The pros and cons of celebrity endorsements

celebrity standing in front of paparazzi

The outcry surrounding the controversial comments made by Alan Jones about Julia Gillard’s father had effects that were far reaching across the Australian business landscape.

Businesses, including Woolworths, ING Direct and Coles were forced to withdraw advertisements on Jones’ morning breakfast radio program after social media campaigns calling for a boycott on their products went viral.

Simply, people were unhappy with Alan Jones and took their anger out on anyone associated with him.

This meant businesses who were paying money to advertise on Jones’ program were finding themselves the victims of consumer backlash. They dealt with threatening emails and their switchboards jammed with the number of people calling to complain. They also had to deal with the fallout after people went online to encourage others to boycott brands unless they cut ties with Jones.

These companies did nothing wrong yet they faced a barrage of abuse simply because, at the time, they were associated with Alan Jones.

Macquarie Radio Network took the unprecedented step of suspending all advertising for eight days (a move rumoured to have cost it $80,000 per day) in a bid to help their abused advertisers disassociate themselves with Jones.

Ahh the perils of celebrity endorsements!

But celebrity endorsements do not always mean bad news for a brand. On seeing an ad where George Clooney walks into a store to buy a Nespresso coffee machine, it took every inch of my will-power not to run to my nearest store and buy one myself. It seems others did not share my powers of restraint with Nespresso owner, Nestle, reporting a 30 percent increase in worldwide sales of Nespresso following George Clooney’s endorsement.

Weight Loss company, Jenny Craig, also reported positive benefits following its celebrity pairing with Magda Szubanski.

Clients often ask if they should consider celebrity endorsements for their brands. Unfortunately, there is no cut and dry answer to this question. It really depends on your business, your budget, the celebrity and the attributes of that particular celebrity.

In choosing a celebrity to endorse your business, it is most important the brand ambassador reflect the attributes of the brand they are promoting.  In some cases it might work to align your business with a controversial celebrity. For example, controversy won’t necessarily damage a youth brand. But it will certainly damage a brand that promotes itself on clean and healthy living.

You will also need to ensure it works with your marketing budget. Depending on the celebrity, an appearance fee alone could cost anywhere between $10,000 and $500,000 and that does not include travel, security and other expenses.  You must weigh up your predicted return on investment before you consider booking a celebrity.

Then, after you have carefully chosen your celebrity, you will need to devise a contingency plan in case something goes wrong. After all, celebrities are only human and it is likely they may trip up along the way – think Shane Warne caught smoking while promoting Nicorette… oops!

As a brand whose credibility has suffered following a celebrity controversy, you should be honest, admit the mistake and then decide whether you want to continue your relationship with the celebrity. Remaining silent may let your audience believe you condone their activities.

Many brands who have successfully done this have gone on to have little if any, negative brand publicity. Some have even continued to have good long-term relationships with their celebrity. After all, Australians tend to forgive celebrities if their misdemeanour is minor.

Will Alan Jones bounce back from this scandal? I believe so. He has admitted fault and apologised to the Prime Minister. Understandably he will lose some initial advertising on his breakfast show, but brands who want to target the type of person who tunes in to him will find his show is a good vehicle to reach them.  And, as we know, people can have very short memories.