January certainly delivered its share of celebrity endorsement brouhaha. From Lance’s somewhat anticlimactic, though no less headline grabbing, Oprah confession to the painstaking pre-analysis of Beyonce at the Super Bowl, much has been discussed regarding the good and the bad of celebrity sponsorships.
As last month demonstrated, even if we’re debating whether Nike will work with Lance again or lamenting the discrepancies between a pop star promoting the First Lady’s “Let’s Move!” campaign and signing a $50 million Pepsi deal, these sponsors are getting play. And in the good times, when the partnerships are formed and the celebrity’s image is aligned with the brand’s attributes, the visibility and exposure of the brand rises. Not to mention, in the case of athlete-endorsed products, most companies see a sales increase of around 4%. (The Economic Value of Celebrity Endorsements, Elberse and Verleum, 2011.)
But does the health of a brand suffer if a celebrity endorser makes a misstep or falls from grace? The reality is most sponsors can walk away unscathed if they react appropriately. Severing a contract, distancing themselves from the error…the definition of “appropriate” varies by celebrity and offense.
In the days following the Lance confession, no one asked how Nike, Trek or Anheuser-Busch would fare. Having already separated themselves from the scandal, the brands simply enjoyed mentions in the press as former sponsors, while the question everyone really wanted to know was, “Is Lance still marketable?”
Likewise, the greatest post-holiday gift Beyonce could have given Pepsi was a lip-synced National Anthem. “She’s been preparing for the Pepsi Super Bowl halftime show” and “We’ll see how she does at the Super Bowl…” have been the sound bites, and quite frankly, free Pepsi buzz that resulted from her prerecorded performance.
For many companies, a celebrity affiliation is in stark contrast to the essence of their organization and would alienate current and future customers. But, for the Nikes and Pepsis of the world, who have determined that a celebrity’s power to influence consumers and elevate their message makes sense for their brand, the reward often outweighs the risk.