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Faculty of       Master in
             Communication    Corporate
             Sciences         Communication




MASTER THESIS, 2009


BEYOND THE
EFFECTIVENESS OF
CELEBRITY ENDORSEMENT
2009
Supervisor: Dr. Patrick Cotting




                                                               Author

                                                        Cristel Garcia
                                                           04-984-704
                                             cristel.garcia@lu.unisi.ch
                                          cristel_garcia@hotmail.com
UNIVERSITY OF LUGANO    BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT                          2009




    I. AKNOWLEDGEMENTS

This Master’s thesis is the accomplishment of my university “journey”. The theme of the thesis arose
during this journey, while knowledge was sent from everywhere inside the university’s walls.
Writing this thesis made me gain knowledge on a subject for me very interesting and important in
today’s society with consumer power.

First of all, I would like to thank my supervisor Patrick Cotting for all support and expertise, and who
has given me valuable guidance.

In addition, I would like to express my gratitude to the managers who gave me a little of their precious
time and who have been helpful in answering my questions with their remarkable knowledge: Roberto
Costa, Head of Advertising & Internet at Swatch; Valérie Bastardoz, Head of Communication at BCV; and
Sandra Helfenstein, Deputy Head Administrative Unit Communication at SFU.

I would like to say a special thanks to my parents and sister, Inês, who always gave me support during
this period of my life.

Finally, I would like to thank all the persons who gave me encouragement and helped me throughout
this period of study: Davide, Sophie, Anne, Adrien, and of course Massimo.

I have a last thought for all my colleagues, who have also accomplished their final work and who have
shared with me their doubts, despair, happiness, and finally pride of having ended the work. Good luck
to everyone.




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   II. EXECUTIVE SUMMARY

This Master’s thesis is a research about one popular marketing strategy: celebrity
endorsement. Indeed, even though celebrity endorsement represents some risks, it is
a largely used method to reach competitive advantage by companies. Today,
companies spend millions each year for the endorsement of their products/services
by celebrities. It is always a great challenge for marketers to determine the meaning
consumers associate with the brand in order to select the right celebrity and to build
the right celebrity endorsement concept. Therefore, it was of a great interest to
investigate this topic further in details.


The initial idea of this thesis has been activated by the lack of information about
celebrity endorsement overall strategy. In fact, there are many factors influencing the
effectiveness of a celebrity endorsement strategy which are not taken into
consideration well enough.


This thesis analyzes existing literature and contains suggestions about the
development of such a strategy taking into consideration all the elements susceptible
to have an influence on its effectiveness.


The approach of this study is first qualitative with the examination of existing theories
and methods about celebrity endorsement. After a literature review research on the
celebrity endorsement concept, findings have shown that there was too much focus on
the celebrity’s attributes selection and not enough focus on the other elements, such
as the company (product/brand), media environment, and customer behavior. Many
factors are an integral part of the strategy as well as the celebrity’s attributes.


Then, the aim of the second part is to consider the gaps in the existing theory and to
create a model able to bring together each factor needed to reach the effectiveness of
celebrity endorsement strategy. The core of the thesis is represented by a suggested
model of the overall celebrity endorsement strategy which should lead to the



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maximization of effectiveness. This model was thought as a solution for companies
willing to reach a successful campaign. The model involves all dimensions and success
factors needed to develop an effective strategy. It was designed with a strong focus on
filling the lack of elements to build an effective celebrity endorsement strategy. These
elements were called the success factors of the strategy. The model was designed on
the basis of an existing sponsorship model, which was an excellent base due to its
marketing roots.


In order to check the feasibility of the suggested model, companies have been
interviewed about their own celebrity endorsement strategy and about the model.
The result of these interviews was positive and showed that companies must consider
all success factors to reach a success campaign. Sometimes, some factors are
underestimated or forgotten, which enhance the importance of using a model as a
step-by-step toolkit.


Moreover, while analyzing the model, another use of the model appeared. Indeed, the
model can also be used as a measurement tool, which is essential for a company after
doing such a campaign. To monitor celebrity endorsement success a set of measures is
proposed.


The aim of the thesis was to try to meet companies’ expectations and needs with a
model proposal which will solve some issues within the whole celebrity endorsement
management.




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        III. TABLE OF CONTENTS



I.         AKNOWLEDGEMENTS .................................................................................................................... 2

II.        EXECUTIVE SUMMARY ................................................................................................................... 3

III. TABLE OF CONTENTS...................................................................................................................... 5

IV. THEORETICAL PART ........................................................................................................................ 7

      1. INTRODUCTION ............................................................................................................................. 8
        1.1 Problem Discussion.............................................................................................................. 8
        1.2 Purpose and Research Questions ................................................................................... 9
            RESEARCH QUESTIONS ................................................................................................................................................................ 9
            HYPOTHESIS ...................................................................................................................................................................................10
        1.3 Delimitations ....................................................................................................................... 10

      2. DEFINING CELEBRITY ENDORSEMENT – LITERATURE REVIEW .......................... 10
        2.1. Definition............................................................................................................................... 10
        2.2. Origins .................................................................................................................................... 12
             THE SPORTS INDUSTRY ............................................................................................................................................................13
             THE BEAUTY INDUSTRY ...........................................................................................................................................................14
             THE MERGER OF BRANDS AND CELEBRITIES ..............................................................................................................16
             THE WATCHTOWER ...................................................................................................................................................................19
             THE FAN POWER ..........................................................................................................................................................................20
             THE VISIBILIY OF CELEBRITIES ...........................................................................................................................................20
             THE CELEBRITY INDUSTRY ....................................................................................................................................................21
        2.4 Existing Theories and Models ....................................................................................... 23
             PROS AND CONS OF CELEBRITY ENDORSEMENT STRATEGY ..............................................................................23
             (1)SOURCE CREDIBILITY MODEL ........................................................................................................................................26
             (2)SOURCE ATTRACTIVENESS MODEL .............................................................................................................................27
             (3)THE PRODUCT MATCH-UP HYPOTHESIS ..................................................................................................................28
             (4)THE MEANING TRANSFER MODEL...............................................................................................................................30
        2.5 Celebrity Selection ............................................................................................................. 31
             COMMON CELEBRITIES’ ATTRIBUTES ..............................................................................................................................31
             THE FRED PRINCIPLE ................................................................................................................................................................36
             4F’s.......................................................................................................................................................................................................37
             SOURCE ATTRIBUTES AND RECEIVER PROCESSING MODES................................................................................38
             Q-RATINGS.......................................................................................................................................................................................39
             SPORTS INDUSTRY ......................................................................................................................................................................41
        2.6 Overview of models and theories ................................................................................ 43

VI.             PRACTICAL PART ....................................................................................................................... 46



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    3. MODEL PROPOSAL ..................................................................................................................... 47
      3.1 The Management Circle for C.E. Strategy.................................................................. 47
          OVERALL STRATEGIES ..............................................................................................................................................................48
          DEFINITION OF BRAND PERSONALITY ............................................................................................................................49
          DEFINITION OF C.E. STRATEGY ............................................................................................................................................51
          IMPLEMENTING & CONTROLLING C.E. STRATEGY.....................................................................................................52
      3.2 The Drivers of C.E. Strategies ........................................................................................ 53
          THE COMPANY AS A PRINCIPAL DRIVER OF C.E. STRATEGIES ............................................................................53
          THE BRAND .....................................................................................................................................................................................54
          THE CELEBRITY PERSPECTIVE.............................................................................................................................................54
          THE PARTNERS’ PERSPECTIVE.............................................................................................................................................55
          THE MEDIA PERSPECTIVE.......................................................................................................................................................55
          THE PUBLIC PERSPECTIVE .....................................................................................................................................................55
      3.3 The C.E. Effectiveness Model ......................................................................................... 56

    4. QUESTIONNAIRE: Celebrity Endorsement Strategy CHECK ..................................... 62

    5. COMPANIES’ INTERVIEWS ..................................................................................................... 64
      5.1 SWATCH ................................................................................................................................ 64
           SWATCH HISTORY .......................................................................................................................................................................64
           PROMOTIONAL ACTIVITIES AT SWATCH ........................................................................................................................64
           INTERVIEW WITH ROBERTO COSTA, HEAD OF ADVERTISING & INTERNET (23.07.09) .......................65
          OBSERVATIONS ................................................................................................................................................................................67
      5.2 BCV – Banque Cantonale Vaudoise ............................................................................. 67
           BCV HISTORY ..................................................................................................................................................................................67
           CELEBRITY ENDORSEMENT ACTIVITIES AT BCV .......................................................................................................68
           BCV’S CELEBRITIES .....................................................................................................................................................................68
           INTERVIEW WITH VALÉRIE BASTARDOZ, HEAD OF COMMUNICATION (05.08.09).................................69
           OBSERVATIONS.............................................................................................................................................................................75
      5.3 SWISS FARMERS’ UNION (SFU) ................................................................................... 75
           HISTORY............................................................................................................................................................................................75
           CELEBRITY ENDORSEMENT ACTIVITIES AT SFU ........................................................................................................76
           SFU’S CELEBRITIES .....................................................................................................................................................................76
           THE ACTIVITIES OF THE CAMPAIGN .................................................................................................................................78
                      INTERVIEW WITH SANDRA HELFENSTEIN, DEPUTY HEAD ADMINISTRATIVE UNIT
                     COMMUNICATION ...........................................................................................................................................................................78
                       OBSERVATIONS.............................................................................................................................................................................80


    6. MODEL ADJUSTMENT AND SUGGESTIONS ...................................................................... 81

    7. GENERAL CONCLUSIONS......................................................................................................... 84

VII.          APPENDICES ................................................................................................................................. 87

BIBLIOGRAPHY.......................................................................................................................................112




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                                   IV. THEORETICAL PART




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1. INTRODUCTION

Jennifer Anniston, Tiger Wood, Roger Federer, Beyoncé: these names have become
symbols of the role of endorsers in advertising.
Companies invest millions of dollars to sign up with celebrities to endorse their
products. This is not a new phenomenon; it goes back to more than a century.
However, today’s use of celebrities in advertising strategies is becoming more and
more sophisticated and complex. Because of its cost, usually celebrity endorsement
strategy is used by big firms. Nonetheless, smaller companies with limited budgets are
starting now to use celebrities to promote their products.
However, companies should not select a celebrity before knowing if there is a need for
a celebrity endorsement. Indeed, many brands get by quite well without using
personalities.
In this paper, many factors used for the selection of celebrity endorsers have been
identified through academic literature review, such as celebrity attractiveness,
credibility, product-celebrity match, message and product type, target characteristics,
and general meanings of celebrities.



     1.1 Problem Discussion


From a marketing communication point of view, it is essential that companies plan
differential strategies to create competitive advantage. The use of celebrity
endorsement is a widely used strategy to achieve this competitive advantage. This
type of marketing strategy has become popular but it involves certain risks. Hence, to
avoid the risk of a failure, companies should prepare in detail this kind of strategy.
That means, they must think of each dimension, factor, and driver involved in the
process of celebrity endorsement. This leads to the aim of this thesis where through
an exploratory research a deeper understanding of an effective usage of celebrity
endorsement will emerge, as well as the development of suggestive ideas.
In the literature review, findings are varied and incoherent regarding the way of
choosing the right celebrity endorser. According to Byrne (Byrne, Whitehead, & Breen,



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UNIVERSITY OF LUGANO   BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT            2009



2003), choosing the right celebrity is the problem companies are facing. Companies
need help in determining a model which will give them the way to reach effectiveness
of celebrity endorser. A further research is needed to help them selecting celebrity
endorsers taking into account every dimensions, factors, and drivers. Indeed, most of
the authors analyzed the celebrity’s attributes to be a good endorser, but is it enough
to build a good strategy? The product is sometimes forgotten and too much focus is on
the celebrity, while the focus should be on the product. The product and the celebrity
need to match together, but there is either an environment around them and also an
audience. There are too many components that must be taken in consideration during
a celebrity endorsement process.



       1.2 Purpose and Research Questions


Many of the previous research on celebrity endorsement have explored celebrities’
attributes, and celebrity endorser’s influence on consumer behavior. What is really
missing in these studies is a global strategy of celebrity endorsement that would give
an entire overview of the process to companies willing to go on with celebrities as
spokespersons for their brand, product/service. The lack of research in this area gave
me the motivation for the present thesis. The purpose of this study is stated as
follows:
To gain a deeper understanding of the overall celebrity endorsement strategy in order to
develop an effective step-by-step model for companies willing to adapt this kind of
strategy.

RESEARCH QUESTIONS
  I.     What is the complete list of factors involved in the celebrity endorsement
         process which leads to an effective strategy?
 II.     Who are the drivers involved in the celebrity endorsement process who
         influence the strategy?




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HYPOTHESIS
  I. Celebrity attributes are not the only success factors to reach the effectiveness of
      celebrity endorsement.
  II. Each factor must fit together in order to achieve the effectiveness.
 III. Each factor and driver should be controlled as much as possible to an effective
      strategy.



    1.3 Delimitations


This research involves many aspects of celebrity endorsement. Therefore, there will
be restrictions because of time, and resources. Further, the model proposal will not be
tested by a company, but only assessed by few companies since the time for this study
is limited.



2. DEFINING CELEBRITY ENDORSEMENT – LITERATURE REVIEW

In this section, relevant theories and models to the research questions will be
presented.


      2.1. Definition

   [The most effective way to use a celebrity is that you want people to relate to the
   product through that celebrity.] (Levine, 2003)

The last 100 years, endorsement strategies provided many memorable moments. A lot
of people remember Michael Jordan endorsing the Nike shoe, as well as Tiger Woods
with the Nike golf equipment. Then, Michael Jackson endorsed Pepsi singing and
dancing, and Claudia Schiffer with her blond hair endorsed Elvive for L’Oréal. Today,
Nespresso had a huge success with the “What else?” sentence said by Georges
Clooney. So, what is all about endorsement strategy?




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A company using endorsement is promoting the company’s product by the means of
the personal recommendations of a celebrity, a person who is sufficiently well known
to influence the potential consumers of that product or brand. In other words, a
celebrity is in a way sponsoring the company’s product, and he/she is paid for doing
so (Bagehot, 1998). The concept is simple. A celebrity is chosen to express approval of
a product or service. Then an agreement between the celebrity and the company,
which represents the product being endorsed, is signed (Pemberton, 1997). The
importance of this strategy is not only the increase revenue of the company, but in
how the celebrities add value to a company, brand or product (Amos, Holmes, &
Strutton, 2008).
It is important to differentiate endorsement and licensing. Indeed, endorsement is
very similar to licensing except that the name of the endorser is used to promote a
product or brand, while the endorser’s name in licensing is on the product (Lipsey,
2006). Endorsement means the “stamp of approval” of a celebrity to a product, service
or brand (Pemberton, 1997). When David Beckham1 accepted to endorse Giorgio
Armani underwear, he accepted to give his “stamp of approval” for the product and
brand. It is estimated that he received 25-28 millions dollars for a three year contract
(Carlo, 2008). He will be Giorgio Armani’s “face” for a while. So, the “stamp of
approval” should be a real one to transmit credibility and create message
persuasiveness.


Today, celebrities cannot pursue themselves endorsement deals and contracts
because of the visibility industry’s growing. Indeed, celebrities need the help of
experts to take care of their image. There are different ways of using celebrities to
endorse products. There is the tools-of-the-trade endorsements when celebrities
endorse products used in the course of their work, for example Anna Kournikova who
endorsed Adidas. Then, there are the non-tool endorsements when celebrities
endorse products that are not related with their work, for example Anna Kournikova
who endorsed Omega watches (Rein I. , Kotler, Hamlin, & Stoller, 2006).


1   Appendix 2




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According to these definitions, celebrity endorsement is a well-liked strategy used by
companies in order to add more value to their brand/product by associating them to a
celebrity. This association will give to consumers a way of choosing a product by
relating it to someone they know.


      2.2. Origins


The first celebrity who endorsed a product was a famous English actress, Lillie
Langtry, with the Pears Soap in 1893 (Exhibit 1). She was also the first one that
affected negatively the desired brand image of a company because of her reputation
for being promiscuous (Louie, Kulik, & Jacobson, 2001).


                                            Exhibit 1
                                Lillie Langtry endorsing Pears’ Soap




                                                           www.lillielangtry.com




From Lillie’s endorsement till today, the use of celebrity spokespeople has been on the
rise. In 1975, a study reported that 15% of prime time television commercials
featured celebrities and by 1978 the number was reported to be over 20% (Kamins,
Brand, Hoeke, & Moe, 1989). Today, during a Super Bowl you will watch 32%
advertising with celebrities (Carlo, 2008). The celebrities’ business is always
increasing.



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THE SPORTS INDUSTRY
As everyone can observe, the sporting goods industry often uses the celebrity
endorsement strategies. Indeed, athletes are used to market a wide range of products,
services and brands. Especially, shoe companies are well-known for those kinds of
strategies. In 1997, “Sports Services of America” did a survey which results show that
sports celebrities’ endorsers have increased the value of products by more than 25%
over the products of competitors that do not use endorsement strategies (Pemberton,
1997). Many outside reasons have influenced the athletes’ potential of doing
endorsement during the last 30 years. One reason is the media’s desire to write about
an athlete’s personal behavior, like the actors and singers. Today, athletes, actors and
singers’ life is scrutinized from every angle. Therefore, it is much difficult to choose an
endorser. In the past, athletes’ bad habits were not known and it made no distort to
the companies they were working with.


Many well-known athletes made the history of celebrity endorsement. Babe Ruth,
member team of the New York Yankees, was the first celebrity in sports who did a
media endorsement. The deal was made in 1919 and the sportsman was paid five
dollars to describe each homerun he hit in a written exclusive to United Press
International (Schaaf, 2004).
From 1936 to 1957, the business of sports evolved in an impressive way. Indeed,
during these 20 years, the financial and social architecture of the sports industry
changed a lot. The mass media evolved too embracing the sports industry, which did
the same in return. Then in the late 1940s, television increased the move of
sponsorship and with it celebrity endorsement. Today, with the immense evolution of
technologies, the sports industry truly profits from the multiple print, radio, TV, and
internet newspeople that cover all the sports events in multiple languages and for
multiple outlets. Consumers have many sources of receiving content: newsprint, radio,
TV, computer, cellphone, and pager. All these technological improvements made life
easier for companies who want to market their products. Celebrity endorsement
strategies can be sent through all these means. Other names that made the history of




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celebrity endorsement are Michael Jordan, Tiger Wood, Joe Louis2, and Wayne
Gretzky. They were more than just sportsmen. They were mega-stars and
businessmen. Through the years, convergence of innovation and consumer marketing
has built a multibillion-dollar sports industry that will continue to expand all over the
world year after year (Schaaf, 2004). The sportsmen understood how the sports
industry is working and they are all becoming sports-businessmen, such as David
Beckham3. They also understood that it is more than a simple endorsement. Celebrity
endorsement strategies also measure an athlete’s popularity away from the action.

THE BEAUTY INDUSTRY
The beauty industry begins in the mid-nineteenth century where we can trace
advertising aimed at women. The development of this industry came from the
marketing of beauty products. However, this industry truly grew in the 1920s and
1930s. Then, after the Second World War, the beauty industry evolved and became
the beauty industry we all know today (Black, 2004).
The interest of women for beauty products was related to their new sense of identity
as consumers. The magazines played an important role in inducing women into the
world of brand-name products and smart shopping (Black, 2004).
The Pears Soap, as previously said, was the first product endorsed by a celebrity who
was a famous actress. Many others followed, such as Marilyn Monroe4 with two
famous endorsements for Westmore Hollywood Cosmetics. Stars are used by many
people as role models, even more in the area of personal appearance (Pringle, 2004).
A new standard of beauty appeared in Hollywood in the 1930s. Indeed, the stars
industry created a kind of gold standard of beauty around the Hollywood stars.
Cinema able to diffused a standardization of taste. In 1950s, Hollywood creates more
than a standardization of beauty; it produced a golden age of glamour where
Hollywood stars were seen as deities with an unapproachable beauty (Cashmore,
2006).
Today, almost every hair care or cosmetics company has a celebrity “face” to
represent its products. Hair products and cosmetics usage by women is still growing.
2 Appendix 1
3 Appendix 2
4 Appendix 3




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The role of celebrities in the beauty industry is fundamental. Celebrities create trends
that had always been followed. It is already 200 years that celebrities are endorsing
hair care products. Recently, Jennifer Aniston, actress, was rated as one of the most
powerful stars for the hair care industry (Pringle, 2004).
Nowadays, the beauty industry knows that celebrities sell cosmetics. Many examples
can prove that in this industry the best seller are the celebrities. There are many
famous celebrities in this industry. Some examples: Catherine Zeta-Jones with
Elizabeth Arden; Beyoncé Knowles with L’Oréal; Madonna with Max Factor; Kate Moss
with Rimmel; Pierce Brosnan with L’Oréal.
The advertising of the beauty industry has long time being criticized because it is
accused to create idealized stereotypes that in some way forces women to follow.
However, this industry will not change for some time. Celebrities will keep on being
the models of many women, and men for beauty concerns.


    2.3 Celebrity CultureError! Reference source not found.



[A celebrity is a person whose name has attention-getting, interest-drawing, and profit-
generating value.] (Rein, Kotler, & Stoller, 1997)


Celebrity culture is all around us and sometimes even invades us by shaping our lives,
conduct, style and manner. It affects many fans, but also entire populations with the
shift from plain consumer to aspirational consumer. Celebrities made a real change in
the media and in the consumer society.


Celebrities emerged from the sports and entertainment industries. They get attention
of people by being visible in the media. Usually, celebrities are first noticed through
their professional lives, but then people get attracted by their private lives as well.
During the 1980’s and 1990’s, celebrity culture was a real part of the social life. This
celebrity culture was supported by the global media that promoted celebrities usually
from entertainment and sports industries (Cashmore, 2006). According to Len




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Sherman (1992), once a time, people admired heroes such as statesmen, scientists,
explorers and military figures because of their heroic accomplishments. These heroes
today have been exchanged by many celebrities that became examples for the society
even without accomplishing heroic actions. They are simply figures who embodied
public’s convictions and hopes and therefore they are being admired as heroes of the
society to be respected. Sherman means that today an athlete who wins a football
game seems to have conquered the Everest. The attraction of the public is not
necessary related to the celebrity’s talent, since there is no required relationship to
his/her celebrity status. Much of the time, a celebrity does not have talent but only
presence.


[We have forsaken our traditional heroes and replaced them with actors and
athletes…where once admired people who do great things, now we admire people who
play people who do great things.] (Sherman, 1992)

Literature review shows that celebrity has different meanings. A first consideration is
that celebrity is a cultural change towards a culture that privileges the visual and
sensational. A second one is that a celebrity is someone that has an innate quality that
is discovered by industries of sports or entertainment. A third consideration is the fact
that a celebrity evolved through the process of commodification and became a
“product” that makes promotion, publicity and advertising (Turner, 2004). Indeed, as
soon as someone grows up in the scales of public visibility he/she can start to sell. By
being a “product”, celebrities can be bought and sold in a marketplace. Celebrities
became a kind of raw material that need to be refined, developed, and packed before
being marketable. The commodification process which makes people tradeable and
ready for the consumption is a key process in the celebrity culture (Cashmore, 2006).

THE MERGER OF BRANDS AND CELEBRITIES
Butterfield developed a model (Exhibit 2) that shows how celebrities work well for
the brands’ promotion. One fundamental thing about working with celebrities for the
brands’ promotion is that since they are famous, they will be more likely “invited in”
by customers (Pringle, 2004). This is one consideration that Butterfield pointed out in
order to better understand the subscription decision process. Butterfield’s model is


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the result of many works done on countries, issued causes, and charities. He claimed
that there are two key factors for the identification process, awareness and familiarity,
which can somehow stand for the term “subscription”. However, for the creation of a
real relationship, Butterfield considered that the factor visualization must be
integrated in between.


                                            Exhibit 2
                                 The subscription decision process




                                                                     (Pringle, 2004)




Explanation of the model: Stars have high (1) public awareness as well as high (2)
visibility which give people a sense of (3) familiarity. If the fit between the celebrity
and the brand is well created, then it will give a meaningful (4) resonance and a
positive (5) disposition. These steps lead to (6) subscription which is the last step to
build a good relationship (Pringle, 2004).
In a world, where transnational companies, such as AOL Time Warner, News
Corporation, Sony, and Disney, build their power by diversifying one media form
across many media platforms, celebrities became the bond to connect all these cross
media processes. Celebrities allow the transfer from one format to another through a
branding mechanism. This mechanism is part of the celebrity routine which is made of
cross-promotions (Turner, 2004). For example, a movie star will promote the new
movie by going in different talk shows and at the same time the movie star will
promote a new hairspray because of the spontaneous interest of the audience related



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to the launch of the new movie. Everything is correlated and that is the reason why it
is called a cross-promotion.


[The cast of characters that make up today’s generation of celebrities couldn’t be more
saleable if they had barcodes]. (Cashmore, 2006)

Celebrities make money and it is a fact. They market everything with their names and
images because they simply attract audiences. Therefore, celebrity endorsements are
used by marketers to brand their products, as well as television programs use
celebrity appearances to build their audiences. They all make a kind of merger
between the product to be promoted and the celebrity who will promote it. As in
every merger, the two partners need to be compatible to make it work. The celebrity
is a commodity, as explained in last section, that will “marry” another commodity and
as in every relation an understanding of both parts is crucial.
The celebrities are well conscious of their power and therefore they develop their
public personality as a valuable asset that is defined from all the personal and career
choices. They became real “commodities” and even if they do not like this word, they
work on strategies to increase the value of this commodity to the industry.


There are various ways celebrities can work for a brand. HPI, a leading UK research
company, developed a model (Exhibit 3) where we find all the different modes a
celebrity can be exposed for a brand.
                                            Exhibit 3
                             Five ways a celebrity can work for a brand




                                                                  (Pringle, 2004)




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         According to HPI, these terms can clearly be connected or even overlapped in a
celebrity endorsement strategy (Pringle, 2004):
         Testimonial: the celebrity is a spokesperson or a mouthpiece for the brand.
         Imported:     the celebrity plays a role that the audience already knows from
                       TV or movie appearances.
         Observer:     the celebrity plays the role of commenting about the brand.
         Invented:     the celebrity performs a part invented only for the brand.
         Harnessed:    the celebrity is tied to the storyline of the brand advertising; the
                        character of the celebrity can evolve through it.
The UK company stated that with the testimonial and imported mode the strategy is
less effective because of the imposed perception, while with observer, harnessed, and
invented mode, the customers perceive more integration between celebrity and
brand.

THE WATCHTOWER
Nowadays, the public is no more passive. The public is asking more from celebrities,
something different. The public is standing in a “watchtower” and “celebrities must
surrender themselves to life” as they are standing in a gold prison (Cashmore, 2006).
The fans want to watch and inspect whenever they want. If celebrities do not
surrender, the public might lose interest and go on with other more interesting
celebrities. As soon as the public is no longer interested, he can send it to oblivion and
leave it there. Being active, the consumers can promote a celebrity career or destroy it
by simply discarding him/her as a real commodity. The public knows it and this is its
true power. Today, consumers have more power collectively on celebrities than ever
and they like it because they know that they are not just observers anymore but also
players. Consumers are players and creators of celebrities with their desire for new
celebrities’ figures. This also explains the new trend in consumer behavior. In the past,
consumers needed to own goods, but often could not afford everything. Now,
consumers want to emulate celebrities’ lives. Even if it is hard to reach the same level
of life, they try to do as much as they can by reaching the nearest thing.




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THE FAN POWER
Cashmore described the word “fan” as a “description of followers, devotees, or
admirers of virtually anybody or anything in popular culture” (Cashmore, 2006). He
defined different types of fans. The first category, the low worship fans, involves
people who just read about celebrities. The second category of fans is the
entertainment-social character, which concern the one who follow kindly the
celebrities. The third, regards those who are really interested in knowing the
celebrities’ lives, called the intense-personal feelings. Finally, there are the extreme
worshippers who are really obsessed by the celebrities (Cashmore, 2006). This close
involvement with celebrities’ lives is called by Neil Alperstein (Alperstein, 1991) the
“artificial involvement”. He said, in his study, that this involvement helps people in a
certain way making sense of their reality by integrating celebrities in daily life. In
Benson Fraser and William Brown’s study with Elvis’ fans, they explained the fans’
attitude with three possibilities (Fraser & Brown, 2002). The first is that “ordinary
people develop extraordinary psychological relationships with celebrities, whether
living or dead. The second possibility is the fact that people consider celebrities as role
models to follow. The last one is that “fans adopt what they see as a celebrity’s
attributes, including his or her values and behavior”.


[Consumer product companies are always looking for that next certifiable star, because
the impact that individual has in his public sphere of influence. The recognition and
loyalty of his fans means sales in terms of cereal, video games, chewing gum, shoes,
hardware, and just about anything.] (Schaaf, 1995)


The fan has a real power towards the celebrities. Indeed, he/she can change their lives
in a positive and negative way. The fan can highlight the celebrity, but can also press
the “delete key” of the computer and make celebrities disappear from the stage. It is a
true influence on a life of someone. It is a terrific power. It is the “fan power”.

THE VISIBILIY OF CELEBRITIES
In 1999, Forbes magazine introduced “Celebrity Power 100” with the ranking of the
celebrities based on stars’ brand franchise, and not based on the fortune. This shows




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how celebrities’ visibility is important. There are different dimensions in the visibility
hierarchy which are space and time.
Space can be illustrated with a pyramid made of five levels: (1) Invisibles; (2) Local
Visibility; (3) Regional Visibility; (4) National Visibility; (5) International Visibility
(Rein I. , Kotler, Hamlin, & Stoller, 2006).
Time is the enemy of many celebrities. Indeed, there are few celebrities that become a
legend and many that are often one-day or one-year well-known people.

THE CELEBRITY INDUSTRY
According to Rein et al. (1997), there are many sub-industries that support the
celebrity industry. Coordination between these sub-industries is needed in order to
produce and promote brands. Moreover, the celebrity industry (Exhibit 4) is also
defined to coordinate the services that the sub-industries provide in order to produce
and promote the celebrity. Therefore, it works in both sides, the entertainment and
the communications industry (Rein, Kotler, & Stoller, 1997/2006).
The first industry – entertainment industry – consists of theatres, music halls, dance
halls, sports arenas, museums, county fairs, sport games and movie studios. This
industry was born mostly in Hollywood. The second industry – communications
industry – is the media channels, through which we know the visible people. Many
images, products and stories about these visible people are sold through the media
channels, such as television, radio, film, cable, magazines, newspapers and internet.
The promotion of these two industries – entertainment and communications
industries – is made with the third industry which is the publicity industry. It
encompasses publicists, PR firms and advertising agencies which constitutes the
largest form of promoting, and marketing research firms. Then follow the
representation industry composed by agents, personal managers, and promoters,
which handle the celebrities by negotiating engagements for them in exchange of a fee
or commission. Some agents, few of them, do not only sell their clients as they are.
They try to offer a “total service” to their clients giving them all the support they need
to improve themselves day by day. Unfortunately, there are few agents acting like that.
That is the reason why the appearance and the coaching industries exist – to give
personal consultancy. The appearance industry is one of the fastest-growing


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components because of the high degree of importance of the celebrity image. This
industry includes makeup specialists, hairstylists, clothing stylists, color consultants,
image coordinators, dermatologists, nutritionists and plastic surgeons. This is a real
competitive environment that is growing every day. The coaching industry is related
to the professional performance of the celebrities. It helps celebrities improving
different skills, such as dance, music, speech, that aspire to be highly visible. Then, the
legal and business services industry gives different kinds of legal, accounting and
investment advice. Finally, the endorsement and licensing industry is a growing
industry since marketers understood that it is a powerful mean to distinguish a
product or service from the competitors (Rein I. , Kotler, Hamlin, & Stoller, 2006).
The celebrity industry earlier than today was not as transparent since the industry did
not want to show all the activities behind the trade. Nowadays, the industry is well-
known and transparent. Closing the eyes to this industry is impossible because it is
anchored to the fabric of our economy and culture.

                                           Exhibit 4
                                Structure of the Celebrity Industry




                                                           (Rein, Kotler, & Stoller, 1997)




To make the system work it is necessary to know the existence of all these industries
that have a crucial role in the development of the celebrity industry. There are many



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key figures too within these industries that must be taken into account – agents,
managers, and publicists. Of course, there are many variations depending from market
to market. The economic interdependencies between these figures and the celebrities
form a bind that makes the key to the structure of the celebrity industry.
The power of the celebrity industry is limited due to many conflicts of interests which
create gaps in its understanding of the context. For example, we know that the system
does not work perfectly for the publicity industries’ interests because of many
scurrilous revelations of many celebrities (Turner, 2004).



   2.4 Existing Theories and Models


PROS AND CONS OF CELEBRITY ENDORSEMENT STRATEGY
During the last years, celebrity endorsement became a well-known communication
strategy with the aim to build a congruent image between the brand and the
consumer. This is a real challenge for marketers who have to find the right endorser
who will fit with the brand of the company. The challenge is to determine the meaning
consumers associate with the brand. Therefore, before starting a celebrity
endorsement strategy, the company must be sure to have chosen the right
communication strategy in order to reach consumers’ expectations. Marketers must
examine thoroughly the fit between the celebrity and the product before launching
any campaign. Before taking any decisions, the company should check all the pros and
cons of having a celebrity endorsing its product.
Even if there are significant potential benefits in using a celebrity endorsement
strategy, companies should know that there are also significant costs and risks.
According to Erdogan (1999), there are as many potential advantages in a celebrity
endorsement as potential hazards (Exhibit 5).




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                                             Exhibit 5
                          Pros and Cons of Celebrity Endorsement Strategy



                       POTENTIAL ADVANTAGES          POTENTIAL HAZARDS

                       Increased attention         Overshadow the brand

                       Image polishing             Public controversy

                                                   Image change and
                       Brand introduction
                                                   overexposure
                                                   Image change and loss of
                       Brand repositioning
                                                   public recognition

                       Underpin global campaigns   Expensive

                                                                        (Erdogan, 1999)


According to Erdogan (1999), the advantages are significant and companies trust that
such a strategy will generate desirable campaign outcomes. Today, consumers easily
can choose what advertise commercials they would like to see by zapping or watching
TV programs without commercials. Therefore it has become more challenging for
companies to get consumers’ attention and penetrate the clutter of brief and
numerous advertising spots. The competition is hard, so a great strategy is needed to
stand out from the rest. Celebrities help in doing so and improve the communicative
ability by cutting through excess noise in a communication process (Miciak &
Shanklin, 1994).
With celebrity endorsement, an authentic positioning of the brand/product can easily
be done. Moreover, the exclusivity of the celebrity is an essential key, as well as the
gain of credibility amongst consumers and also retailers (Cotting, 2007-2008).
The image polishing can also be done through a celebrity endorsement strategy when
a company is going in the wrong direction. Indeed, when a company’ image is
suffering, using celebrity’s image will transfer his/her own image to the band or
product. A good way of introducing a new brand/product is to design it around the
personality of a celebrity. It will give direct appeal and the image of the celebrity will
instantly be pushed over to the product.




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One important advantage of this strategy is the creation of an emotional attachment
with the target group (Cotting, 2007-2008).


Although celebrity endorsement strategy has significant returns, sometimes
celebrities’ qualities become undesirable and therefore it is always a major challenge
to select and retain the right celebrity avoiding potential pitfalls. To prevent the
potential hazards, Erdogan states that pre-testing and planning carefully the strategy
are crucial for the success of the campaign. This will avoid the overshadowing of the
brand by the celebrity. Indeed, many times a celebrity endorsement strategy focuses
too much on celebrity and forgets to focus on product. By consequence, the product is
forgotten by the consumers because the attention is too much paid over the celebrity.


[When a brand – either new or established – associates itself with an already established
personality, it can enhance its own brand identity or be swallowed up by the larger
identity it has annexed.]. (Levine, 2003)

Another well-known tactic is to buy a death and disgrace insurance for the contract
and to cautiously put provision clauses in the contract so that in any case of injury the
company will be a minimum insured. It is either essential to mention in the contract
what is the exact role of the celebrity and should be a great idea to put restriction
clause to avoid too many endorsements with other brands. Indeed, the overexposure
is only an advantage for the celebrity but not for the company. The consumer might be
confused with too many brands endorsed by the same celebrity. The selection of the
celebrity is critical and it is fundamental to examine at what life-cycle stage the
celebrity is and how long this stage will last. The image of a celebrity changes during
his/her life but a brand should not be exposed by this change. In fact, if any kind of
image change might happened during the campaign then it can bring a loss of public
recognition. According to Erdogan, celebrity endorsement is also a powerful tool to
enter foreign markets. Indeed, the international visibility of many celebrities can be
used as a tool to enter new markets, using the same campaign for different countries.




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Celebrity endorsers can also be compared with created characters endorsers. Instead
of using celebrity endorsers, many companies choose to create a character who will
endorse its products. This strategy is able to build a character that is congruent a
hundred percent with their brands and target audiences. While there is an absolute
control over this kind of strategy, celebrity endorsement has limited control with the
celebrity’s persona. Some studies prove that with created characters the link between
the character and the product is more effective. Following this reasoning and
according to the Classical Conditioning Paradigm5, consumers have a stronger
association with created characters than with celebrity endorsers. The reason is that
celebrity endorsers are linked to many other things whereas the created characters
are linked only to the product.


As already mentioned, the choice of a celebrity endorsement is an important task.
Therefore, considerable studies have been conducted in order to create models for
endorsement strategy. There are four significant models created between 1953 and
1989. The initial model was the Source Credibility Model constructed by Carl I.
Hovland and his associates. Then three other models follow it: the Source
Attractiveness Model (McGuire, 1985); the Product Match-Up Hypothesis (Forkan,
1980; Kamins 1989, 1990); and the Meaning Transfer Model (McCracken, 1989).

(1)SOURCE CREDIBILITY MODEL
The source credibility model is the first of the celebrity endorsement strategy models.
The model affirms that the effectiveness of the endorser’s message depends on his
perceived level of expertise and trustworthiness (Hovland, Irving, Kelley, & Harold,
1953). Trustworthiness and expertise start a process called internalization in which
the promotional message has influence on the consumers’ beliefs, opinions, attitudes,
and behavior since information comes from a credible source (celebrity) (Erdogan,
Baker, & Tagg, 2001). As a consequence, a celebrity endorser who possesses high level
of trustworthiness and expertise will be more likely to change the consumer’s attitude


5 The Classical Conditioning Paradigm in Marketing Communications Context claims that consumers do associations between an
unconditional stimulus (endorser) and a conditional stimulus (product) through repeated exposure (Erdogan, 1999).




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(Ohanian, 1990). Hence, the more credible a source is, the more it will be persuasive.
Even though source credibility is an essential factor in defining a celebrity endorser
because of its direct effect on consumers’ behavior, it is not the only factor to consider
while choosing a celebrity endorser.
It seems that a source’s credibility cannot be measured because of its subjectivity, but
there is a high degree of agreement among individuals called “truth-of-consensus
method”. This method is used to measure and assess a source’s credibility and
attractiveness. The method is based on Gestalt principles which state that individual’s
judgments of credibility and attractiveness come from person perception instead of
single characteristics (Erdogan B. Z., 1999). For the source credibility measurement,
Ohanian (1990) created a Source Credibility Scale (Exhibit 6) after doing extensive
research and statistical tests. He bounded many characteristics to the credibility
attribute, but McCraken (1989) argued that to measure celebrity endorsement
effectiveness many other attributes should be taken into account because
attractiveness and expertise were not enough.


                                           Exhibit 6
                                     Source Credibility Scale
           ATTRACTIVENESS           TRUSTWORTHINESS             EXPERTISE
           Attractive-              Trustworthy-                Expert-Not Expert
           Unattractive             Untrustworthy
           Classy-Not Classy        Dependable-                 Knowledgeable-
                                    Undependable                Unknowledgeable
           Elegant-Plain            Reliable-Unreliable         Qualified-
                                                                Unqualified
           Sexy-Not sexy            Sincere-Insincere           Skilled-Unskilled
           Beautiful-Ugly           Honest-Dishonest            Experienced-
                                                                Inexperienced
                                                                             (Ohanian, 1990)


(2)SOURCE ATTRACTIVENESS MODEL
The model affirms that the effectiveness of the endorser’s message depends on
his/her similarity, familiarity, and liking (McGuire, 1968). Therefore, this means that




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the endorser should have a resemblance with the receiver of the message (similarity),
as well as physical appearance and behavior that affect the receiver (likeability).
Moreover, the endorser should be well-known by the receiver through different
exposure (familiarity). The attractiveness of the endorser is usually determined by the
process called identification. This process works in the application to advertising
because consumers accept information given by an attractive endorser and as a result
they want to emulate him/her by having in this case a purchase intention (Kelman,
1961). Indeed, attractiveness can be observed in most advertisements which expose
attractive people. People are used to these kinds of attractive people that are being
stereotyped. Usually, the source attractiveness model works better when people have
changing beliefs (Baker & Churchill, 1977). Confusion can be done when talking about
attractiveness, since many times it means only physical attractiveness in the
advertisements. However, attractiveness signifies either other characteristics that the
receiver might perceive in a celebrity endorser, such as intellectual skills, personality,
etc.
Many studies have shown that there are no doubts that celebrities’ attractiveness
boosts attitudes towards advertising and brands. Nonetheless, some studies show that
there are no purchase intentions with this kind of strategy, while other studies show
exactly the opposite. There is ambiguity about the results and the fact that celebrities’
attractiveness alone can initiate behavioral intent (Erdogan, 1999). Indeed, Baker and
Churchill’ studies (1977) showed in an experiment for a coffee campaign that an
unattractive model leaded to behavioral intent of purchasing, while an attractive
model did not create such intentions towards male subjects. Patzer (1985) claimed
that “physical attractiveness is an informational cue; involves effects that are subtle,
pervasive, and inescapable: produces a definite pattern of verifiable differences; and
transcends culture in its effects.”

(3)THE PRODUCT MATCH-UP HYPOTHESIS
The product match-up hypothesis sustains that harmony of the match between the
celebrity endorser and the product being endorsed is a key determinant for the
effectiveness of the strategy (Amos, Holmes, & Strutton, 2008). Forkan (1980) and
Kamins (1990) state that the messages sent by the source (endorser) and the message


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of the product should be congruent to reach an effective advertising. Advertising with
high congruity between the celebrity image and the product message has more
credibility than advertising with low congruence. Indeed, the advertising effectiveness
will be measured by the degree perceived of the fit between brand and celebrity
image. Friedman and Friedman also confirmed the hypothesis that the celebrity and
product fit lead to a higher effectiveness of the strategy. In reality, consumers are also
expected to find a certain level of congruence between the endorser’s image and the
product he/she endorses. So, from both sides, practitioners, and consumers, there is a
high expectation in the match between celebrities and brands. From the consumer
point of view, if match is missing, the consumer will only think that the celebrity has
been bought to endorse the product and that he/she does not believe in what he/she
is saying. From the practitioners’ point of view, if the product does not match the
celebrity’s image, then the “vampire effect” might occur. It means that consumers
remember the celebrity, but not the product (Evans, 1988). According to Evans
(1988), “celebrities suck the life-blood of the product dry” when there is no existence
of a product/celebrity fit. Kamins (1990) also suggested a specificity of the match-up
hypothesis about attractiveness. In fact, he proposed that celebrity endorsement
strategy is more effective when attractive celebrities endorse products that enhance
one’s attractiveness. This is the reason why many personal care products are
endorsed by attractive celebrities.
However, according to Till and Busler (2000), the effectiveness can be measured in
terms of brand attitude, but not in terms of purchase intention. The match-up
hypothesis has some limitations because of the inability of identifying and measuring
which dimensions are applicable for a particular product. The match-up hypothesis
has to be extended to the match of the entire image of the celebrity with the entire
image of the brand and target audience (Erdogan B. Z., 1999).


[It’s got to be a good match. You can’t just pull a celebrity out of the air. The most
important thing is matching the celebrity’s image and the way the public relates to
them. You have to tap into that to be effective]. Noreen S. Jenney, President of Celebrity
Endorsement Network, (Levine, 2003)




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(4)THE MEANING TRANSFER MODEL
McCraken (1989) stated that the effectiveness of celebrity endorsement strategy
relies on the meaning that the celebrity conveys through the endorsement process.
Celebrities can transfer different meanings to the products and there are undeniably a
huge number of meanings contained in a celebrity, such as status, gender, age,
lifestyle, and personality (Erdogan B. Z., 1999). Therefore, it represents for marketers
a large choice at their disposal for their strategies.
This model gives a “conventional path for the movement of cultural meaning in
consumer societies” (Erdogan, Baker, & Tagg, 2001). The process (Exhibit 7)
constitutes three stages: the formation of celebrity image, the transfer of meaning
from celebrity to product, the transfer of meaning from product to consumers
(McCraken, 1989).


In the first stage, McCraken (1989) contended that meanings come from a culturally
constituted world, a physical and social world composed by many categories and
principles of the current culture. In this process, there are many actors that play an
important role. Advertising is a way of joining together consumer needs and the
representation of the culturally constituted world. As a result, the role of advertising
is to communicate the culturally constructed meaning of products to consumers.
The second stage is the movement from celebrity to product. It is the moment where
the product gains a personality during the transfer of celebrity’s meanings. This work
is done by advertising agencies which choose the proper celebrity to represent the
product with the proper meanings. After the meanings are transferred to the product,
they should also be transferred to consumers (stage 3). According to McCraken, this
last transfer is to be done by the effort of the consumers who are willing to take
possession of the meanings. This movement will be achieved through cultural rituals.




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                                           Exhibit 7
                         Meaning Movement and the Endorsement Process




                                                                     (McCraken, 1989)




Finally, this model suggests that companies should investigate the real meanings of
celebrities that are desirable for their product or brand. In fact, the effectiveness of the
endorser will depend in part on the different meanings he/she conveys through the
endorsement process.
In his findings, Cotting (2002) had improved McCraken’s model by integrating during
the stage 2 a new element. He claimed that the product has also an influence on the
celebrity’s image. Therefore, he added at stage two a two-way arrow between
celebrity and product.



   2.5 CELEBRITY SELECTION

This section includes models and theories which use success attributes for the
celebrity selection.

COMMON CELEBRITIES’ ATTRIBUTES
A celebrity endorser strategy is not without a certain level of risk. That is, selecting an
inappropriate endorser can reduce sales revenues and tarnish a brand’s. Because of
the importance of selecting an effective celebrity endorser, the marketing literature is
replete with articles that evaluate which celebrity attributes correlate the highest with
a successful endorsement (Amos, Holmes, & Strutton, 2008).




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Trustworthiness
Most of the literature sustains that trustworthiness is one of the essential attributes
for a celebrity to be credible. The credibility of the message is one of the most
important criteria when choosing a celebrity endorser (Knott & James, 2003). Indeed,
the credibility of the source plays a considerable role in celebrity endorsement since it
influences beliefs, opinions, attitudes, and behavior through the internalization
process. That explains why trustworthiness appears to have a significant impact on
the effectiveness of the celebrity endorsement (Chao, Whurer, & Werani, 2005).
Trustworthiness represents honesty, integrity, and believability that an endorser
communicates with a target audience (Erdogan, Baker, & Tagg, 2001). Therefore,
trustworthiness is the degree of confidence that a communicator transmits to his
audience (Amos, Holmes, & Strutton, 2008). If the degree of confidence is high, then
the audience attitude changes effectively. Moreover, a degree of confidence is even
more important if the audience has a negative position toward the offering. In
summary, an effective celebrity endorsement strategy requires a high level of
trustworthiness so that the transmitted message is credible.


Expertise
Expertise is another factor that lends credibility to the endorser source. Erdogan
(1999:298) defines celebrity endorser expertise as “the extent to which the
communicator is perceived to be a source of valid assertions.” Thus, the expertise of
an endorser stems from people’s perception of the knowledge, experience, or skills
s/he possesses. Perceptions of this knowledge, experience, or skills influence how the
audience judges the offering’s quality. Therefore, individual perceptions of an
endorser’s expertise are positively correlated with their purchase intentions and a
communicator perceived to be a source of valid statements can positively impact
attitude change (Ohanian, 1990:42).


Celebrity Power
Power is a relevant dimension in the process of persuasion. Power gives an endorser
the ability to bring another person to “respond to the request or position the source is



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advocating” (Byrne, Whitehead, & Breen, 2003). Hence, the endorser should have
relevant power to administer rewards or punishments. This means that persuasion
occurs when the consumer comes to accept the endorser’s position in order to receive
rewards or avoid punishments (Kelman, 1961). As a result, it signifies that the
receiver perceives the endorser is a source of power. It is prudent to note that
superficiality is one disadvantage of persuasion through the process of compliance. In
fact, persuasion lasts only as long as the receiver believes that the endorser retains the
power of dispensing rewards or punishments (Junokaite, Alijosiene, & Gudonaviciene,
2007).
The principal persuasive power of a celebrity comes from their being popular, famous,
recognizable, admired, trendy and fashionable. These attributes are prime reasons
why a person achieves celebrity status, and why s/he has the power to influence
others. Celebrity power can be so strong that in some cases the selection of an
endorser is made almost solely upon the individual’s level of popularity.


Match of Image and Values
The harmony of the match of the product/service offering and the celebrity endorser
is explained by the “match-up hypothesis” (Till & Busler, 2000). This hypothesis posits
that the message of the celebrity endorser image and the offering message must be
congruent in order to be effective (Kamins M. A., 1990). A match exists when the
“degree of perceived fit between brand (brand name, attributes) and celebrity image”
is high (Erdogan B. Z., 1999). Interestingly, the perceived match between the
celebrity’s image and values and those of the advertised brand bolsters perceptions of
the celebrity’s credibility (Friedman & Friedman, 1979). This means that advertisers
must evaluate the characteristics of the target market, the celebrity’s personality
characteristics, and the characteristics of the product in order to attain the highest
perceived degree of match.
This congruence is essential to ensure that the consumer remembers the product
instead of only the celebrity. In fact, research confirms that if there is no relationship
between the celebrity and the product, consumers will remember celebrities rather




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than products. This effect is called the “vampire effect” because “the celebrity has
sucked the life-blood of the product dry” (Evans, 1988).


Physical Attractiveness
A body of research spanning three decades provides strong support for the contention
that an individual’s assessment of someone else is highly influenced by their physical
attractiveness (Solomon, 1998). Canary and Cody (1994, pp. 72) state that: “we like
attractive people, we attribute positive qualities to them and find it rewarding when
they appear to like us.” Moreover, they explain that: “we are more likely to comply
with requests from likable, good-looking people than from people who are unlikable
and unattractive” (pp. 301). It is for these reasons that previous celebrity endorser
studies report that an endorser’s physical attractiveness is a significant catalyst of
endorser effectiveness (Chao et al., 2005, DeSarbo and Harshman 1985, Ohanian
1990). A meta-analysis performed by Amos et al. (2008) also echoed this same
sentiment.


Genuine Support
Genuine support is a relevant criterion of endorser effectiveness because it increases
the audience’s credibility perceptions (Magnini, Honeycutt, & Cross, 2007), who
perceive authenticity in the celebrity endorser. This authenticity is related to the
support of the celebrity for the product s/he endorses. Not only is this support
important in front of the camera, but also in his/her lifestyle (Magnini, Honeycutt, &
Cross, 2007). A way to increase genuine support is to involve the celebrity in the
creation of the product’s design and features (Boone & Kurtz, 2005). Such celebrity
involvement will motivate him/her to become a frequent user of the product, which
increases the perceived authenticity of the endorser.


Exclusivity
The exclusivity of a celebrity endorser is a criterion that enhances overall believability
(Schiffman & Kanuk, 2004). When a celebrity endorses multiple products, the
effectiveness of their endorsements is diluted (Marconi, 1996). In other words, the



                                                                           34
UNIVERSITY OF LUGANO   BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT             2009



exposure of a celebrity endorsing different products or brands makes an
advertisement less credible. Moreover, people can become overexposed to a
celebrity’s image, and for that reason will pay less attention.
Exclusivity can also serve to protect a sponsoring company. That is, if a celebrity
makes an unsuccessful brand endorsement, that failure can be transmitted to other
brands that the celebrity is endorsing. Asking exclusivity to the celebrity in the
contract, therefore, can serve as insurance against negative associations.


Reference Groups
Reference group appeals have been used for decades by marketers to persuade
consumers to purchase goods (Peter & Olson, 2002). By definition, reference groups
are persons, groups or institutions that a person uses as a point of reference. In this
case, the reference point is a celebrity with values, behaviors, and lifestyles (Holbrook
& al., 2008). These values are a guide to help consumers choose their own values and
behaviors. The celebrity, with his/her values and behaviors, can guide the consumer
to purchase a product. In terms of celebrity endorsement strategy, the influence of
reference groups can be divided into two categories: relate and emulate.


Reference group: relate
This reference group is usually referred to as membership reference group, which
means that people turn into formal members, with a clearly specified structure of a
membership reference group. Membership reference group is a utilitarian reference
group that influences consumers with rewards and punishments. People are expected
to behave in a certain way and are rewarded for, or are punished when they do not
behave the way they are expected (Peter & Olson, 2002). The use of a celebrity can be
a strategy with the creation of a reference group influence by showing how a celebrity
is close to the consumer. The reference groups are usually social archetype groups,
which are groups of people that share a similar lifestyle. Consumers want to emulate
the celebrity’s consumption choice in order to assume part of the group’s identity.
Most of the time consumers outside the group are fascinated by celebrities (Holbrook
& al., 2008).



                                                                           35
UNIVERSITY OF LUGANO   BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT                 2009



Reference group: emulate
This reference group is usually termed aspirational, which means that people aspire
to emulate the reference group. An aspirational reference group is value-expressive in
the sense that it has an effect on people’s self-concepts (Peter & Olson, 2002).
Aspirational reference groups usually include cultural heroes, such as sports
celebrities, and film and music stars that consumers are willing to emulate. Children
can be particularly impressionable by celebrities they wish to emulate (Holbrook & al.,
2008).

THE FRED PRINCIPLE
The FRED principle (Exhibit 8) is an acronym which stands for Familiarity, Relevance,
Esteem, and Differentiation. This model is the result of a vast study based on 30’000
interviews around the world to understand why advertising efforts succeed and fail.
This model was developed by Amy Dyson and Douglas Turco (Illinois State
University).

                                           Exhibit 8
                                       The FRED Principle




                                                        Amy Dyson & Douglas Turco




As already introduced in the source attractiveness model, Familiarity is an important
attribute for a celebrity since it means that the celebrity is well-known and perceived
by the consumer as a person who is friendly, likeable and trustworthy. This is about
the celebrity’s recognition. Marketers must choose a celebrity who is recognized by
the target audience. The second component of the FRED principle is the Relevance,




                                                                                    36
UNIVERSITY OF LUGANO   BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT                  2009



which is by the meaning a synonym of the match of image and values. Indeed,
relevance is the connection between the celebrity, the product and the audience. The
third component is Esteem, esteem from the consumer to the celebrity. Consumers
must have respect and believe the celebrity to be influenced by him/her in order to
purchase the endorsed product. Finally, Differentiation is a key component to reach
competitive advantage. It is the ability of sending the right message in outstanding
way. If there is no differentiation with the competitors, then the strategy is not
worthwhile.
These four components are the success factors of the FRED principle. These guidelines
are a good way of beginning to select one celebrity. However, there is no guarantee of
success because each company’s objectives are different and individual evaluation
should be done.

4F’s
Hamish Pringle suggests another model (Exhibit 9) for selecting the best famous
people to do a brand promotion. He presents guiding principles that should be
maximized and optimized in order to do the right selection. These principles are the
four F’s: Fit, Fame, Facets, and Finance.

                                            Exhibit 9
                                    Four Fs in using a celebrity




                                                                   (Pringle, 2004)




Hamish Pringle recommends marketers to ask themselves the following questions
(Pringle, 2004):
       “How well does this particular celebrity Fit in with the brand?”
       “How Famous is the star?”



                                                                                     37
UNIVERSITY OF LUGANO   BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT                     2009



       “Which Facets of this high-profile person can best work for the brand profile?”
       “How much of this can the brand Finance?”


The relationship between the star and the brand should be the more intimate so that
the campaign is the more effective possible in the marketplace.


SOURCE ATTRIBUTES AND RECEIVER PROCESSING MODES
Another approach on how the celebrity selection is done has been developed by Belch
& Belch (2001) with the “Source Attributes and Receiver Processing Modes” (Exhibit
10). This approach corresponds to the identification of the influence on consumers’
attitude on behavior through different processes.


                                           Exhibit 10
                          Source Attributes and Receiver Processing Modes




                                                                     (Belch & Belch, 2001)



Belch & Belch (2001) contend that for the success of the brand-celebrity collaboration,
credibility is an essential element. Credibility is defined as the consumers’ perceived
expertise and trustworthiness. Credibility has therefore a great influence on the
consumers’ acceptance. As already mentioned, internalization process is the process
through which a promotional message has influence on the consumers’ beliefs,
opinions, attitudes, and behavior since information comes from a credible source
(celebrity) (Erdogan, Baker, & Tagg, 2001). When consumers internalize an attitude



                                                                                   38
UNIVERSITY OF LUGANO   BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT              2009



or opinion, it will be integrated in his/her belief system (Kelman, 1961). The
credibility attribute is crucial when consumers have a negative position toward the
endorsed product. The target audience has to believe in the celebrity who is endorsing
a product.
The authors state that celebrity attractiveness has a positive impact on consumers.
Attractiveness is considered in this case as physical appearance, intellectual
capabilities, athletic competence and lifestyle. It includes in the definition: similarity
and likeability (McGuire, 1968). Consumers will more easily remember the brand if it
is endorsed by an attractive celebrity. Persuasion is done through a process of
identification. The result of this process is the consumers’ acceptance of information
from attractive endorsers because of consumers’ need of identification with such
endorsers (Kelman, 1961).
The third process through which persuasion occurs is called compliance. When
celebrity has power (Kelman, 1961), he/she is able to administer rewards and
punishments to consumers. Therefore, when a consumer accepts his/her influence he
will hope to obtain a favorable reaction or avoid punishment. However, in the case of
advertising, Belch & Belch (2001) claim that an endorser cannot apply any kind of
sanctions. The power in advertising can be used with an authoritative personality as
endorser. But, generally speaking, power is more effective as an attribute for a face-to-
face communication.

Q-RATINGS
Q-rating is an approach that considers essentially familiarity and likeability of the
celebrity (Knott & James, 2003). The aim of this approach is to help establishing the
value of celebrities. It has been created in USA for over 40 years by a research
company in New York called Marketing Evaluations, Inc. The results of the data
collected establish the consumers’ perceptions and feelings into a “likeability”
measurement (Pringle, 2004). The Q-rating is defined as “the percentage of those
familiar with a personality who rate that personality as “one of my favorites” (on the
questionnaire)” (Knott & James, 2003). This survey is done twice a year so that the
rating is updated as much as possible. The survey is compiled by 1800 participants
from all ages. The data then can be sold to many entities such as television, public


                                                                           39
UNIVERSITY OF LUGANO          BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT                          2009



relations professionals, advertisers, and agents. The criticism of this approach is the
fact that it is based on a simple ratio of likeability and familiarity. Indeed, it can bring
to misunderstanding and wrong interpretation (Knott & James, 2003). There are also
other lists that try to set the monetary value of the celebrities (movies stars). There is
even the “Celebdaq”6 with an online index where people can buy and sell shares in
stars like in a real stock exchange (Pringle, 2004) (Exhibit 11). The Forbes Magazine
makes either celebrities’ rankings but in terms of their earnings over the past twelve
months7.
                                                      Exhibit 11
                                                       Pop Shares




                                                  http://www.bbc.co.uk/celebdaq/lists/POPprofile.shtml



All these rankings are snapshots that can change very quickly. Therefore, it is risky to
choose your celebrity endorser only relying on these rankings because it might be
only a flavor of the month. It would not be a wise decision. That is the reason why
many practitioners use their personal judgment most of the time when they choose
celebrities for advertising campaigns (Miciak & Shanklin, 1994).


According to Agraval & Kamakura (1995), who evaluated the economical impact of
C.E. contracts, they observed through 110 C.E. contracts that the investment in a
personality has value in the eyes of the analysts. Consequently, the value of the stocks
rises the day of the C.E. contract announcement. This explains why the right selection
of a celebrity as a spokesperson is crucial. The literature review is replete of different

6   http://www.bbc.co.uk/celebdaq
7   http://www.forbes.com/2009/06/03/forbes-100-celebrity-09-jolie-oprah-madonna_land.html




                                                                                               40
UNIVERSITY OF LUGANO   BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT             2009



strategies for the selection. Firstly, companies should investigate the real meaning
they want to convey before selecting a celebrity. Depending on their strategies,
companies will then choose the right celebrity selection’s model.


SPORTS INDUSTRY
Yesterday Michael Jordan, today Roger Federer, who is going to be tomorrow’s sports
icon in the celebrity endorsement?
The essence of endorsement in sports industry lies on timing. Indeed, timing is crucial
because companies have to exploit the occasion when an athlete makes the right
performance. Companies also know that public opinion can fade quickly, therefore
timing is the key. The characteristics of sports’ celebrities’ selection rely on other
factors as well.
In sports industry, endorsements are the result of three simultaneous elements: (1)
Athletic accomplishment; (2) Public recognition of the spectacle; (3) Opportunistic
marketing on behalf of a company (Schaaf, 1995).
Marketers usually look for the best athletes to promote their products. They look for
different characteristics, such as the success of the athlete, his/her visibility, and
his/her work ethic. These characteristics are definitely crucial in the athlete’s
selection. The right selection implies different images in the celebrity endorsement
process (Pemberton, Sports Marketing: the Money Side of Sports, 1997). First, the
company’s image is involved by being endorsed by a celebrity. Then the image of the
athlete is either involved in the sense that it will be associated with a certain type of
product. Finally, the overall image to be promoted has to be well decided and well
designed, so that consumers get to the right point.
For the company’s point of view, getting the right athletes implies doing a background
investigation, interviewing the athlete about the product, choosing an athlete willing
to give 100% and able to honor the request. From the athlete’s point of view, it is
important to understand well the terms of the contract and to test the product to
endorse. Indeed, the product might not be functional and the athlete might loose
credibility. The athlete should give his/her full collaboration so that both parties can
benefit from the association (Pemberton, 1997).



                                                                           41
UNIVERSITY OF LUGANO          BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT                         2009



This relationship between an athlete and the company reinforces the association
between three different key groups: (1) Fans; (2) Athletes; (3) The sport itself (Schaaf,
1995). The driver of the whole relationship is money. Companies’ concept is always
the same. They associate their product’s image by integrating a personality to build a
competitive advantage over the competition.
Three basic characteristics of the endorsement business climate should be taken into
consideration and not forgotten (Schaaf, 1995):
            Athletes are expensive, and risky. They are overpaid for doing promotional
            services and demand anything from the company.
            There are few athletes who get the deals, only the famous ones. There is a
            restricted selection.
            Celebrity endorsement enhances the high visibility sports.
The fans want to identify with their favorite athlete, and this is one stage of the
celebrity endorsement strategy – identification. Afterwards, companies wait for the
right timing to exploit the performance of one athlete for their promotional needs.


A successful example of celebrity endorsement strategy done in 2007 was the launch
of the “New Gillette® Champions Program” campaign8. The launch was done with
three new ambassadors by Procter&Gamble and it was a great challenge (Appendix
4). Undeniably, they choose the three best-known and most successful athletes at that
moment: Tiger Woods, Roger Federer, and Thierry Henry.


[The Gillette name is synonymous with being the best. These three athletes have proven they have what it
takes to be a champion on the course, the court or the pitch. They were chosen not only for their
outstanding sporting performances, but also for their performance off the field, in their charitable actions,
support of social causes or their reputations as icons of true sporting values. ] Chip Bergh, President of
Global Grooming at Gillette.


This was a huge investment but they won their bet. The campaign was a success. It
was designed for more than 150 markets in the first year of the launch. The three
ambassadors were consistently chosen for their sporting performance as well as for
their behavior away from the game.

8   http://www.ch.pg.com/presse/0701_gillette_champs/index_fr.shtml




                                                                                         42
UNIVERSITY OF LUGANO   BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT               2009



   2.6 Overview of models and theories

The review of the existing theories and models about celebrity endorsement showed a
real focus on celebrities’ attributes. The attributes of the celebrity are in fact a crucial
step during the selection phase. Three attributes are particularly present in literature
review: credibility, familiarity, and attractiveness. These attributes appear to be the
most relevant while choosing a celebrity.


Most of the models/theories claim that the attributes are related to specific processes.
Indeed, celebrities’ attributes impact on consumers can be explained through these
processes, such as internalization, identification, and compliance. It is very important
for companies to understand these processes before choosing the right celebrity.
Different attributes lead definitely to different processes. This is the reason why
companies need to be clear on what kind of strategy there are ready for.


Some models focus only on few attributes which is not a realistic way of building a
celebrity endorsement strategy. This is the case of the “Source Credibility model”
which measures only the expertise and trustworthiness. Then, the “Source
Attractiveness model” demonstrates a very powerful attribute but still is not enough
to measure the celebrity endorsement effectiveness and moreover it might not lead
every time to a purchase intent. “The Product Match-up hypothesis” follows the same
problematic of considering only few attributes. Finally, the “Q-ratings” approach is
based only on two attributes, which is not enough for companies to trust it at 100%.
The FRED principle and the 4F’s are two models that give a quick overview of what
celebrity endorsement should be constituted of, but it is a very light overview with
few attributes and few dimensions of the strategy. The 4F’s, in any case, includes also
the financial dimension.
A more complete approach is the “Source Attributes and Receivers Processing Modes”
which goes from the attributes to the processes, but focusing too much on consumers’
attitudes.




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  • 1. Faculty of Master in Communication Corporate Sciences Communication MASTER THESIS, 2009 BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 Supervisor: Dr. Patrick Cotting Author Cristel Garcia 04-984-704 cristel.garcia@lu.unisi.ch cristel_garcia@hotmail.com
  • 2. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 I. AKNOWLEDGEMENTS This Master’s thesis is the accomplishment of my university “journey”. The theme of the thesis arose during this journey, while knowledge was sent from everywhere inside the university’s walls. Writing this thesis made me gain knowledge on a subject for me very interesting and important in today’s society with consumer power. First of all, I would like to thank my supervisor Patrick Cotting for all support and expertise, and who has given me valuable guidance. In addition, I would like to express my gratitude to the managers who gave me a little of their precious time and who have been helpful in answering my questions with their remarkable knowledge: Roberto Costa, Head of Advertising & Internet at Swatch; Valérie Bastardoz, Head of Communication at BCV; and Sandra Helfenstein, Deputy Head Administrative Unit Communication at SFU. I would like to say a special thanks to my parents and sister, Inês, who always gave me support during this period of my life. Finally, I would like to thank all the persons who gave me encouragement and helped me throughout this period of study: Davide, Sophie, Anne, Adrien, and of course Massimo. I have a last thought for all my colleagues, who have also accomplished their final work and who have shared with me their doubts, despair, happiness, and finally pride of having ended the work. Good luck to everyone. 2
  • 3. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 II. EXECUTIVE SUMMARY This Master’s thesis is a research about one popular marketing strategy: celebrity endorsement. Indeed, even though celebrity endorsement represents some risks, it is a largely used method to reach competitive advantage by companies. Today, companies spend millions each year for the endorsement of their products/services by celebrities. It is always a great challenge for marketers to determine the meaning consumers associate with the brand in order to select the right celebrity and to build the right celebrity endorsement concept. Therefore, it was of a great interest to investigate this topic further in details. The initial idea of this thesis has been activated by the lack of information about celebrity endorsement overall strategy. In fact, there are many factors influencing the effectiveness of a celebrity endorsement strategy which are not taken into consideration well enough. This thesis analyzes existing literature and contains suggestions about the development of such a strategy taking into consideration all the elements susceptible to have an influence on its effectiveness. The approach of this study is first qualitative with the examination of existing theories and methods about celebrity endorsement. After a literature review research on the celebrity endorsement concept, findings have shown that there was too much focus on the celebrity’s attributes selection and not enough focus on the other elements, such as the company (product/brand), media environment, and customer behavior. Many factors are an integral part of the strategy as well as the celebrity’s attributes. Then, the aim of the second part is to consider the gaps in the existing theory and to create a model able to bring together each factor needed to reach the effectiveness of celebrity endorsement strategy. The core of the thesis is represented by a suggested model of the overall celebrity endorsement strategy which should lead to the 3
  • 4. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 maximization of effectiveness. This model was thought as a solution for companies willing to reach a successful campaign. The model involves all dimensions and success factors needed to develop an effective strategy. It was designed with a strong focus on filling the lack of elements to build an effective celebrity endorsement strategy. These elements were called the success factors of the strategy. The model was designed on the basis of an existing sponsorship model, which was an excellent base due to its marketing roots. In order to check the feasibility of the suggested model, companies have been interviewed about their own celebrity endorsement strategy and about the model. The result of these interviews was positive and showed that companies must consider all success factors to reach a success campaign. Sometimes, some factors are underestimated or forgotten, which enhance the importance of using a model as a step-by-step toolkit. Moreover, while analyzing the model, another use of the model appeared. Indeed, the model can also be used as a measurement tool, which is essential for a company after doing such a campaign. To monitor celebrity endorsement success a set of measures is proposed. The aim of the thesis was to try to meet companies’ expectations and needs with a model proposal which will solve some issues within the whole celebrity endorsement management. 4
  • 5. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 III. TABLE OF CONTENTS I. AKNOWLEDGEMENTS .................................................................................................................... 2 II. EXECUTIVE SUMMARY ................................................................................................................... 3 III. TABLE OF CONTENTS...................................................................................................................... 5 IV. THEORETICAL PART ........................................................................................................................ 7 1. INTRODUCTION ............................................................................................................................. 8 1.1 Problem Discussion.............................................................................................................. 8 1.2 Purpose and Research Questions ................................................................................... 9 RESEARCH QUESTIONS ................................................................................................................................................................ 9 HYPOTHESIS ...................................................................................................................................................................................10 1.3 Delimitations ....................................................................................................................... 10 2. DEFINING CELEBRITY ENDORSEMENT – LITERATURE REVIEW .......................... 10 2.1. Definition............................................................................................................................... 10 2.2. Origins .................................................................................................................................... 12 THE SPORTS INDUSTRY ............................................................................................................................................................13 THE BEAUTY INDUSTRY ...........................................................................................................................................................14 THE MERGER OF BRANDS AND CELEBRITIES ..............................................................................................................16 THE WATCHTOWER ...................................................................................................................................................................19 THE FAN POWER ..........................................................................................................................................................................20 THE VISIBILIY OF CELEBRITIES ...........................................................................................................................................20 THE CELEBRITY INDUSTRY ....................................................................................................................................................21 2.4 Existing Theories and Models ....................................................................................... 23 PROS AND CONS OF CELEBRITY ENDORSEMENT STRATEGY ..............................................................................23 (1)SOURCE CREDIBILITY MODEL ........................................................................................................................................26 (2)SOURCE ATTRACTIVENESS MODEL .............................................................................................................................27 (3)THE PRODUCT MATCH-UP HYPOTHESIS ..................................................................................................................28 (4)THE MEANING TRANSFER MODEL...............................................................................................................................30 2.5 Celebrity Selection ............................................................................................................. 31 COMMON CELEBRITIES’ ATTRIBUTES ..............................................................................................................................31 THE FRED PRINCIPLE ................................................................................................................................................................36 4F’s.......................................................................................................................................................................................................37 SOURCE ATTRIBUTES AND RECEIVER PROCESSING MODES................................................................................38 Q-RATINGS.......................................................................................................................................................................................39 SPORTS INDUSTRY ......................................................................................................................................................................41 2.6 Overview of models and theories ................................................................................ 43 VI. PRACTICAL PART ....................................................................................................................... 46 5
  • 6. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 3. MODEL PROPOSAL ..................................................................................................................... 47 3.1 The Management Circle for C.E. Strategy.................................................................. 47 OVERALL STRATEGIES ..............................................................................................................................................................48 DEFINITION OF BRAND PERSONALITY ............................................................................................................................49 DEFINITION OF C.E. STRATEGY ............................................................................................................................................51 IMPLEMENTING & CONTROLLING C.E. STRATEGY.....................................................................................................52 3.2 The Drivers of C.E. Strategies ........................................................................................ 53 THE COMPANY AS A PRINCIPAL DRIVER OF C.E. STRATEGIES ............................................................................53 THE BRAND .....................................................................................................................................................................................54 THE CELEBRITY PERSPECTIVE.............................................................................................................................................54 THE PARTNERS’ PERSPECTIVE.............................................................................................................................................55 THE MEDIA PERSPECTIVE.......................................................................................................................................................55 THE PUBLIC PERSPECTIVE .....................................................................................................................................................55 3.3 The C.E. Effectiveness Model ......................................................................................... 56 4. QUESTIONNAIRE: Celebrity Endorsement Strategy CHECK ..................................... 62 5. COMPANIES’ INTERVIEWS ..................................................................................................... 64 5.1 SWATCH ................................................................................................................................ 64 SWATCH HISTORY .......................................................................................................................................................................64 PROMOTIONAL ACTIVITIES AT SWATCH ........................................................................................................................64 INTERVIEW WITH ROBERTO COSTA, HEAD OF ADVERTISING & INTERNET (23.07.09) .......................65 OBSERVATIONS ................................................................................................................................................................................67 5.2 BCV – Banque Cantonale Vaudoise ............................................................................. 67 BCV HISTORY ..................................................................................................................................................................................67 CELEBRITY ENDORSEMENT ACTIVITIES AT BCV .......................................................................................................68 BCV’S CELEBRITIES .....................................................................................................................................................................68 INTERVIEW WITH VALÉRIE BASTARDOZ, HEAD OF COMMUNICATION (05.08.09).................................69 OBSERVATIONS.............................................................................................................................................................................75 5.3 SWISS FARMERS’ UNION (SFU) ................................................................................... 75 HISTORY............................................................................................................................................................................................75 CELEBRITY ENDORSEMENT ACTIVITIES AT SFU ........................................................................................................76 SFU’S CELEBRITIES .....................................................................................................................................................................76 THE ACTIVITIES OF THE CAMPAIGN .................................................................................................................................78 INTERVIEW WITH SANDRA HELFENSTEIN, DEPUTY HEAD ADMINISTRATIVE UNIT COMMUNICATION ...........................................................................................................................................................................78 OBSERVATIONS.............................................................................................................................................................................80 6. MODEL ADJUSTMENT AND SUGGESTIONS ...................................................................... 81 7. GENERAL CONCLUSIONS......................................................................................................... 84 VII. APPENDICES ................................................................................................................................. 87 BIBLIOGRAPHY.......................................................................................................................................112 6
  • 7. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 IV. THEORETICAL PART 7
  • 8. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 1. INTRODUCTION Jennifer Anniston, Tiger Wood, Roger Federer, Beyoncé: these names have become symbols of the role of endorsers in advertising. Companies invest millions of dollars to sign up with celebrities to endorse their products. This is not a new phenomenon; it goes back to more than a century. However, today’s use of celebrities in advertising strategies is becoming more and more sophisticated and complex. Because of its cost, usually celebrity endorsement strategy is used by big firms. Nonetheless, smaller companies with limited budgets are starting now to use celebrities to promote their products. However, companies should not select a celebrity before knowing if there is a need for a celebrity endorsement. Indeed, many brands get by quite well without using personalities. In this paper, many factors used for the selection of celebrity endorsers have been identified through academic literature review, such as celebrity attractiveness, credibility, product-celebrity match, message and product type, target characteristics, and general meanings of celebrities. 1.1 Problem Discussion From a marketing communication point of view, it is essential that companies plan differential strategies to create competitive advantage. The use of celebrity endorsement is a widely used strategy to achieve this competitive advantage. This type of marketing strategy has become popular but it involves certain risks. Hence, to avoid the risk of a failure, companies should prepare in detail this kind of strategy. That means, they must think of each dimension, factor, and driver involved in the process of celebrity endorsement. This leads to the aim of this thesis where through an exploratory research a deeper understanding of an effective usage of celebrity endorsement will emerge, as well as the development of suggestive ideas. In the literature review, findings are varied and incoherent regarding the way of choosing the right celebrity endorser. According to Byrne (Byrne, Whitehead, & Breen, 8
  • 9. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 2003), choosing the right celebrity is the problem companies are facing. Companies need help in determining a model which will give them the way to reach effectiveness of celebrity endorser. A further research is needed to help them selecting celebrity endorsers taking into account every dimensions, factors, and drivers. Indeed, most of the authors analyzed the celebrity’s attributes to be a good endorser, but is it enough to build a good strategy? The product is sometimes forgotten and too much focus is on the celebrity, while the focus should be on the product. The product and the celebrity need to match together, but there is either an environment around them and also an audience. There are too many components that must be taken in consideration during a celebrity endorsement process. 1.2 Purpose and Research Questions Many of the previous research on celebrity endorsement have explored celebrities’ attributes, and celebrity endorser’s influence on consumer behavior. What is really missing in these studies is a global strategy of celebrity endorsement that would give an entire overview of the process to companies willing to go on with celebrities as spokespersons for their brand, product/service. The lack of research in this area gave me the motivation for the present thesis. The purpose of this study is stated as follows: To gain a deeper understanding of the overall celebrity endorsement strategy in order to develop an effective step-by-step model for companies willing to adapt this kind of strategy. RESEARCH QUESTIONS I. What is the complete list of factors involved in the celebrity endorsement process which leads to an effective strategy? II. Who are the drivers involved in the celebrity endorsement process who influence the strategy? 9
  • 10. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 HYPOTHESIS I. Celebrity attributes are not the only success factors to reach the effectiveness of celebrity endorsement. II. Each factor must fit together in order to achieve the effectiveness. III. Each factor and driver should be controlled as much as possible to an effective strategy. 1.3 Delimitations This research involves many aspects of celebrity endorsement. Therefore, there will be restrictions because of time, and resources. Further, the model proposal will not be tested by a company, but only assessed by few companies since the time for this study is limited. 2. DEFINING CELEBRITY ENDORSEMENT – LITERATURE REVIEW In this section, relevant theories and models to the research questions will be presented. 2.1. Definition [The most effective way to use a celebrity is that you want people to relate to the product through that celebrity.] (Levine, 2003) The last 100 years, endorsement strategies provided many memorable moments. A lot of people remember Michael Jordan endorsing the Nike shoe, as well as Tiger Woods with the Nike golf equipment. Then, Michael Jackson endorsed Pepsi singing and dancing, and Claudia Schiffer with her blond hair endorsed Elvive for L’Oréal. Today, Nespresso had a huge success with the “What else?” sentence said by Georges Clooney. So, what is all about endorsement strategy? 10
  • 11. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 A company using endorsement is promoting the company’s product by the means of the personal recommendations of a celebrity, a person who is sufficiently well known to influence the potential consumers of that product or brand. In other words, a celebrity is in a way sponsoring the company’s product, and he/she is paid for doing so (Bagehot, 1998). The concept is simple. A celebrity is chosen to express approval of a product or service. Then an agreement between the celebrity and the company, which represents the product being endorsed, is signed (Pemberton, 1997). The importance of this strategy is not only the increase revenue of the company, but in how the celebrities add value to a company, brand or product (Amos, Holmes, & Strutton, 2008). It is important to differentiate endorsement and licensing. Indeed, endorsement is very similar to licensing except that the name of the endorser is used to promote a product or brand, while the endorser’s name in licensing is on the product (Lipsey, 2006). Endorsement means the “stamp of approval” of a celebrity to a product, service or brand (Pemberton, 1997). When David Beckham1 accepted to endorse Giorgio Armani underwear, he accepted to give his “stamp of approval” for the product and brand. It is estimated that he received 25-28 millions dollars for a three year contract (Carlo, 2008). He will be Giorgio Armani’s “face” for a while. So, the “stamp of approval” should be a real one to transmit credibility and create message persuasiveness. Today, celebrities cannot pursue themselves endorsement deals and contracts because of the visibility industry’s growing. Indeed, celebrities need the help of experts to take care of their image. There are different ways of using celebrities to endorse products. There is the tools-of-the-trade endorsements when celebrities endorse products used in the course of their work, for example Anna Kournikova who endorsed Adidas. Then, there are the non-tool endorsements when celebrities endorse products that are not related with their work, for example Anna Kournikova who endorsed Omega watches (Rein I. , Kotler, Hamlin, & Stoller, 2006). 1 Appendix 2 11
  • 12. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 According to these definitions, celebrity endorsement is a well-liked strategy used by companies in order to add more value to their brand/product by associating them to a celebrity. This association will give to consumers a way of choosing a product by relating it to someone they know. 2.2. Origins The first celebrity who endorsed a product was a famous English actress, Lillie Langtry, with the Pears Soap in 1893 (Exhibit 1). She was also the first one that affected negatively the desired brand image of a company because of her reputation for being promiscuous (Louie, Kulik, & Jacobson, 2001). Exhibit 1 Lillie Langtry endorsing Pears’ Soap www.lillielangtry.com From Lillie’s endorsement till today, the use of celebrity spokespeople has been on the rise. In 1975, a study reported that 15% of prime time television commercials featured celebrities and by 1978 the number was reported to be over 20% (Kamins, Brand, Hoeke, & Moe, 1989). Today, during a Super Bowl you will watch 32% advertising with celebrities (Carlo, 2008). The celebrities’ business is always increasing. 12
  • 13. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 THE SPORTS INDUSTRY As everyone can observe, the sporting goods industry often uses the celebrity endorsement strategies. Indeed, athletes are used to market a wide range of products, services and brands. Especially, shoe companies are well-known for those kinds of strategies. In 1997, “Sports Services of America” did a survey which results show that sports celebrities’ endorsers have increased the value of products by more than 25% over the products of competitors that do not use endorsement strategies (Pemberton, 1997). Many outside reasons have influenced the athletes’ potential of doing endorsement during the last 30 years. One reason is the media’s desire to write about an athlete’s personal behavior, like the actors and singers. Today, athletes, actors and singers’ life is scrutinized from every angle. Therefore, it is much difficult to choose an endorser. In the past, athletes’ bad habits were not known and it made no distort to the companies they were working with. Many well-known athletes made the history of celebrity endorsement. Babe Ruth, member team of the New York Yankees, was the first celebrity in sports who did a media endorsement. The deal was made in 1919 and the sportsman was paid five dollars to describe each homerun he hit in a written exclusive to United Press International (Schaaf, 2004). From 1936 to 1957, the business of sports evolved in an impressive way. Indeed, during these 20 years, the financial and social architecture of the sports industry changed a lot. The mass media evolved too embracing the sports industry, which did the same in return. Then in the late 1940s, television increased the move of sponsorship and with it celebrity endorsement. Today, with the immense evolution of technologies, the sports industry truly profits from the multiple print, radio, TV, and internet newspeople that cover all the sports events in multiple languages and for multiple outlets. Consumers have many sources of receiving content: newsprint, radio, TV, computer, cellphone, and pager. All these technological improvements made life easier for companies who want to market their products. Celebrity endorsement strategies can be sent through all these means. Other names that made the history of 13
  • 14. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 celebrity endorsement are Michael Jordan, Tiger Wood, Joe Louis2, and Wayne Gretzky. They were more than just sportsmen. They were mega-stars and businessmen. Through the years, convergence of innovation and consumer marketing has built a multibillion-dollar sports industry that will continue to expand all over the world year after year (Schaaf, 2004). The sportsmen understood how the sports industry is working and they are all becoming sports-businessmen, such as David Beckham3. They also understood that it is more than a simple endorsement. Celebrity endorsement strategies also measure an athlete’s popularity away from the action. THE BEAUTY INDUSTRY The beauty industry begins in the mid-nineteenth century where we can trace advertising aimed at women. The development of this industry came from the marketing of beauty products. However, this industry truly grew in the 1920s and 1930s. Then, after the Second World War, the beauty industry evolved and became the beauty industry we all know today (Black, 2004). The interest of women for beauty products was related to their new sense of identity as consumers. The magazines played an important role in inducing women into the world of brand-name products and smart shopping (Black, 2004). The Pears Soap, as previously said, was the first product endorsed by a celebrity who was a famous actress. Many others followed, such as Marilyn Monroe4 with two famous endorsements for Westmore Hollywood Cosmetics. Stars are used by many people as role models, even more in the area of personal appearance (Pringle, 2004). A new standard of beauty appeared in Hollywood in the 1930s. Indeed, the stars industry created a kind of gold standard of beauty around the Hollywood stars. Cinema able to diffused a standardization of taste. In 1950s, Hollywood creates more than a standardization of beauty; it produced a golden age of glamour where Hollywood stars were seen as deities with an unapproachable beauty (Cashmore, 2006). Today, almost every hair care or cosmetics company has a celebrity “face” to represent its products. Hair products and cosmetics usage by women is still growing. 2 Appendix 1 3 Appendix 2 4 Appendix 3 14
  • 15. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 The role of celebrities in the beauty industry is fundamental. Celebrities create trends that had always been followed. It is already 200 years that celebrities are endorsing hair care products. Recently, Jennifer Aniston, actress, was rated as one of the most powerful stars for the hair care industry (Pringle, 2004). Nowadays, the beauty industry knows that celebrities sell cosmetics. Many examples can prove that in this industry the best seller are the celebrities. There are many famous celebrities in this industry. Some examples: Catherine Zeta-Jones with Elizabeth Arden; Beyoncé Knowles with L’Oréal; Madonna with Max Factor; Kate Moss with Rimmel; Pierce Brosnan with L’Oréal. The advertising of the beauty industry has long time being criticized because it is accused to create idealized stereotypes that in some way forces women to follow. However, this industry will not change for some time. Celebrities will keep on being the models of many women, and men for beauty concerns. 2.3 Celebrity CultureError! Reference source not found. [A celebrity is a person whose name has attention-getting, interest-drawing, and profit- generating value.] (Rein, Kotler, & Stoller, 1997) Celebrity culture is all around us and sometimes even invades us by shaping our lives, conduct, style and manner. It affects many fans, but also entire populations with the shift from plain consumer to aspirational consumer. Celebrities made a real change in the media and in the consumer society. Celebrities emerged from the sports and entertainment industries. They get attention of people by being visible in the media. Usually, celebrities are first noticed through their professional lives, but then people get attracted by their private lives as well. During the 1980’s and 1990’s, celebrity culture was a real part of the social life. This celebrity culture was supported by the global media that promoted celebrities usually from entertainment and sports industries (Cashmore, 2006). According to Len 15
  • 16. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 Sherman (1992), once a time, people admired heroes such as statesmen, scientists, explorers and military figures because of their heroic accomplishments. These heroes today have been exchanged by many celebrities that became examples for the society even without accomplishing heroic actions. They are simply figures who embodied public’s convictions and hopes and therefore they are being admired as heroes of the society to be respected. Sherman means that today an athlete who wins a football game seems to have conquered the Everest. The attraction of the public is not necessary related to the celebrity’s talent, since there is no required relationship to his/her celebrity status. Much of the time, a celebrity does not have talent but only presence. [We have forsaken our traditional heroes and replaced them with actors and athletes…where once admired people who do great things, now we admire people who play people who do great things.] (Sherman, 1992) Literature review shows that celebrity has different meanings. A first consideration is that celebrity is a cultural change towards a culture that privileges the visual and sensational. A second one is that a celebrity is someone that has an innate quality that is discovered by industries of sports or entertainment. A third consideration is the fact that a celebrity evolved through the process of commodification and became a “product” that makes promotion, publicity and advertising (Turner, 2004). Indeed, as soon as someone grows up in the scales of public visibility he/she can start to sell. By being a “product”, celebrities can be bought and sold in a marketplace. Celebrities became a kind of raw material that need to be refined, developed, and packed before being marketable. The commodification process which makes people tradeable and ready for the consumption is a key process in the celebrity culture (Cashmore, 2006). THE MERGER OF BRANDS AND CELEBRITIES Butterfield developed a model (Exhibit 2) that shows how celebrities work well for the brands’ promotion. One fundamental thing about working with celebrities for the brands’ promotion is that since they are famous, they will be more likely “invited in” by customers (Pringle, 2004). This is one consideration that Butterfield pointed out in order to better understand the subscription decision process. Butterfield’s model is 16
  • 17. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 the result of many works done on countries, issued causes, and charities. He claimed that there are two key factors for the identification process, awareness and familiarity, which can somehow stand for the term “subscription”. However, for the creation of a real relationship, Butterfield considered that the factor visualization must be integrated in between. Exhibit 2 The subscription decision process (Pringle, 2004) Explanation of the model: Stars have high (1) public awareness as well as high (2) visibility which give people a sense of (3) familiarity. If the fit between the celebrity and the brand is well created, then it will give a meaningful (4) resonance and a positive (5) disposition. These steps lead to (6) subscription which is the last step to build a good relationship (Pringle, 2004). In a world, where transnational companies, such as AOL Time Warner, News Corporation, Sony, and Disney, build their power by diversifying one media form across many media platforms, celebrities became the bond to connect all these cross media processes. Celebrities allow the transfer from one format to another through a branding mechanism. This mechanism is part of the celebrity routine which is made of cross-promotions (Turner, 2004). For example, a movie star will promote the new movie by going in different talk shows and at the same time the movie star will promote a new hairspray because of the spontaneous interest of the audience related 17
  • 18. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 to the launch of the new movie. Everything is correlated and that is the reason why it is called a cross-promotion. [The cast of characters that make up today’s generation of celebrities couldn’t be more saleable if they had barcodes]. (Cashmore, 2006) Celebrities make money and it is a fact. They market everything with their names and images because they simply attract audiences. Therefore, celebrity endorsements are used by marketers to brand their products, as well as television programs use celebrity appearances to build their audiences. They all make a kind of merger between the product to be promoted and the celebrity who will promote it. As in every merger, the two partners need to be compatible to make it work. The celebrity is a commodity, as explained in last section, that will “marry” another commodity and as in every relation an understanding of both parts is crucial. The celebrities are well conscious of their power and therefore they develop their public personality as a valuable asset that is defined from all the personal and career choices. They became real “commodities” and even if they do not like this word, they work on strategies to increase the value of this commodity to the industry. There are various ways celebrities can work for a brand. HPI, a leading UK research company, developed a model (Exhibit 3) where we find all the different modes a celebrity can be exposed for a brand. Exhibit 3 Five ways a celebrity can work for a brand (Pringle, 2004) 18
  • 19. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 According to HPI, these terms can clearly be connected or even overlapped in a celebrity endorsement strategy (Pringle, 2004): Testimonial: the celebrity is a spokesperson or a mouthpiece for the brand. Imported: the celebrity plays a role that the audience already knows from TV or movie appearances. Observer: the celebrity plays the role of commenting about the brand. Invented: the celebrity performs a part invented only for the brand. Harnessed: the celebrity is tied to the storyline of the brand advertising; the character of the celebrity can evolve through it. The UK company stated that with the testimonial and imported mode the strategy is less effective because of the imposed perception, while with observer, harnessed, and invented mode, the customers perceive more integration between celebrity and brand. THE WATCHTOWER Nowadays, the public is no more passive. The public is asking more from celebrities, something different. The public is standing in a “watchtower” and “celebrities must surrender themselves to life” as they are standing in a gold prison (Cashmore, 2006). The fans want to watch and inspect whenever they want. If celebrities do not surrender, the public might lose interest and go on with other more interesting celebrities. As soon as the public is no longer interested, he can send it to oblivion and leave it there. Being active, the consumers can promote a celebrity career or destroy it by simply discarding him/her as a real commodity. The public knows it and this is its true power. Today, consumers have more power collectively on celebrities than ever and they like it because they know that they are not just observers anymore but also players. Consumers are players and creators of celebrities with their desire for new celebrities’ figures. This also explains the new trend in consumer behavior. In the past, consumers needed to own goods, but often could not afford everything. Now, consumers want to emulate celebrities’ lives. Even if it is hard to reach the same level of life, they try to do as much as they can by reaching the nearest thing. 19
  • 20. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 THE FAN POWER Cashmore described the word “fan” as a “description of followers, devotees, or admirers of virtually anybody or anything in popular culture” (Cashmore, 2006). He defined different types of fans. The first category, the low worship fans, involves people who just read about celebrities. The second category of fans is the entertainment-social character, which concern the one who follow kindly the celebrities. The third, regards those who are really interested in knowing the celebrities’ lives, called the intense-personal feelings. Finally, there are the extreme worshippers who are really obsessed by the celebrities (Cashmore, 2006). This close involvement with celebrities’ lives is called by Neil Alperstein (Alperstein, 1991) the “artificial involvement”. He said, in his study, that this involvement helps people in a certain way making sense of their reality by integrating celebrities in daily life. In Benson Fraser and William Brown’s study with Elvis’ fans, they explained the fans’ attitude with three possibilities (Fraser & Brown, 2002). The first is that “ordinary people develop extraordinary psychological relationships with celebrities, whether living or dead. The second possibility is the fact that people consider celebrities as role models to follow. The last one is that “fans adopt what they see as a celebrity’s attributes, including his or her values and behavior”. [Consumer product companies are always looking for that next certifiable star, because the impact that individual has in his public sphere of influence. The recognition and loyalty of his fans means sales in terms of cereal, video games, chewing gum, shoes, hardware, and just about anything.] (Schaaf, 1995) The fan has a real power towards the celebrities. Indeed, he/she can change their lives in a positive and negative way. The fan can highlight the celebrity, but can also press the “delete key” of the computer and make celebrities disappear from the stage. It is a true influence on a life of someone. It is a terrific power. It is the “fan power”. THE VISIBILIY OF CELEBRITIES In 1999, Forbes magazine introduced “Celebrity Power 100” with the ranking of the celebrities based on stars’ brand franchise, and not based on the fortune. This shows 20
  • 21. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 how celebrities’ visibility is important. There are different dimensions in the visibility hierarchy which are space and time. Space can be illustrated with a pyramid made of five levels: (1) Invisibles; (2) Local Visibility; (3) Regional Visibility; (4) National Visibility; (5) International Visibility (Rein I. , Kotler, Hamlin, & Stoller, 2006). Time is the enemy of many celebrities. Indeed, there are few celebrities that become a legend and many that are often one-day or one-year well-known people. THE CELEBRITY INDUSTRY According to Rein et al. (1997), there are many sub-industries that support the celebrity industry. Coordination between these sub-industries is needed in order to produce and promote brands. Moreover, the celebrity industry (Exhibit 4) is also defined to coordinate the services that the sub-industries provide in order to produce and promote the celebrity. Therefore, it works in both sides, the entertainment and the communications industry (Rein, Kotler, & Stoller, 1997/2006). The first industry – entertainment industry – consists of theatres, music halls, dance halls, sports arenas, museums, county fairs, sport games and movie studios. This industry was born mostly in Hollywood. The second industry – communications industry – is the media channels, through which we know the visible people. Many images, products and stories about these visible people are sold through the media channels, such as television, radio, film, cable, magazines, newspapers and internet. The promotion of these two industries – entertainment and communications industries – is made with the third industry which is the publicity industry. It encompasses publicists, PR firms and advertising agencies which constitutes the largest form of promoting, and marketing research firms. Then follow the representation industry composed by agents, personal managers, and promoters, which handle the celebrities by negotiating engagements for them in exchange of a fee or commission. Some agents, few of them, do not only sell their clients as they are. They try to offer a “total service” to their clients giving them all the support they need to improve themselves day by day. Unfortunately, there are few agents acting like that. That is the reason why the appearance and the coaching industries exist – to give personal consultancy. The appearance industry is one of the fastest-growing 21
  • 22. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 components because of the high degree of importance of the celebrity image. This industry includes makeup specialists, hairstylists, clothing stylists, color consultants, image coordinators, dermatologists, nutritionists and plastic surgeons. This is a real competitive environment that is growing every day. The coaching industry is related to the professional performance of the celebrities. It helps celebrities improving different skills, such as dance, music, speech, that aspire to be highly visible. Then, the legal and business services industry gives different kinds of legal, accounting and investment advice. Finally, the endorsement and licensing industry is a growing industry since marketers understood that it is a powerful mean to distinguish a product or service from the competitors (Rein I. , Kotler, Hamlin, & Stoller, 2006). The celebrity industry earlier than today was not as transparent since the industry did not want to show all the activities behind the trade. Nowadays, the industry is well- known and transparent. Closing the eyes to this industry is impossible because it is anchored to the fabric of our economy and culture. Exhibit 4 Structure of the Celebrity Industry (Rein, Kotler, & Stoller, 1997) To make the system work it is necessary to know the existence of all these industries that have a crucial role in the development of the celebrity industry. There are many 22
  • 23. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 key figures too within these industries that must be taken into account – agents, managers, and publicists. Of course, there are many variations depending from market to market. The economic interdependencies between these figures and the celebrities form a bind that makes the key to the structure of the celebrity industry. The power of the celebrity industry is limited due to many conflicts of interests which create gaps in its understanding of the context. For example, we know that the system does not work perfectly for the publicity industries’ interests because of many scurrilous revelations of many celebrities (Turner, 2004). 2.4 Existing Theories and Models PROS AND CONS OF CELEBRITY ENDORSEMENT STRATEGY During the last years, celebrity endorsement became a well-known communication strategy with the aim to build a congruent image between the brand and the consumer. This is a real challenge for marketers who have to find the right endorser who will fit with the brand of the company. The challenge is to determine the meaning consumers associate with the brand. Therefore, before starting a celebrity endorsement strategy, the company must be sure to have chosen the right communication strategy in order to reach consumers’ expectations. Marketers must examine thoroughly the fit between the celebrity and the product before launching any campaign. Before taking any decisions, the company should check all the pros and cons of having a celebrity endorsing its product. Even if there are significant potential benefits in using a celebrity endorsement strategy, companies should know that there are also significant costs and risks. According to Erdogan (1999), there are as many potential advantages in a celebrity endorsement as potential hazards (Exhibit 5). 23
  • 24. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 Exhibit 5 Pros and Cons of Celebrity Endorsement Strategy POTENTIAL ADVANTAGES POTENTIAL HAZARDS Increased attention Overshadow the brand Image polishing Public controversy Image change and Brand introduction overexposure Image change and loss of Brand repositioning public recognition Underpin global campaigns Expensive (Erdogan, 1999) According to Erdogan (1999), the advantages are significant and companies trust that such a strategy will generate desirable campaign outcomes. Today, consumers easily can choose what advertise commercials they would like to see by zapping or watching TV programs without commercials. Therefore it has become more challenging for companies to get consumers’ attention and penetrate the clutter of brief and numerous advertising spots. The competition is hard, so a great strategy is needed to stand out from the rest. Celebrities help in doing so and improve the communicative ability by cutting through excess noise in a communication process (Miciak & Shanklin, 1994). With celebrity endorsement, an authentic positioning of the brand/product can easily be done. Moreover, the exclusivity of the celebrity is an essential key, as well as the gain of credibility amongst consumers and also retailers (Cotting, 2007-2008). The image polishing can also be done through a celebrity endorsement strategy when a company is going in the wrong direction. Indeed, when a company’ image is suffering, using celebrity’s image will transfer his/her own image to the band or product. A good way of introducing a new brand/product is to design it around the personality of a celebrity. It will give direct appeal and the image of the celebrity will instantly be pushed over to the product. 24
  • 25. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 One important advantage of this strategy is the creation of an emotional attachment with the target group (Cotting, 2007-2008). Although celebrity endorsement strategy has significant returns, sometimes celebrities’ qualities become undesirable and therefore it is always a major challenge to select and retain the right celebrity avoiding potential pitfalls. To prevent the potential hazards, Erdogan states that pre-testing and planning carefully the strategy are crucial for the success of the campaign. This will avoid the overshadowing of the brand by the celebrity. Indeed, many times a celebrity endorsement strategy focuses too much on celebrity and forgets to focus on product. By consequence, the product is forgotten by the consumers because the attention is too much paid over the celebrity. [When a brand – either new or established – associates itself with an already established personality, it can enhance its own brand identity or be swallowed up by the larger identity it has annexed.]. (Levine, 2003) Another well-known tactic is to buy a death and disgrace insurance for the contract and to cautiously put provision clauses in the contract so that in any case of injury the company will be a minimum insured. It is either essential to mention in the contract what is the exact role of the celebrity and should be a great idea to put restriction clause to avoid too many endorsements with other brands. Indeed, the overexposure is only an advantage for the celebrity but not for the company. The consumer might be confused with too many brands endorsed by the same celebrity. The selection of the celebrity is critical and it is fundamental to examine at what life-cycle stage the celebrity is and how long this stage will last. The image of a celebrity changes during his/her life but a brand should not be exposed by this change. In fact, if any kind of image change might happened during the campaign then it can bring a loss of public recognition. According to Erdogan, celebrity endorsement is also a powerful tool to enter foreign markets. Indeed, the international visibility of many celebrities can be used as a tool to enter new markets, using the same campaign for different countries. 25
  • 26. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 Celebrity endorsers can also be compared with created characters endorsers. Instead of using celebrity endorsers, many companies choose to create a character who will endorse its products. This strategy is able to build a character that is congruent a hundred percent with their brands and target audiences. While there is an absolute control over this kind of strategy, celebrity endorsement has limited control with the celebrity’s persona. Some studies prove that with created characters the link between the character and the product is more effective. Following this reasoning and according to the Classical Conditioning Paradigm5, consumers have a stronger association with created characters than with celebrity endorsers. The reason is that celebrity endorsers are linked to many other things whereas the created characters are linked only to the product. As already mentioned, the choice of a celebrity endorsement is an important task. Therefore, considerable studies have been conducted in order to create models for endorsement strategy. There are four significant models created between 1953 and 1989. The initial model was the Source Credibility Model constructed by Carl I. Hovland and his associates. Then three other models follow it: the Source Attractiveness Model (McGuire, 1985); the Product Match-Up Hypothesis (Forkan, 1980; Kamins 1989, 1990); and the Meaning Transfer Model (McCracken, 1989). (1)SOURCE CREDIBILITY MODEL The source credibility model is the first of the celebrity endorsement strategy models. The model affirms that the effectiveness of the endorser’s message depends on his perceived level of expertise and trustworthiness (Hovland, Irving, Kelley, & Harold, 1953). Trustworthiness and expertise start a process called internalization in which the promotional message has influence on the consumers’ beliefs, opinions, attitudes, and behavior since information comes from a credible source (celebrity) (Erdogan, Baker, & Tagg, 2001). As a consequence, a celebrity endorser who possesses high level of trustworthiness and expertise will be more likely to change the consumer’s attitude 5 The Classical Conditioning Paradigm in Marketing Communications Context claims that consumers do associations between an unconditional stimulus (endorser) and a conditional stimulus (product) through repeated exposure (Erdogan, 1999). 26
  • 27. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 (Ohanian, 1990). Hence, the more credible a source is, the more it will be persuasive. Even though source credibility is an essential factor in defining a celebrity endorser because of its direct effect on consumers’ behavior, it is not the only factor to consider while choosing a celebrity endorser. It seems that a source’s credibility cannot be measured because of its subjectivity, but there is a high degree of agreement among individuals called “truth-of-consensus method”. This method is used to measure and assess a source’s credibility and attractiveness. The method is based on Gestalt principles which state that individual’s judgments of credibility and attractiveness come from person perception instead of single characteristics (Erdogan B. Z., 1999). For the source credibility measurement, Ohanian (1990) created a Source Credibility Scale (Exhibit 6) after doing extensive research and statistical tests. He bounded many characteristics to the credibility attribute, but McCraken (1989) argued that to measure celebrity endorsement effectiveness many other attributes should be taken into account because attractiveness and expertise were not enough. Exhibit 6 Source Credibility Scale ATTRACTIVENESS TRUSTWORTHINESS EXPERTISE Attractive- Trustworthy- Expert-Not Expert Unattractive Untrustworthy Classy-Not Classy Dependable- Knowledgeable- Undependable Unknowledgeable Elegant-Plain Reliable-Unreliable Qualified- Unqualified Sexy-Not sexy Sincere-Insincere Skilled-Unskilled Beautiful-Ugly Honest-Dishonest Experienced- Inexperienced (Ohanian, 1990) (2)SOURCE ATTRACTIVENESS MODEL The model affirms that the effectiveness of the endorser’s message depends on his/her similarity, familiarity, and liking (McGuire, 1968). Therefore, this means that 27
  • 28. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 the endorser should have a resemblance with the receiver of the message (similarity), as well as physical appearance and behavior that affect the receiver (likeability). Moreover, the endorser should be well-known by the receiver through different exposure (familiarity). The attractiveness of the endorser is usually determined by the process called identification. This process works in the application to advertising because consumers accept information given by an attractive endorser and as a result they want to emulate him/her by having in this case a purchase intention (Kelman, 1961). Indeed, attractiveness can be observed in most advertisements which expose attractive people. People are used to these kinds of attractive people that are being stereotyped. Usually, the source attractiveness model works better when people have changing beliefs (Baker & Churchill, 1977). Confusion can be done when talking about attractiveness, since many times it means only physical attractiveness in the advertisements. However, attractiveness signifies either other characteristics that the receiver might perceive in a celebrity endorser, such as intellectual skills, personality, etc. Many studies have shown that there are no doubts that celebrities’ attractiveness boosts attitudes towards advertising and brands. Nonetheless, some studies show that there are no purchase intentions with this kind of strategy, while other studies show exactly the opposite. There is ambiguity about the results and the fact that celebrities’ attractiveness alone can initiate behavioral intent (Erdogan, 1999). Indeed, Baker and Churchill’ studies (1977) showed in an experiment for a coffee campaign that an unattractive model leaded to behavioral intent of purchasing, while an attractive model did not create such intentions towards male subjects. Patzer (1985) claimed that “physical attractiveness is an informational cue; involves effects that are subtle, pervasive, and inescapable: produces a definite pattern of verifiable differences; and transcends culture in its effects.” (3)THE PRODUCT MATCH-UP HYPOTHESIS The product match-up hypothesis sustains that harmony of the match between the celebrity endorser and the product being endorsed is a key determinant for the effectiveness of the strategy (Amos, Holmes, & Strutton, 2008). Forkan (1980) and Kamins (1990) state that the messages sent by the source (endorser) and the message 28
  • 29. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 of the product should be congruent to reach an effective advertising. Advertising with high congruity between the celebrity image and the product message has more credibility than advertising with low congruence. Indeed, the advertising effectiveness will be measured by the degree perceived of the fit between brand and celebrity image. Friedman and Friedman also confirmed the hypothesis that the celebrity and product fit lead to a higher effectiveness of the strategy. In reality, consumers are also expected to find a certain level of congruence between the endorser’s image and the product he/she endorses. So, from both sides, practitioners, and consumers, there is a high expectation in the match between celebrities and brands. From the consumer point of view, if match is missing, the consumer will only think that the celebrity has been bought to endorse the product and that he/she does not believe in what he/she is saying. From the practitioners’ point of view, if the product does not match the celebrity’s image, then the “vampire effect” might occur. It means that consumers remember the celebrity, but not the product (Evans, 1988). According to Evans (1988), “celebrities suck the life-blood of the product dry” when there is no existence of a product/celebrity fit. Kamins (1990) also suggested a specificity of the match-up hypothesis about attractiveness. In fact, he proposed that celebrity endorsement strategy is more effective when attractive celebrities endorse products that enhance one’s attractiveness. This is the reason why many personal care products are endorsed by attractive celebrities. However, according to Till and Busler (2000), the effectiveness can be measured in terms of brand attitude, but not in terms of purchase intention. The match-up hypothesis has some limitations because of the inability of identifying and measuring which dimensions are applicable for a particular product. The match-up hypothesis has to be extended to the match of the entire image of the celebrity with the entire image of the brand and target audience (Erdogan B. Z., 1999). [It’s got to be a good match. You can’t just pull a celebrity out of the air. The most important thing is matching the celebrity’s image and the way the public relates to them. You have to tap into that to be effective]. Noreen S. Jenney, President of Celebrity Endorsement Network, (Levine, 2003) 29
  • 30. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 (4)THE MEANING TRANSFER MODEL McCraken (1989) stated that the effectiveness of celebrity endorsement strategy relies on the meaning that the celebrity conveys through the endorsement process. Celebrities can transfer different meanings to the products and there are undeniably a huge number of meanings contained in a celebrity, such as status, gender, age, lifestyle, and personality (Erdogan B. Z., 1999). Therefore, it represents for marketers a large choice at their disposal for their strategies. This model gives a “conventional path for the movement of cultural meaning in consumer societies” (Erdogan, Baker, & Tagg, 2001). The process (Exhibit 7) constitutes three stages: the formation of celebrity image, the transfer of meaning from celebrity to product, the transfer of meaning from product to consumers (McCraken, 1989). In the first stage, McCraken (1989) contended that meanings come from a culturally constituted world, a physical and social world composed by many categories and principles of the current culture. In this process, there are many actors that play an important role. Advertising is a way of joining together consumer needs and the representation of the culturally constituted world. As a result, the role of advertising is to communicate the culturally constructed meaning of products to consumers. The second stage is the movement from celebrity to product. It is the moment where the product gains a personality during the transfer of celebrity’s meanings. This work is done by advertising agencies which choose the proper celebrity to represent the product with the proper meanings. After the meanings are transferred to the product, they should also be transferred to consumers (stage 3). According to McCraken, this last transfer is to be done by the effort of the consumers who are willing to take possession of the meanings. This movement will be achieved through cultural rituals. 30
  • 31. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 Exhibit 7 Meaning Movement and the Endorsement Process (McCraken, 1989) Finally, this model suggests that companies should investigate the real meanings of celebrities that are desirable for their product or brand. In fact, the effectiveness of the endorser will depend in part on the different meanings he/she conveys through the endorsement process. In his findings, Cotting (2002) had improved McCraken’s model by integrating during the stage 2 a new element. He claimed that the product has also an influence on the celebrity’s image. Therefore, he added at stage two a two-way arrow between celebrity and product. 2.5 CELEBRITY SELECTION This section includes models and theories which use success attributes for the celebrity selection. COMMON CELEBRITIES’ ATTRIBUTES A celebrity endorser strategy is not without a certain level of risk. That is, selecting an inappropriate endorser can reduce sales revenues and tarnish a brand’s. Because of the importance of selecting an effective celebrity endorser, the marketing literature is replete with articles that evaluate which celebrity attributes correlate the highest with a successful endorsement (Amos, Holmes, & Strutton, 2008). 31
  • 32. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 Trustworthiness Most of the literature sustains that trustworthiness is one of the essential attributes for a celebrity to be credible. The credibility of the message is one of the most important criteria when choosing a celebrity endorser (Knott & James, 2003). Indeed, the credibility of the source plays a considerable role in celebrity endorsement since it influences beliefs, opinions, attitudes, and behavior through the internalization process. That explains why trustworthiness appears to have a significant impact on the effectiveness of the celebrity endorsement (Chao, Whurer, & Werani, 2005). Trustworthiness represents honesty, integrity, and believability that an endorser communicates with a target audience (Erdogan, Baker, & Tagg, 2001). Therefore, trustworthiness is the degree of confidence that a communicator transmits to his audience (Amos, Holmes, & Strutton, 2008). If the degree of confidence is high, then the audience attitude changes effectively. Moreover, a degree of confidence is even more important if the audience has a negative position toward the offering. In summary, an effective celebrity endorsement strategy requires a high level of trustworthiness so that the transmitted message is credible. Expertise Expertise is another factor that lends credibility to the endorser source. Erdogan (1999:298) defines celebrity endorser expertise as “the extent to which the communicator is perceived to be a source of valid assertions.” Thus, the expertise of an endorser stems from people’s perception of the knowledge, experience, or skills s/he possesses. Perceptions of this knowledge, experience, or skills influence how the audience judges the offering’s quality. Therefore, individual perceptions of an endorser’s expertise are positively correlated with their purchase intentions and a communicator perceived to be a source of valid statements can positively impact attitude change (Ohanian, 1990:42). Celebrity Power Power is a relevant dimension in the process of persuasion. Power gives an endorser the ability to bring another person to “respond to the request or position the source is 32
  • 33. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 advocating” (Byrne, Whitehead, & Breen, 2003). Hence, the endorser should have relevant power to administer rewards or punishments. This means that persuasion occurs when the consumer comes to accept the endorser’s position in order to receive rewards or avoid punishments (Kelman, 1961). As a result, it signifies that the receiver perceives the endorser is a source of power. It is prudent to note that superficiality is one disadvantage of persuasion through the process of compliance. In fact, persuasion lasts only as long as the receiver believes that the endorser retains the power of dispensing rewards or punishments (Junokaite, Alijosiene, & Gudonaviciene, 2007). The principal persuasive power of a celebrity comes from their being popular, famous, recognizable, admired, trendy and fashionable. These attributes are prime reasons why a person achieves celebrity status, and why s/he has the power to influence others. Celebrity power can be so strong that in some cases the selection of an endorser is made almost solely upon the individual’s level of popularity. Match of Image and Values The harmony of the match of the product/service offering and the celebrity endorser is explained by the “match-up hypothesis” (Till & Busler, 2000). This hypothesis posits that the message of the celebrity endorser image and the offering message must be congruent in order to be effective (Kamins M. A., 1990). A match exists when the “degree of perceived fit between brand (brand name, attributes) and celebrity image” is high (Erdogan B. Z., 1999). Interestingly, the perceived match between the celebrity’s image and values and those of the advertised brand bolsters perceptions of the celebrity’s credibility (Friedman & Friedman, 1979). This means that advertisers must evaluate the characteristics of the target market, the celebrity’s personality characteristics, and the characteristics of the product in order to attain the highest perceived degree of match. This congruence is essential to ensure that the consumer remembers the product instead of only the celebrity. In fact, research confirms that if there is no relationship between the celebrity and the product, consumers will remember celebrities rather 33
  • 34. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 than products. This effect is called the “vampire effect” because “the celebrity has sucked the life-blood of the product dry” (Evans, 1988). Physical Attractiveness A body of research spanning three decades provides strong support for the contention that an individual’s assessment of someone else is highly influenced by their physical attractiveness (Solomon, 1998). Canary and Cody (1994, pp. 72) state that: “we like attractive people, we attribute positive qualities to them and find it rewarding when they appear to like us.” Moreover, they explain that: “we are more likely to comply with requests from likable, good-looking people than from people who are unlikable and unattractive” (pp. 301). It is for these reasons that previous celebrity endorser studies report that an endorser’s physical attractiveness is a significant catalyst of endorser effectiveness (Chao et al., 2005, DeSarbo and Harshman 1985, Ohanian 1990). A meta-analysis performed by Amos et al. (2008) also echoed this same sentiment. Genuine Support Genuine support is a relevant criterion of endorser effectiveness because it increases the audience’s credibility perceptions (Magnini, Honeycutt, & Cross, 2007), who perceive authenticity in the celebrity endorser. This authenticity is related to the support of the celebrity for the product s/he endorses. Not only is this support important in front of the camera, but also in his/her lifestyle (Magnini, Honeycutt, & Cross, 2007). A way to increase genuine support is to involve the celebrity in the creation of the product’s design and features (Boone & Kurtz, 2005). Such celebrity involvement will motivate him/her to become a frequent user of the product, which increases the perceived authenticity of the endorser. Exclusivity The exclusivity of a celebrity endorser is a criterion that enhances overall believability (Schiffman & Kanuk, 2004). When a celebrity endorses multiple products, the effectiveness of their endorsements is diluted (Marconi, 1996). In other words, the 34
  • 35. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 exposure of a celebrity endorsing different products or brands makes an advertisement less credible. Moreover, people can become overexposed to a celebrity’s image, and for that reason will pay less attention. Exclusivity can also serve to protect a sponsoring company. That is, if a celebrity makes an unsuccessful brand endorsement, that failure can be transmitted to other brands that the celebrity is endorsing. Asking exclusivity to the celebrity in the contract, therefore, can serve as insurance against negative associations. Reference Groups Reference group appeals have been used for decades by marketers to persuade consumers to purchase goods (Peter & Olson, 2002). By definition, reference groups are persons, groups or institutions that a person uses as a point of reference. In this case, the reference point is a celebrity with values, behaviors, and lifestyles (Holbrook & al., 2008). These values are a guide to help consumers choose their own values and behaviors. The celebrity, with his/her values and behaviors, can guide the consumer to purchase a product. In terms of celebrity endorsement strategy, the influence of reference groups can be divided into two categories: relate and emulate. Reference group: relate This reference group is usually referred to as membership reference group, which means that people turn into formal members, with a clearly specified structure of a membership reference group. Membership reference group is a utilitarian reference group that influences consumers with rewards and punishments. People are expected to behave in a certain way and are rewarded for, or are punished when they do not behave the way they are expected (Peter & Olson, 2002). The use of a celebrity can be a strategy with the creation of a reference group influence by showing how a celebrity is close to the consumer. The reference groups are usually social archetype groups, which are groups of people that share a similar lifestyle. Consumers want to emulate the celebrity’s consumption choice in order to assume part of the group’s identity. Most of the time consumers outside the group are fascinated by celebrities (Holbrook & al., 2008). 35
  • 36. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 Reference group: emulate This reference group is usually termed aspirational, which means that people aspire to emulate the reference group. An aspirational reference group is value-expressive in the sense that it has an effect on people’s self-concepts (Peter & Olson, 2002). Aspirational reference groups usually include cultural heroes, such as sports celebrities, and film and music stars that consumers are willing to emulate. Children can be particularly impressionable by celebrities they wish to emulate (Holbrook & al., 2008). THE FRED PRINCIPLE The FRED principle (Exhibit 8) is an acronym which stands for Familiarity, Relevance, Esteem, and Differentiation. This model is the result of a vast study based on 30’000 interviews around the world to understand why advertising efforts succeed and fail. This model was developed by Amy Dyson and Douglas Turco (Illinois State University). Exhibit 8 The FRED Principle Amy Dyson & Douglas Turco As already introduced in the source attractiveness model, Familiarity is an important attribute for a celebrity since it means that the celebrity is well-known and perceived by the consumer as a person who is friendly, likeable and trustworthy. This is about the celebrity’s recognition. Marketers must choose a celebrity who is recognized by the target audience. The second component of the FRED principle is the Relevance, 36
  • 37. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 which is by the meaning a synonym of the match of image and values. Indeed, relevance is the connection between the celebrity, the product and the audience. The third component is Esteem, esteem from the consumer to the celebrity. Consumers must have respect and believe the celebrity to be influenced by him/her in order to purchase the endorsed product. Finally, Differentiation is a key component to reach competitive advantage. It is the ability of sending the right message in outstanding way. If there is no differentiation with the competitors, then the strategy is not worthwhile. These four components are the success factors of the FRED principle. These guidelines are a good way of beginning to select one celebrity. However, there is no guarantee of success because each company’s objectives are different and individual evaluation should be done. 4F’s Hamish Pringle suggests another model (Exhibit 9) for selecting the best famous people to do a brand promotion. He presents guiding principles that should be maximized and optimized in order to do the right selection. These principles are the four F’s: Fit, Fame, Facets, and Finance. Exhibit 9 Four Fs in using a celebrity (Pringle, 2004) Hamish Pringle recommends marketers to ask themselves the following questions (Pringle, 2004): “How well does this particular celebrity Fit in with the brand?” “How Famous is the star?” 37
  • 38. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 “Which Facets of this high-profile person can best work for the brand profile?” “How much of this can the brand Finance?” The relationship between the star and the brand should be the more intimate so that the campaign is the more effective possible in the marketplace. SOURCE ATTRIBUTES AND RECEIVER PROCESSING MODES Another approach on how the celebrity selection is done has been developed by Belch & Belch (2001) with the “Source Attributes and Receiver Processing Modes” (Exhibit 10). This approach corresponds to the identification of the influence on consumers’ attitude on behavior through different processes. Exhibit 10 Source Attributes and Receiver Processing Modes (Belch & Belch, 2001) Belch & Belch (2001) contend that for the success of the brand-celebrity collaboration, credibility is an essential element. Credibility is defined as the consumers’ perceived expertise and trustworthiness. Credibility has therefore a great influence on the consumers’ acceptance. As already mentioned, internalization process is the process through which a promotional message has influence on the consumers’ beliefs, opinions, attitudes, and behavior since information comes from a credible source (celebrity) (Erdogan, Baker, & Tagg, 2001). When consumers internalize an attitude 38
  • 39. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 or opinion, it will be integrated in his/her belief system (Kelman, 1961). The credibility attribute is crucial when consumers have a negative position toward the endorsed product. The target audience has to believe in the celebrity who is endorsing a product. The authors state that celebrity attractiveness has a positive impact on consumers. Attractiveness is considered in this case as physical appearance, intellectual capabilities, athletic competence and lifestyle. It includes in the definition: similarity and likeability (McGuire, 1968). Consumers will more easily remember the brand if it is endorsed by an attractive celebrity. Persuasion is done through a process of identification. The result of this process is the consumers’ acceptance of information from attractive endorsers because of consumers’ need of identification with such endorsers (Kelman, 1961). The third process through which persuasion occurs is called compliance. When celebrity has power (Kelman, 1961), he/she is able to administer rewards and punishments to consumers. Therefore, when a consumer accepts his/her influence he will hope to obtain a favorable reaction or avoid punishment. However, in the case of advertising, Belch & Belch (2001) claim that an endorser cannot apply any kind of sanctions. The power in advertising can be used with an authoritative personality as endorser. But, generally speaking, power is more effective as an attribute for a face-to- face communication. Q-RATINGS Q-rating is an approach that considers essentially familiarity and likeability of the celebrity (Knott & James, 2003). The aim of this approach is to help establishing the value of celebrities. It has been created in USA for over 40 years by a research company in New York called Marketing Evaluations, Inc. The results of the data collected establish the consumers’ perceptions and feelings into a “likeability” measurement (Pringle, 2004). The Q-rating is defined as “the percentage of those familiar with a personality who rate that personality as “one of my favorites” (on the questionnaire)” (Knott & James, 2003). This survey is done twice a year so that the rating is updated as much as possible. The survey is compiled by 1800 participants from all ages. The data then can be sold to many entities such as television, public 39
  • 40. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 relations professionals, advertisers, and agents. The criticism of this approach is the fact that it is based on a simple ratio of likeability and familiarity. Indeed, it can bring to misunderstanding and wrong interpretation (Knott & James, 2003). There are also other lists that try to set the monetary value of the celebrities (movies stars). There is even the “Celebdaq”6 with an online index where people can buy and sell shares in stars like in a real stock exchange (Pringle, 2004) (Exhibit 11). The Forbes Magazine makes either celebrities’ rankings but in terms of their earnings over the past twelve months7. Exhibit 11 Pop Shares http://www.bbc.co.uk/celebdaq/lists/POPprofile.shtml All these rankings are snapshots that can change very quickly. Therefore, it is risky to choose your celebrity endorser only relying on these rankings because it might be only a flavor of the month. It would not be a wise decision. That is the reason why many practitioners use their personal judgment most of the time when they choose celebrities for advertising campaigns (Miciak & Shanklin, 1994). According to Agraval & Kamakura (1995), who evaluated the economical impact of C.E. contracts, they observed through 110 C.E. contracts that the investment in a personality has value in the eyes of the analysts. Consequently, the value of the stocks rises the day of the C.E. contract announcement. This explains why the right selection of a celebrity as a spokesperson is crucial. The literature review is replete of different 6 http://www.bbc.co.uk/celebdaq 7 http://www.forbes.com/2009/06/03/forbes-100-celebrity-09-jolie-oprah-madonna_land.html 40
  • 41. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 strategies for the selection. Firstly, companies should investigate the real meaning they want to convey before selecting a celebrity. Depending on their strategies, companies will then choose the right celebrity selection’s model. SPORTS INDUSTRY Yesterday Michael Jordan, today Roger Federer, who is going to be tomorrow’s sports icon in the celebrity endorsement? The essence of endorsement in sports industry lies on timing. Indeed, timing is crucial because companies have to exploit the occasion when an athlete makes the right performance. Companies also know that public opinion can fade quickly, therefore timing is the key. The characteristics of sports’ celebrities’ selection rely on other factors as well. In sports industry, endorsements are the result of three simultaneous elements: (1) Athletic accomplishment; (2) Public recognition of the spectacle; (3) Opportunistic marketing on behalf of a company (Schaaf, 1995). Marketers usually look for the best athletes to promote their products. They look for different characteristics, such as the success of the athlete, his/her visibility, and his/her work ethic. These characteristics are definitely crucial in the athlete’s selection. The right selection implies different images in the celebrity endorsement process (Pemberton, Sports Marketing: the Money Side of Sports, 1997). First, the company’s image is involved by being endorsed by a celebrity. Then the image of the athlete is either involved in the sense that it will be associated with a certain type of product. Finally, the overall image to be promoted has to be well decided and well designed, so that consumers get to the right point. For the company’s point of view, getting the right athletes implies doing a background investigation, interviewing the athlete about the product, choosing an athlete willing to give 100% and able to honor the request. From the athlete’s point of view, it is important to understand well the terms of the contract and to test the product to endorse. Indeed, the product might not be functional and the athlete might loose credibility. The athlete should give his/her full collaboration so that both parties can benefit from the association (Pemberton, 1997). 41
  • 42. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 This relationship between an athlete and the company reinforces the association between three different key groups: (1) Fans; (2) Athletes; (3) The sport itself (Schaaf, 1995). The driver of the whole relationship is money. Companies’ concept is always the same. They associate their product’s image by integrating a personality to build a competitive advantage over the competition. Three basic characteristics of the endorsement business climate should be taken into consideration and not forgotten (Schaaf, 1995): Athletes are expensive, and risky. They are overpaid for doing promotional services and demand anything from the company. There are few athletes who get the deals, only the famous ones. There is a restricted selection. Celebrity endorsement enhances the high visibility sports. The fans want to identify with their favorite athlete, and this is one stage of the celebrity endorsement strategy – identification. Afterwards, companies wait for the right timing to exploit the performance of one athlete for their promotional needs. A successful example of celebrity endorsement strategy done in 2007 was the launch of the “New Gillette® Champions Program” campaign8. The launch was done with three new ambassadors by Procter&Gamble and it was a great challenge (Appendix 4). Undeniably, they choose the three best-known and most successful athletes at that moment: Tiger Woods, Roger Federer, and Thierry Henry. [The Gillette name is synonymous with being the best. These three athletes have proven they have what it takes to be a champion on the course, the court or the pitch. They were chosen not only for their outstanding sporting performances, but also for their performance off the field, in their charitable actions, support of social causes or their reputations as icons of true sporting values. ] Chip Bergh, President of Global Grooming at Gillette. This was a huge investment but they won their bet. The campaign was a success. It was designed for more than 150 markets in the first year of the launch. The three ambassadors were consistently chosen for their sporting performance as well as for their behavior away from the game. 8 http://www.ch.pg.com/presse/0701_gillette_champs/index_fr.shtml 42
  • 43. UNIVERSITY OF LUGANO BEYOND THE EFFECTIVENESS OF CELEBRITY ENDORSEMENT 2009 2.6 Overview of models and theories The review of the existing theories and models about celebrity endorsement showed a real focus on celebrities’ attributes. The attributes of the celebrity are in fact a crucial step during the selection phase. Three attributes are particularly present in literature review: credibility, familiarity, and attractiveness. These attributes appear to be the most relevant while choosing a celebrity. Most of the models/theories claim that the attributes are related to specific processes. Indeed, celebrities’ attributes impact on consumers can be explained through these processes, such as internalization, identification, and compliance. It is very important for companies to understand these processes before choosing the right celebrity. Different attributes lead definitely to different processes. This is the reason why companies need to be clear on what kind of strategy there are ready for. Some models focus only on few attributes which is not a realistic way of building a celebrity endorsement strategy. This is the case of the “Source Credibility model” which measures only the expertise and trustworthiness. Then, the “Source Attractiveness model” demonstrates a very powerful attribute but still is not enough to measure the celebrity endorsement effectiveness and moreover it might not lead every time to a purchase intent. “The Product Match-up hypothesis” follows the same problematic of considering only few attributes. Finally, the “Q-ratings” approach is based only on two attributes, which is not enough for companies to trust it at 100%. The FRED principle and the 4F’s are two models that give a quick overview of what celebrity endorsement should be constituted of, but it is a very light overview with few attributes and few dimensions of the strategy. The 4F’s, in any case, includes also the financial dimension. A more complete approach is the “Source Attributes and Receivers Processing Modes” which goes from the attributes to the processes, but focusing too much on consumers’ attitudes. 43