After reading Ryan Abushinov’s Blog about the effectiveness of celebrity endorsements, it reminds me some advantages of celebrity endorsements that can effectively help build brand image and increase sales.
It is estimated that companies in the US spent $800 million in 1998 to “acquire talent – entertainers, athletes and other high profile personalities – to spotlight in advertising, promotion and PR campaigns” (IEG Endorsement Insider). And, approximately 20% of all television commercials feature famous people. I think celebrity endorsements indeed do the trick in building brand image and increase sales, and we can find lots of examples in our daily life.
The celebrity endorsement can celebrity endorsement can instantly create brand awareness and recall. In China, this method is widely used by newly founded companies in clothing and fashion industry or cosmetic industry, and it always does the trick. Although some research states that sales will only increase by an average of 4%, it doesn’t mean the celebrity endorsements fail to attract customers. In my opinion, celebrity endorsement is most effective for newly founded companies for instantly increasing brand awareness, however, for those which are already well-known, the celebrity might not be the best choice for attracting customers
Also, celebrities have credibility on expertise that makes a product more desirable or enhances perceptions of quality. Consumers always believe in public figures, and they perceive a celebrity endorser as a guarantee of a product’s quality.
Last but not least, I think celebrity can help expand market segmentation. In other words, celebrities add new dimensions to the brand image. For example, if a company wants to create an environmental-friendly brand image, a well-known environmental activist might do the trick. Or, when a company starts to think about targeting on the LGBT market (as stated in the textbook, when gay marriage was pronounced legal in Canada, it created a new market segment), the company might think about inviting Lady Gaga (also popular as a gay rights advocator).
Although sometimes it seems that the effect of celebrity endorsement is not remarkable enough, and although the cost of celebrity endorsement is pretty high, as long as companies are smart enough to take advantage of it, it can effectively contribute to a companies’ success.