towards their

brand. To justify this hypothesis, we can take the example of former Miss Universe Sushmita Sen

who helped the Epson brand of printers achieve instant recognition; even with the established

giants like Hewlett-Packard and Wipro in the running. Similarly, actress Rani Mukherjee has

turned the tables for Bata's ladies footwear brand called Sundrop as sales increased by a

whooping 500%.

The Process of Celebrity Endorsement

The process of celebrity endorsement is more of meaning translation & meaning application. A

deeper insight into this complex process is provided by the following theory.

• The Meaning Transfer Model

McCracken, the author to this model, has suggested that, "The effectiveness of the endorser

depends, in part, upon the meaning he or she brings to the endorsement process." The celebrities'effectiveness as endorsers stems from the cultural meanings with which they are endowed. It is a

three-stage process of meaning transfer that involves the formation of celebrity image, transfer of

meaning from celebrity to the brand, and finally, from the brand to the consumer.

Figure 1: The Meaning Transfer Model



To explain it with the help of an example, we can take the case of Rahul Dravid and Castrol. The

cricket icon is seen as "Mr. Dependable". And when he endorses Castrol, an image of

"dependability" is tagged on to the brand under promotion.

The Importance of Celebrity Management

In a world full of faces, the ones' which bolt from the blue are perhaps of the celebrities. The

advertisers are always on the look out for such faces for the purpose of endorsement. But, the

major challenge before them is to find the right faces for their brands or in other words celebrity

management. McCraken quotes, "In the best of all possible worlds, the marketing or advertising

firm first would determine the symbolic properties sought for the product... It would then consult

a roster of celebrities and the meanings they made available, and taking into account budget and

availability constraints, would choose the celebrity who best represents the appropriate symbolic

properties." This suggests that the image of the celebrity must fit or be congruent with the

product which can be explained from the theoretical perspective using a social cognition

framework.

•Schema-Based Expectancy Theory

A schema is an abstract, cognitive structure that represents some stimulus domain, e.g., a person,

place, event, or thing. It is organized through experience and consists of a knowledge structure.

They can determine what information will be encoded or retrieved from memory. Schemas are

involved in encoding, interpretation, retention, and retrieval of information. They can influence

perceptual cognitive activities through the generation of expectancies. In the case of well-known

celebrities, individual would typically have personal relevant schemas (person schemas),

acquired over time. When a celebrity endorses a brand, the characteristics of that celebrity may

be compared with the advertised attributes of the brand by the audience for congruence or fit

with their available person-schema. The degree of congruence between the new information (the

brand attributes) and the existing information (the celebrity's characteristics) may then influencethe level of recall of the new information.

The Associative Network Model suggests that information inconsistent with an individual's

schema may be quite salient and information will, therefore, be attended to more closely and be

processed more deeply. Therefore, this information would be conceptually linked to a larger

number of items in the memory, compared to a piece of information that is consistent with the

schema.

While the Schema-Pointer + Tag Model proposes that consistent or typical items are encoded in

terms of a "pointer" to a generic schema that contains the typical components and relationships

for that particular knowledge domain. The atypical or incongruent items are, on the other hand,

encoded with a rather distinctive "tag" and stored as a unique, separate unit. This leads to higher

recalling for incongruent items than for typical items. And empirical researches confirm

significantly higher recalling when the image of the celebrity is congruent with the brand image.

Therefore, celebrity management is very important for the success of any brand.

"If commerce is the engine of our economy, then advertising is the spark. Responsible

advertisers are the drivers who keep us on the right track, leading to a richer, more benevolent

society."



- Brian Philcox

Celebrity Selection

There are various scientific ways in which the right celebrity is selected for the product

endorsement, which are discussed here after

• Stereotyping

Tellis defines stereotypes as perceptions and depictions of individuals based on simplistic, biased

image of the group to which they belong, rather than on their own individual characteristics. For

example: its better to select celebrities who say are teens for chocolate advertisements and

females for detergent ads, etc.

• The TEARS Model

The attributes highlighted by the acronym "TEARS" are gauged for celebrity selection. These

are: -

Trustworthiness: For example - Legendary actor Amitabh Bachchan who is an icon of trust;

promoting ICICI Bank.

Expertise: For example - Golfer Tiger Woods for a sports brand.

Attractiveness: For example - Tennis player Anna Kournikova who earns 10 Million dollars

per year in just endorsement.

Respect: For example - Former Miss World Aishawarya Rai and the Eye donation campaign.

Similarity: For example - a child artist promoting a chocolate brand.

A celebrity scoring high on all the above attributes can turn out to be a good endorser for the

brand under question.

• The No TEARS Model

The "No TEARS" approach is a tool for managers and their advertisers how to go about selecting

celebrities so as to avoid the pitfalls from making an unwise decision. It gauges the following

information: -

celebrity & audience match up,

celebrity & brand match up,

celebrity credibility,

celebrity attractiveness,

cost consideration,

a working ease and difficulty factor,



an endorsement saturation factor,

a likelihood-of-getting-into-trouble factor

Selecting the right celebrity does more than increasing sales; it can create linkages with the

celebrities' appeal, thereby adding new dimension to the brand image. Research conducted by

Katherine Eckel has revealed that celebrities can get people to make a better choice but cannot

influence 'people to make a foolish choice'.

The success of celebrity endorsement in India can be sought from a market research conducted

earlier which found that 8 out of 10 TV commercials scored the highest recall were those with

celebrity appearances. A few examples: Sachin Tendulkar - Adidas, Sourav Ganguly - Britannia,

Leander Paes & Mahesh Bhupati - J. Hampstead, Shah Rukh Khan - Pepsi, Sushmita Sen -

Epson, and Aishwarya Rai - Coke.

Framework to Make Effective Celebrity Endorsement Program

With the cut-throat competition and continuously changing market dynamics, one has to assess

the market conditions and re-evaluate its current marketing strategies such as its portfolio of

celebrity endorsement. The action plan should be able to answer the following key questions: -

Are the celebrity endorsements programs result driven?

How to quantify the value generated by the celebrity endorsements?

Are customers able to connect the brand with the celebrity?

Figure 2: Evolution of Celebrity Endorsements



One can gauge the performance of celebrity endorsement marketing program across the various

stages of development (Refer to Figure 2). We have attempted to prepare a framework to build a

more effective celebrity endorsement program: -

1. ALIGN CELEBRITY ENDORSEMENT WITH BUSINESS OBJECTIVES.

The attributes of the celebrity should be intrinsically valuable and aligned with the product,

brand and company. Figure 3 suggests strategies to be adopted by a company depending on its

brand positioning and the brand fit with the celebrity.

Figure 3: Brand-Celebrity Attribute Fit Matrix

• If the brand-celebrity attribute fit is slow, then the company should adopt "Eliminate or

avoid" strategy. The consumers are unlikely to connect between the brand and the celebrity,

and the recall value is likely to be very low; defeating the entire purpose of signing the

celebrity.

This is what happened when Goodlass Nerolac Paints roped in Amitabh Bachchan as their

brand ambassador.

When the positioning of the brand is high but the fit with the celebrity is low, the company

should adopt a "Monitor and evaluate" strategy. The company should continuously track the

effectiveness of the celebrity endorsement through surveys, monitoring the sales, etc. Though

Parker pens had a positioning of premier pens, the early advertisements (Refer Annexure 1) with

Amitabh Bachchan showed low brand-celebrity fit.

When the positioning has not been effective, but the fit with the celebrity is high, the

company should adopt the strategy of "Keep and enhance" . The company has to spot the

opportunities to leverage the celebrity investment and to find more better and effective ways to

communicate with the target audience. The celebrity attributes align with the company's brand,



strategic business objectives and primary customer segment. The Narain Karthikeyan - J K Tyres

relationship works well in this category.

In the ideal quadrant when the positioning effectiveness is high and celebrity fit with the

brand is also high, the company should follow the strategy of "Grow and partner" . In case of

Coke, the brand has firmly established the "Thanda" position in the minds of the consumer, with

Aamir Khan playing the perfect role.

By situating potential celebrity on the matrix, companies can manage the celebrities as portfolios

- re-distributing the resources and marketing efforts to those celebrities with the greatest potential

to increase value, while eliminating those that prove too costly.

2. MEASURE AND QUANTIFY PERFORMANCE

• A part of the marketing budget should be allocated to primary and secondary research to

determine the overall return on investment - measuring the real performance of a celebrity

endorsement against the company's business objectives.

• The company should have proper metrics in place such as increase in sales, brand awareness

and customer preference, to measure the effectiveness and the impact of celebrity

endorsement in the short and long term.

• The endorsement costs are primarily driven by the endorsement fees and promotion outlays.

The benefits that accrue from such a relationship can be categorized into two components:

-

Value of Hard Assets:

The benefits derived from the hard assets are those that have a clear market value such as

increased sales and increase in brand equity. These are the tangible benefits that a company

derives from its endorsement strategy.

Value of Association:

Association value is derived from the target customers who associate the company / brand with

the celebrity. These are the intangible benefits that the company will accrue in the long-term.

There are ways to quantify the potential value of hard assets and association value against their

impact on company's celebrity endorsement by looking at the following catergories: -

Incremental Sales

Companies can quantify the effect of the celebrity programs on sales by performing year-to-

year or quarter-to-quarter sales comparisons for targeted consumers, geographic

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