I think celebrity endorsements are a waste of money

A new study just published by a market research company called the NPD Group analyzed the Penning effectiveness of 86 celebrity endorsements featured in ads last year. Ty Pennington, a home improvement guru, finished at the top of the list and Anna Nicole Smith, brought up the rear.

To me, this is a big ho hum. Who cares if Tiger Woods, James Earl Jones or Donald Trump are endorsing a watch, cell phone or credit card? The vast majority of research shows that celebrity endorsements rarely break through, nor do they influence a buying decision. Most critically, though, few consumers are able to make the connection between the endorser and the product he or she is shilling for. Case in point: the NPD study showed that only 17 percent of respondents correctly linked Trump with a Visa commercial he appeared in. Fourteen percent thought he was pushing American Express instead. Talk about pouring money down the drain.

In these days of information overload, scandals in every sector of society and a near total lack of role models, it’s no surprise that celebrity endorsers aren’t what they used to be. As consumer opinion gains increasing influence in the buying decision, he or she depends less and less on "star" power" to influence a decision. Today, it’s all about word-of-mouth and credible third-party sources of information, the kind generated through public relations.

While I know some PR campaigns still depend on celebrities to create buzz, here’s hoping digital technologies and the citizen blogger will continue to erode the once important spokesperson roles played by the Hollywood set.

15 thoughts on “I think celebrity endorsements are a waste of money

  1. Again, what I’m saying is that new, digital efforts and word-of-mouth marketing initiatives are proving much more effective than the old Super Bowl 30-second commercial or the Hollywood celebrity approach. Some marketers will continue to use the latter. But, the real trend is in the former. The other risk with celebrities is the “baggage” they bring with them and the very real possibility that they can embarass the brand. I can think of any number of examples of that……

  2. Maybe I’m missing the point, Repman. I’m not suggesting the mass market approach.
    Perhaps a company can leverage a celebrity endorsement while still reaching consumers in a one-to-one, manner, as appropriate, no?
    One-to-one marketing is simply a channel or vehicle for how to reach consumers whereas celebrity endorsements are one of many ways to pique consumer interest in a product or service. Am I wrong?

  3. Maybe there were some great celebrity endorsements. But, if memory serves me right, the company that made the George Foreman grill went into Chapter 11 some time ago. You continue to miss the point, though. Celebrity endorsements aren’t smart for most companies. There are much better, more cost effective ways to reach technology-enabled consumers in a one-to-one manner. Mass marketing is yesterday’s news. Kinda like the George Foreman grills.

  4. How about one of the biggest endorsement deals of all-time – the George Foreman grill?
    I don’t think we’re focusing on the medium (Internet, TV, etc) and how a company/brand communicates or delivers its messages. Rather, we’re commenting on the effectiveness of celebrity endorsements.
    Fact is we live in a celebrity crazed society right now. And, I think for what it’s worth, aligning a product with the right celebrity can do wonders for a brand.
    If you’re a manufacturer of women designer jeans, don’t you think getting Jessica Simpson to endorse your product would be a good thing? Obviously, you’ll need to weigh the cost of such an endeavor. But whether it’s Jessica Simpson or not, I would think you could find a cost-effective approach to having the ‘right’ celebrity push your product.
    Note it doesn’t have to be a blatant endorsement. From a PR perspective, I think a more subtle approach perhaps using not so obvious product placements at the grassroots level might be in a company’s best interest, so it doesn’t appear as though it’s a paid situation.

  5. rep-
    by the way, forget jordan and nike, how about george forman and the grill. would you call that endorsement a waste? to make a general statement like that is wrong in my opinion as you clearly miss some amazingly successful endoresements that paid off more than anyone can imagine.

  6. Repman – Very enjoyable reading regarding celebrity endorsers. I think you’re right – a big part of the “celebrity endorser” downfall has been the very downfall of celebrities. In this world of reality television, celebrities are made overnight and they do not have the character they used to have which made us all aspire to be like them. Probably the last pitchman to trust was Joe DiMaggio talking about Mr. Coffee!

  7. rep, you might be correct, but i have to disagree. i am good friends with an ad guy that owns an agency and is widely considered by his competitors, trade rags, major media (recent NY Times feature) and marketing pros as one of the best creative and ad talents in the game today. just a few weeks ago he told me that he gets RFP’s every day from brands you use every day. a majority of his work is still the 30 second spot and traditional items such as bill boards and the like. sure, he plays the new media game, but traditional marketing is alive and well at his shop.
    that said, you are correct that i am out of the marketing arena so I certainly hear your comments and think they are interesting. but remember the old adage: the more things change, the more they stay the same. in this case, if the “unbundling” is the trend since 1999, then why are companies still spending millions on the 30 second spot? 7 years is a long time to be throwing out money on last century’s trends…

  8. Ah, but that’s where you’re wrong, I-man. Your absence from the marketing arena for the past few years is showing big time. The biggest trend in advertising/marketing right now is the “unbundling” of the old, traditional multimillion dollar campaigns that depended heavily on Super Bowl commercials, hiring big name talent, etc. Today, it’s all about reaching the consumer in a one-to-one manner (i.e. blogs, podcasts, word-of-mouth, mobile messaging, etc. That said, your comments are dead on (for 1999).

  9. i didn’t say i was so high on celeb endorsments…quite the contrary, i said “Rep- I agree that in various cases celebs just aren’t worth the money they are paid.” my point was that while you chose to “prove” the reasoning behind your opinion and then made a generalization, you also ignored the extreme opposite cases where celeb endorsments paid off huge ROI for companies.
    here’s a question that i would like to see a response on- if celeb endorsements are a waste, and super bowl commercials and advertising in general are such a waste, why do you think that almost of the biggest and most profitable companies in the world spend so much time and money on it. wouldn’t you think that somewhere, some CMO would have a eureka moment and say “i am gonna save this company 100 million dollars this year but cutting these “wasted” expenditures. the fact that it hasn’t happened in large scale tells me that the brighest and best marketing minds wouldn’t see eye-to-eye with you on this one.

  10. rep,
    gauze boy should hire pete doherty, kate’s on again-off again beau. he would be a great spokesman for syringes, being that he is an avid heroin abuser.

  11. Hey I-man: If you’re so pro-celebrity endorsement, why not hire Kate Moss to promote your Fairway Medical Supplies syringes? I think it’s time for you to put your money where your (virtual) mouth is.

  12. Briza, sorry no time today to do the research between golf, lunch and car shopping. 🙂
    Rep- I agree that in various cases celebs just aren’t worth the money they are paid. However, wouldn’t you have to agree that many of the dollars poured into all areas of marketing are a big waste. As you have blogged before, super bowl commercials are a huge waste if you look at the actual ROI, and your feeling is obvious on the endorsement side as well.
    That said, Briza makes a great point. As I’m sure you well know, any study can come out and find any result you want if you really try. I believe that a study could be done tomorrow and find that the “wasted money theory” can be applied to promotions, product placements, sponsorships and PR. To say that celeb endoresements as a whole are a waste of money is a strong and general statement. Rather, as the survey released shows, and is usually the case in life, some things produce better ROI than others. For every Kate Moss-Nikon marriage, there is a Michael Jordan-Nike and a Tiger Woods-Tag Hauer. I think in this case, you are choosing to only look on one side of the fence.

  13. I guess there are a few exceptions, but I wonder what the ROI’s were for the mega celebs you mention? I guarantee Michael Jordan cost millions. And, I’m sure P.Diddy cost a Benjamin or two. My bottom-line feelings about celebrity spokespeople remain the same: The bottom-line doesn’t justify hiring celebrity shills.

  14. Repman, I don’t think this survey carries much weight. Who’s the NPD group? And, who did they poll?
    What about Michael Jordan and Nike? I bet if we did some research, we can find some very successful campaigns that were endorsed by celebrities. I just don’t have the time to do it. I-man, I’m sure you have a minute to spare…

  15. Although I agree that most celebrity endorsements don’t carry a lot of weight, there are a few that are obviously working. Take ProActiv for example. Having P Diddy and Jessica Simpson shill for them has obviously paid off. Why else would P Diddy stoop to the level of doing acne infommercials unless the stuff actual works, right? I’m not necessarily buying into it, but a lot of people are.