N0656330_Literature Review_040916

BUSI48710:

In-Company Project

INDIVIDUAL LITERATURE REVIEW

Student number: N0656330

Words count: 3296

Prepared: 18st August 2016

INDIVIDUAL LITERATURE REVIEW| IN COMPANY PROJECT

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Table of content

I. INTRODUCTION .......................................................................................... 3

II. CELEBRITY ENDORSEMENT ON TRADITONAL MEDIA .................................. 3

1. The historical development of Celebrity Endorsement ......................... 3

2. Customers attitude towards Celebrity Endorsement ............................ 4

3. The applicable industry/products categories for CE ............................ 5

4. The pros and cons of Celebrity Endorsement ....................................... 6

5. Models on Celebrity Endorsement Strategy ......................................... 8

III. CELEBRITIES ENDORSEMENT ON SOCIAL MEDIA ....................................... 9

1. Brands in a Social Media Environment ................................................. 9

2. Motives of Fans and Celebrities to Use SNS ....................................... 10

3. Online Celebrity Endorsement ........................................................... 11

IV. CONCLUSION ............................................................................................ 13

V. REFERENCES ............................................................................................. 14

VI. APPENDIX ................................................................................................ 18


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I. INTRODUCTION

Since the nineteenth century, celebrity endorsements (CE) has been used as an effective

advertising tool to support the brand (Hood, 2012 and Erdogan, 1999) (CE - A type of

advertisement that involves a famous person to advocate a brand or product). During more than

two centuries, organisations have invested large sums of money aligning their brands or

themselves with the prospective endorsers (Jyothi et al., 2005). Nearly a quarter of marketing

budget of the UK base commercials utilises for high profile people such as singers or sports stars

(Shimp, 2012).

Scientifically, the use of CE aims to transfer endorsers’ attractiveness and appealing qualities to

the products/brands through marketing and communication activities (Langmeyer et al. 1992).

Based on the endorsers’ fame, the brand could maintain the relationships with the target

audiences; and the brand image/message would be archive the high recall rate (O'Mahony and

Meenaghan 1997). Therefore, the marketers have been marking use of celebrity endorsers widely

for their marketing communication campaigns to target their customers (Hood, 2012).

The recent research has shown that CE is “a two-edged sword” marketing strategy and the

selection an appropriate celebrity endorser plays an important role to ensure the successful of the

brand. This paper explores the CE literature in terms of its development, pros and cons and

customer attitudes towards CE in both traditional media (offline) and social media (online).

II. CELEBRITY ENDORSEMENT ON TRADITONAL MEDIA

1. The historical development of Celebrity Endorsement

CE is an age old concept in marketing and advertising theory (Kaikati, 1987), the advertisers have

applied this tool widely for approximately 200 years. For example, Sherman (1985) points out of

the association of Queen Victoria and Cadbury’s Cocoa is one of the first and most successfully CE

campaign since the late nineteenth century. The development of radio in the 1930s, television,

and cinema in 1950s have extended and improved the concept of CE (McDonough, 1995).

However, at this time the potential endorsers (i.e. famous singers or actors/actresses) did not


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have an awareness of CE, so they are not willing to be the brand presenters and the advertisers

were limited their choices. In the 1970s, the number of film and TV shows has increased so the

marketers had the availability to choose the most suitable endorsers for their brand and the use

of CE has flowered from this time until now in the advertising industry (Speck et al., 1988). The

research claims that the usage of CE in advertising was estimated as one in very six commercials

in the 1970s (Howard, 1979), one in five advertisements (ads) in 1980s (Motavalli, 1988) and one

in four ads in 1990s and 2000s (Shimp, 2012).

Regarding the monetary value of CE, Lane (1996) and Liu et al. (2007) estimate the UK companies

spend more than one billion pounds each year for celebrities (entertainers and sports stars) during

the 1990s and 2000s. These authors also point out the CE is mainly used in the following

advertising activities: spokesperson, endorsement, and testimonial (Lane, 1996 and Liu et al.,

2007). However, the use of CE has changed due to the emergence technology especially internet

and social networks. This issues would be discussed in details later.

2. Customers attitude towards Celebrity Endorsement

Undoubtedly, celebrities have the power to brighten the brands by using their fame to attract the

attention of target audiences. Currently, almost all companies pay money to endorse their brand

with the high profile people, from fast-moving consumer goods to luxury products. Surprisingly,

political parties also use CE as an effective strategy to shape up the opinions of the public during

the election (Veer et al., 2010).

Noticeably, there is limit research which aims to explore the customer attitudes towards the CE

activities of the brands (Veer et al., 2010) but almost all researchers have drawn the same

findings. Due to the intense competition of products having the same features, CE would motivate

and create the customers’ desires to purchase the endorsed products (Khatri, 2006). Anghel

(2009) argues that the celebrities could transfer their charismatic and expertise to the endorsed

brand. Then, they create the higher levels of attractiveness and recalls compared to the non-

endorsed brands. Based on this concept, several companies have successfully emphasized their

completive advantages by association with the celebrities such as Nicole Kidman/Brad Pitt and


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Channel No5 (Fashion Gone Rogue, 2014); Liz Hurley and Estée Laude (Estee Lauder, 2016) or

Taylor Swift and Diet Coca-cola (Olson, 2015).

The experimental research of Koernig and Boyd (2009) figures out that majority of customers

assume the products/brands which are endorsers by the celebrities as the high-quality products

or brands. Khatri (2006) supports that CE has the power to enhance product recall. Moreover, CE

plays an important role to affect the customers’ purchasing decisions process (Ling, 2011). It is

hard to change the consumers’ attitudes towards the brand which they highly involve. Regarding

the low customer product involvement, the endorsed brands by celebrity have more potential to

approach and mould consumer’s views than the non-endorsed brand (Ling, 2011). The main

reason behind these behaviours is CE could fulfil the psychological needs of individuals. Firstly,

purchasing the brand which is endeared by the idol is the proper way for young people to show

their admiration (Temperley et al., 2006). Secondly, people tend to build their self-identity by

associating themselves with the celebrities who have several matched personalities and

charismatic to reflect the customers’ desired self-image (Hosany et al., 2011).

3. The applicable industry/products categories for CE

Recent researchers have pointed out that the use of CE is not practical for all industry (Rafique,

2012). Additionally, the success of endorsers advertising is not only depending on the products

categories but also mainly related to how the advertiser utilise the endorsers for their marketing

and communication campaigns (Friedman et al., 1979). Choosing the appropriate celebrity to

reflect the desires of target customers is the biggest challenge for every company. Therefore,

Kotler (2009) proposes the advertisers should select the endorsers based on their high credibility

and attractiveness, but the most important factor is they must match with the brand personalities/

type of products and have the power to charismatic the target audiences. For example, Paris Hilton

or Donald Trump have their high recognition but due to their negative reputation which not allow

them to be the prospective brand ambassadors. Likewise, Gordon Ramsay is one of the most

famous chefs in the world in recent years, so he also has a positive reputation and wide-scale


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recognition, but it does not mean that he could endorse for every industry such as an International

Peace Conference (Sun, 2009).

4. The pros and cons of Celebrity Endorsement

It is undeniable that CE has some significant advantages, but it also exists several hazards which

the organisations should pay attention to ensure the success of the brand when using this

advertising method (Erdogan, 1999). Table 1 shows various positively pros and cons of using

celebrity as an endorser for the brand as well as proposing some practical prevention-tactics.

Table 1: Pros and Cons of using endorser advertising

Source: Adapted from Erdogan (1999)

3.1. The advantages of Celebrity Endorsement

Increased attention and Brand Introduction - The most significant power of CE is the ability

to generate the attractiveness and draw the attention of customers to the products’

advertisements. As the result, the endorsed brand could stand out from the others competitors,

and CE would logically enhance the smooth, flowing conversations between the target audiences

and the brands (Sherman, 1985). The increase of 400% seals volume of Nike golf sportswear in

2012 after partnering with Tiger Woods (the well-known worldwide golfer) has emphasized the

benefit of CE (Brna, 2009).


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Image polishing and brand repositioning - The usage of CE could prevent the brand image be

polished due to the threat of being “tarnish or discoloured” (Sherman, 1985). The charisma of

celebrity could instantly offer the new personalities to the endorsed products (Dickenson, 1996).

Indirectly, the brand has been repositioned by the effect of the celerity’s fame, and this strategy

allows products reach a wider target market (Miller et al., 2011). Coca-Cola, Adidas or Zara are

the role models which incorporate with different endorsers to keep their brand always being fresh

and attractive (Miller et al., 2011).

Underpin global campaign – there are various difficulties for international corporations to enter

the new market due to the difference of language, culture and customer behaviours (Hofstede,

1984). CE is a practical solution for these international brands to approach the foreign markets.

The new client's group would establish the connection with the new products throw the well-known

celebrities who endorsed for these brands (Mooij, 1994). Clear (the shampoo product of Unilever)

has a pairing with Cristiano Ronaldo (the worldwide recognition Portuguese football players) to

bring their product near to the target customers around the world (Badenhausen, 2016). Similarly,

PepsiCo has increased its global brand awareness by utilising global celebrities including David

Beckham, Beyoncé, and Jordan (Appendix 1) (Klara, 2015).

3.2. The disadvantages of Celebrity Endorsement

Image change and loss of public recognition - There is the strong connection between the

personal celebrity’s brand and the endorsed brands (Cooper, 1984). Specifically, if the endorsers

have any scandals, it would negatively affect customers’ perception of the endorsed products

(Shimp, 2012). For instance, after Tiger Wood scandal, all of the endorsed brands by him (Nike,

Gillette, and Electronic Arts) lost at least 3% market shares. Likewise, EA and PepsiCo lost $5 and

$12 billion revenue because Tiger Wood was the spokesman for these brands at that time (Reuters,

2009).

Overshadow the brand and Public controversy - Rossiter et al. (1987) argue that CE

strategies in some situation could cause more attention to the celebrity than the endorsed brands.

Moreover, the public could be attracted to the embroiled in a controversy between the fans and


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anti-fans of the celebrities. Consequently, the customers could be distracted from the brand being

promoted (Rossiter et al., 1987).

Overexposure – Nowadays, the majority of worldwide celebrities endorse for more than one

brand. Subsequently, the endorsers could be overused and lead to the conflict in the way

customers recall and recognise the brands which are endorsed by the same celebrities. Specifically,

if a celebrity associated with many products at the same time, the connection between the celebrity

and a particular brand would be not distinctive and lead to the potential brand damage (Mowen et

al., 1981). Then, the celebrity’s involvement in multiple endorsement deals, which might confuse

consumers, resulting in a specific brand being swept away along with the crowd of brands endorsed

by a particular celebrity.

5. Models on Celebrity Endorsement Strategy

The source credibility model – this theory mainly explores the key aspects of communicators

that construct a source of credibility and what factors are important than others in different

circumstances (Hovland et al., 1953). Several follow research has figured out two main factors of

credibility which are expertise and trustworthiness (Kim et al., 2007). Erdogan (1999) claims that

celebrities play as credible ambassadors/opinion experts for the brands. Therefore, these

endorsers could help the brands/products approach their target audiences positively. The last five

decades has witnessed the significant change in the marketing perspective from sales orientation

to customer orientation (Amos et al., 2008). This trend also highlights the importance of

trustworthiness or expertise of customers toward the brands/products. Researchers explore CE is

the practical solution to change consumers’ attitude/behaviour and persuade them to try the

products (Premeaux, 2009). Although the source of credibility is the vital factors that organisations

have to consider to select the appropriate endorsers for their brand, it is not the only aspect,

Ohanian (1990) also recommends the advertisers should pay attention to the source attractiveness

of endorsers to ensure the success of CE campaigns.

The source attractiveness model explains how celebrities transfer their likability, attractiveness

and charismatic to inspire and attract the endorsers’ fans (Lafferty et al., 2004). Based on these


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characteristics, the advertisements which are endorsed by celebrities could convert these

endorsers to ‘aspirational figures’ and bring the positive influence on customers’ attitude toward

the brands/product (Till et al., 2000). However, Cacioppo et al. (1983) argue that the

attractiveness could not boost the higher purchase intentions, it just causes the attention of target

audience and builds the brand awareness. This mainly because CE tends to affect the cognitive

and affective aspects of attitudes rather than the behavioural aspects (Baker et al., 1977).

Regarding gender relations between endorse and customers, several reports have found that

female celebrities could create stronger attractiveness than male endorsers across both sexes

(Debevec et al., 1984). Conversely, in cosmetic industry, Till et al., (1998) claim that males show

a higher intention to purchase from male endorsers and similarly to female customers and female

endorsers.

Kim et al. (2007) prove that the attractiveness and credibility would be less important than the

similarity between the products/brands and the endorsers. Specifically, if consumers doubt the

sincerity of the CE, the CE campaign might be not successful (Hsu et al., 2002). Therefore, Bhat

et al. (2001) and Erdogan (1999) propose “The match-up hypothesis” to ensure the congruence

between the entire image of the endorser and overall images of endorsed product/brand (Till et

al., 2000). Consequently, the incongruent between brand and celebrity could directly affect to

customer judgment toward the brand (Ilicic et al., 2013). Finally, the success of CE campaign is

not only depending on three main factors (attractiveness, credibility and the match-up hypothesis

of the celebrity) but also requiring the high-quality products (Callcoat et al., 1996).

III. CELEBRITIES ENDORSEMENT ON SOCIAL MEDIA

Social media is developed based on the foundation of Web 2.0; these platforms allow users to

produce ad exchange their content (user-generate-content) (Kaplan et al.,2010). There are

various benefits of social media compared to other traditional media, since this tool is open,

participated, conservative and connected (Hoffman et al., 2010). Therefore, social media is

forecasted to play the vital role in marketing activities in the next decades.

1. Brands in a Social Media Environment


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In social media environment, the brand could connect directly with is customers in the real time,

blurring the emotional distance between the target audiences and the brands (Jansen et al., 2009).

SNS allow business/organisations set up their channels/pages on these platforms. Each

channel/page could be recognized as a particular brand community where the brand and its

customers could communicate independently and interactively (Jahn et al., 2012). Various type of

communicated methods that brands and customers could use such as post (Facebook) tweets

(Twitter), comment, message, like (Facebook), follow (Twitter) and share (Wen et al., 2009).

Consequently, the brand messages could be spread out virally by the effect of electric-work-of-

mouth (eWOM) (Dholakia & Durham, 2010).

Almost all brand focus on building up the customer engagement for their brand on SNS because

this is the good way to reduce the brand-damaging risks (De Vries et al., 2012). An experimental

study of Facebook has shown that the persuasive content influences social media engagement

significantly to compare with informative content (Lee, 2014). Persuasive content is categorized

into three types: ethos strategies (convince someone by using persuader’s credibility or authority),

pathos strategies (convince an audience of an argument by creating an emotional response) and

logos strategies (persuading an audience by logical reasons) (Lee, 2014). Based on this concept

the use of celebrity endorser to promote the brands/products is the smart way to apply the ethos

strategy in the form of persuasive content (Lee, 2014) to draw the higher customer engagement.

Specifically, the online CE enhances the customer integrate with the brand’s page throw the

attractiveness of the endorsers than the brand message would be spread out to the target audience

naturally (Mohapatra, 2013). Finally, non-customers could be reached through the sharing function

of SNS.

2. Motives of Fans and Celebrities to Use SNS

There are two primary motivations that SNS’s users be addicted by these websites (Raacke et al.,

2008). Firstly, the SNS enable users to keep contact with existing friends and family members

(Subrahmanyam et al., 2008) or make new friends as well as (Wilson et al., 2012). Secondly, SNS

are good channels for users to entertain and reduce bore during the waste time (Ruggiero, 2000;

Wilson et al., 2012). Kim et al., (2010) claim celebrity is a major reason which motivates SNS


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users to integrate with these platforms. Furthermore, the research of Hargittai et al. (2011) figures

out that the high SNS involvement users prefer the “soft news” especially celebrity news for gossip

whereas the low SNS involvement is interested in politics and technology. The Generation Y is

recognized as the most favourable group toward CE (Bush et al., 2004), this is in line with the

findings of several researchers when concluding that CE could create the positive affect and

persuade young people (Generation Y) to perceive the endorsed brand messages positively.

The SNS have blurred the barriers which enhance customers/fans to be closer to their stars and

have the stronger connection to compare to the offline environment, thus possibly improve the CE

effectiveness (Tajfel et al., 1986). Based on these covered reasons, CE is the potential marketing

technique that companies should take into consideration to engage not only existing customers

bust also new customers via online channels (Ha and Hu, 2013). The next part of this report will

discuss in details how to implement CE in the online environment.

3. Online Celebrity Endorsement

In social media environment, people have a significant number of social ties or have the ability to

convince their online community by their great knowledge/experience in specific majors (friends,

fans on Facebook, follower on Twitter or other SNS). These people are called influencers or Key

opinion leaders (KOLs) (Elderkin, 2015). The advertisers aim to target these influencers for their

marketing campaign because the KOLs could ensure the growth of market size and the increase

of brand awareness in particular geography region in the short-time (Goldenberg et al., 2009).

There are three core group of people could be considered as the active influencers including

celebrity, expertise and good taste/quality (who may not currently have a lot of followers or

influence, but who has good taste and is developing an organic following) (Elderkin, 2015).

Currently, almost all marketers focus on celebrities as the prospective influencers due to their

millions of fans on SNS (Cha et al., 2010). For example, Cristiano Ronaldo has more than one

hundred million fans on Facebook and nearly forty million followers on Twitter and him also so

becomes the most expensive athlete sponsorship deal in 2016 (Appendix 1) (Badenhausen, 2016).

The research of Cunningham et al. (2012) has shown celebrity could increase the reach of


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marketing activity on Twitter by thousand times compared to the regular SNS users. Thus, the

usage of CE on SNS could lead to the success of marketing campaign.

There are limit reports that analyse the use of CE in SNS, Pegoraro (2010) discovers that slight

amount of tweets (Twitter) had the promotional content in 2010. Hambrick et al. (2011) estimate

around 5% of social media content was used to promote the products in 2010 and this number

increased to 12% in 2011. These authors draw the same conclusion that SNS (especially Twitter

and Facebook) are the outstanding advertising environment for endorsing product or events

through celebrities. However, endorsed brands have to face various risks in the online environment

such as the products/brands being surrounded by both negative, positive comments or being

overshadowed by the endorsers’ fame (Dittmore et al., 2008). To reduce these risks, the US

Federal Trade Commission has proposed the Guide on Endorsements and Testimonials (e.g.

guidelines on how, when, and how often that could use CE for SNS). Marketers could follow these

ground rules to ensure the success of CE campaign on social networks (Hambrick et al., 2011).

The research of Cunningham et al., (2012) discover celebrity endorsers seem to be more

reliable/trustworthy than experts in the social media environment. The above author also

examines the application of the source attractiveness and source credibility models, as well as the

match-up hypothesis on selecting endorser for online CE campaign. The results recommend that

the selection endorsers must balance between the credibility and the attractiveness of the

celebrities. Regarding non-customers, they would be attracted by the celebrity credibility and this

aspect has a high impact on the perceived brand value of these customers (Zauner et al., 2012).

For existing customers, they already have the strong brand value perception so the attractiveness

of the endorsers would be a good motive for enhancing their engagement with the brands/products

(Zauner et al., 2012).

Jin et al., (2014) conduct the research on the impact of CE on the credibility, purchasing intention

and social identification of endorsed products. The result show that the endorsers who are the pro-

social celebrity (concern about the rights, feelings, and welfare of other people) and having high

number of followers (called the ‘high indegree’), can improve the buying intention and social


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identification of the endorsed products (Jin et al., 2014). Conversely, the anti-social celebrity

resonates with the eWOM effect would draw the negatively perceive attitude of target customers

for products and lower down the credibility of the endorsed brand (Jin et al., 2014).

Table 2 summarises all of the findings are covered above which including general results, the

application of traditional media CE models for social media, the pros, and cons of celebrity

endorsement on online environment.

Table 2: The summarisation of online CE on literature review

IV. CONCLUSION

In fact, celebrity has the power to not only attract the attention of new customers but also improve

the engagement of existing customers (Shuart, 2007).

For traditional media, the long history of CE has shown that there are three main factors which

lead to the successful of the CE campaign including celebrity’s attractiveness, celebrity’s credibility


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and product-celebrity match. The most challenge task that almost all marketers have to face is

selecting the “right” endorsers who have personality, values, standards that totally match with the

endorsed brand image.

The development of social media allows business to communicate with its customers directly

through SNS; CE is still a potential marketing technique which could improve the effectiveness of

marketing campaigns on the social media. Several researchers have applied the CE models of the

offline environment (source of celebrity’s credibility, the source of celebrity’s credibility or match

up hypothesis) for the online environment (Cunningham et al., 2012 and Premeaux, 2009).

Although the results are not very different, it still needs more research which could examine the

effectiveness and the efficiency of implication CE for social media (Cunningham, 2012 and Zauner

et al., 2012).

Finally, CE is the double-edged sword which could bring the brand to the top of the success but

also could damage the brand significantly. Especially, the brand could be destructed shortly by the

effect of eWOM in the online environment.

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VI. APPENDIX

Appendix 1: PepsiCo's five decades of celebrity endorsement deals


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Source: PepsiCo

Appendix 2: Cristiano Ronaldo - the most expensive athlete sponsorship deal in 2016


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Source: dailymail.co.uk


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