Celebrity Advertising

A couple of months ago a girlfriend and I went to see The Dancer, an exhibit featuring Degas, Forain, and Toulouse-Lautrec at the Portland Art Museum. I expected to see the study of form and movement; I did not expect to learn something about the history of the advertising industry.

Toulouse-Lautrec is credited with the first use of celebrity advertising in a poster he created for the Moulin Rouge. The poster features an image of a popular dancer, La Goulue, and says that she will be performing in concert at Moulin Rouge Wednesday and Saturday evenings. It caused a huge sensation at the time and spurred the popularity of both the dancer and the artist.

Today, celebrities are prevalent in the advertising of all kinds of products – medications, sports drinks, resorts, apparel, cars. Companies like Nike spend millions of dollars every year on celebrity advertising. I even recently saw a cartoon floating around the internet asking if member benefits at American Express would improve if the company didn’t spend so much paying multiple celebrities for endorsements. According to Millward Brown, a marketing research agency, stars appeared in nearly 14% of U.S. ads during 2007 (this number peaked in 2004 at 19%).

The question is: does celebrity advertising really work? Does hearing that your favorite basketball player or movie star drives a particular car really make you want to buy a car? The answer: it depends. A number of factors contribute to the success of celebrity advertising: product, celebrity, medium.

Supply and demand has always played a role in a product’s popularity and the likelihood that you’ll want one, and that’s not changing. Apple has used celebrities in their television campaign for the iPod, but they haven’t needed to do that with the iPhone. There are few competitors in the mobile technology space that have been able to keep up with the iPhone, and the limited supply and high price of the iPhone have put it in a class attractive to early adopters. People have stood in line to pay to be one of the first with this latest gadget – no celebrity required.

If a company does decide to use celebrity, how do they know which celebrities have the power to influence purchase? There’s something called the Davie Brown Index (DBI). The DBI takes consumer awareness and seven other factors into account to determine the marketing potential of celebrities. But not only do they have to be well-known and well-liked, celebrities have to be believable. If we believe that the celebrity really uses the product they’re shilling, we’re more likely to buy it in an attempt to gain access to a lifestyle better than ours. Kids didn’t want the latest Air Jordan basketball shoes to make a fashion statement; they wanted them to “Be Like Mike”… those shoes were a statement about physical talent and lifestyle.

The kind of endorsement we’re are looking for also depends on where we are in the purchase funnel and the advertising medium. If we’re passed the awareness stage and are ready to do some product research, user reviews from people just like us are what even experienced online shoppers are looking for. A recent report from eMarketer stated that 61% of survey respondents said they had checked for online reviews, blogs and customer feedback before buying a new product or survey. And 80% of those people said that the evaluations they found online influenced their purchase.

With all of these factors playing into purchase decisions it becomes apparent that sales and marketing are about more than just products. Whether a product speaks for itself, earned great reviews, or popular celebs are rocking it, advertisers need to be aware of their audience to choose the right kind of advertising that will resonate.