Celebrity Endorsement ROI
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What is celebrity endorsement in marketing and why it has evolved into multi-billion market.
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Celebrity Endorsement ROI
- 2. CONTENT • Introduction • Roles of Celebrities • REAL people Celebrities • Modelling • Pros and Cons • Trends
- 3. • Celebrities are people who enjoy public recognition by a large share of a certain group of people. • A person who has excelled in his/her field of action or activity • It may be in the field of social life, sports, cinema, theatre, politics and science anything but something with special results • Endorsement is a form of advertising that uses famous personalities who command a high degree of recognition, trust, respect or awareness amongst the people to promote a product or service.
- 4. CELEBRITY ENDORSEMENT Celebrity Endorsement is a form of promotion in which “any individual who enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing with it in an advertisement”
- 5. ROLES OF CELEBRITIES: A firm that decides to employ a celebrity to promote its products and services has a choice of using the celebrity as: Testimonial Example: Katrina Kaif endorses Lux Advocate Example: Saina Nehwal has been endorsing Fortune Oil Actor Example: Salman Khan as Dabanng in Suzuki Hayate Spokesperson Example: M. S. Dhoni for India Cements
- 6. REAL PEOPLE CELEBRITIES: • Brands are using real people and real customers in ads, with varying degree of success • Using real people also have few advantages for companies and one such is that they can develop these characters themselves and mould these characters to fit their brands and target audiences.
- 8. • Mr.Erdogan in his book ‘Journal of Marketing Management’ showed that endorsers created by a company were more effective in creating a link to the product than celebrity.
- 9. MODELLING
- 10. Psychology And The Source Credibility Of Communication (Hovland and Weiss, 1952; McCroskey and Young, 1981) Celebrity endorsement and its impact (Friedman, et aI., 1976; Kamen et aI., 1975) Source credibility of the celebrity, celebrity-brand congruence and meaning transfer model (McCracken, 1989) HISTORY OF THE RESEARCH
- 11. SOURCE CREDIBILITY • "attitude toward a source of communication held at a given time by a receiver" (McCroskey and Young 1981, 24) • " .... reliance upon the communication behaviour of another person in order to achieve a desired but uncertain objective in a risky situation." Giffin (1967) • "it would seem unobjectionable to hypothesize that the more the subject liked the source of a persuasive message, the more he would change his belief toward the position the source is advocating.“ McGuire (1969)
- 12. SOURCE CREDIBILITY *Atkin and Block 1983; Kamins 1989; McGinnis and Ward 1980 *Maddux and Rogers 1980; Ohanian 1991; Swartz 1984 *Baker and Churchill 1977; Caballero, Lumpkin, and Madden 1989; Kahle and Homer 1985; Silvera and Austnd 2004
- 13. TRADITIONAL EXPLANATIONS OF CELEBRITY ENDORSEMENT PERSUASION 1) Celebrity endorsement increases the attention paid to an ad (Buttle, Raymond, and Danziger 2000) 1) Celebrities are generally attractive, which helps persuasion when consumers are worried about social acceptance and others’ opinions (DeBono and Harnish 1988) or when the product is attractiveness-related (Kahle and Homer 1985, Kamins 1990) 2) Celebrities may be credible sources if they have expertise in a particular area, such as an athlete endorsing shoes (Ratneshwar and Chiaken 1991) or a beautiful model endorsing make-up (Baker and Churchill 1983) 3) celebrities are often well-liked, possibly leading to identification and consumer persuasion in an attempt to seek some type of relationship with the celebrity (Belch and Belch 2007)
- 14. THE CONGRUENCE STUDIES • Match-up Hypothesis • First studied by Friedman et al. (1976) and Friedman and Friedman (1979) • The congruence studies have delved into the similarities or correspondence between the product or brand and the celebrity and are popularly known as the "match-up" hypothesis.
- 15. SELECTING THE RIGHT CELEBRITY • A delicate process that involves thoroughly checking into that individual's personal activities and history, along with considering whether his reputation meshes with the brand's values. • The right celebrity endorsement creates brand awareness, positions or repositions the brand, and revives sales if they're flagging history, along with considering whether his reputation
- 17. METRICS TO DETERMINE ROI OF CELEBRITY ENDORSEMENTS • Once an organization has chosen the celebrity, the next challenge is to track the performance of the investment. • “In general, most companies expect that not everything in a celebrity-centric deal can be evaluated using traditional metrics.” – Evan Morgenstein, President & CEO, CelebExperts (September 2013) • The ROI of a celebrity endorsement can be measured through metrics such as brand awareness and recall, increase in sales, price premium that a brand can charge, and changes in stock price after a celebrity deal. There are a number of ways in which these metrics can be measured. • Anita Elberse from Harvard has developed an intervention model, using statistical techniques, to assess the impact of endorsement announcements and endorser’s impact on sales. However, it is not easy to quantify these metrics every time, as qualitative factors are also involved.
- 19. THE DAVIE-BROWN INDEX USES EIGHT CRITERIA IN ITS EVALUATION: 1. Appeal 2. Notice 3. Trend setting 4. Influence 5. Trust 6. Endorsement 7. Aspiration 8. Awareness
- 20. BRAND VALUE • Depends on Reputation & Credibility. • Changes with the performance of Celebrity in its area of core competence. •Shahrukh khan at the top of the list with valuation around $164.9 Mn. Source: AmericanAppraisal India
- 21. MORE THAN 75% SHARE ACCOUNTED BY BOLLYWOOD CELEBRITIES 42% 39% 16% 2%1% Celebrity Endorsement Bollywood Actress Bollywood Actor Sport Personality TV Actress TV Actor Source : AdEx India
- 22. MARKET SHARE OF DIFFERENT CELEBRITRIES Sr. No. CELEBRITY SHARE % 1 Deepika Padukone 5 2 Kareena Kapoor 5 3 Salman Khan 4 4 Virat Kohli 4 5 Ranbir Kapoor 4 6 Katrina Kaif 4 7 MS Dhoni 3 8 Abhishek Bachchan 3 9 Saif Ali Khan 3 10 Pulkit Samrat 3 Source: AdEx India
- 23. TOP 10 PRODUCT CATEGORIES USING CELEBRITY ENDORSEMENTSr.No. PRODUCT CATEGORY SHARE % 1 SHAMPOO 7 2 TOILET SOAPS 6 3 SOFT DRINKS AERATED 5 4 CELLULAR PHONE SERVICE 5 5 MILK BEVERAGES 3 6 PERFUME/DEODRANTS 3 7 FACE WASH 3 8 NAMKIN 2 9 CELLULAR PHONES (SMARTPHONES) 2 10 HAIR OIL 2 Source : AdEx India
- 24. ARE CELEBRITY ENDORSEMENTS EFFECTIVE US 79 % say no Germany 79 % say no French 71 % say no Japan 60 % say yes China 52 % say yes Source : GMI Poll Inc
- 25. 4% 8% 4% 20% 48% 16% Motivating factors that leads to purchase of products Discount and offers Price of the product Popular products Celebrity endorsing the product Quality of the product Value for money Source : IJBM
- 26. 12% 60% 28% Opinion whether the celebrities also use those products which they themselves endorse Yes No Not Sure
- 27. PROS • Increased Attention Popular celebrities have their own followers. • Image polishing Using a famous person for advertising a product or services a brand with a tarnished record has a chance to re-establish its status.
- 28. PROS • Brand introduction Celebrity helps in establishing new business. • Brand repositioning Celebrity endorsement helps in changing the brand status in comparison to the competing brand.
- 29. CONS • Overshadow the brand Brand is overshadowed due to the excessive popularity and publicity of celebrity • Public controversy Many companies have been badly affected by the negative publicity accruing from the celebrity’s misdeeds. One very prominent example is Pepsi which suffered with three tarnished celebrities - Mike Tyson, Madonna, and Michael Jackson.
- 30. CONS • Image change and overexposure Superstar Amitabh Bachchan endorses multiple brands like Pepsi, Mirinda, ICICI, BPL, Parker pens, Nerolac, Dabur, Reid & Taylor, Maruti Versa, Hajmola, Tide, Cadbury and a few social messages. It has worked in some cases, while in some cases it has not.
- 31. CONS • Loss of public recognition A general perception of consumers regarding overexposure is that they believe that celebrities use to endorse so many brands for money only • Expensive
- 32. THANK YOU
Editor's Notes
- Research in Brand Personality is relatively new. The works of Aaker and Fournier (1995), Aaker (1997) and Ourgee (1998) initiated the interest which ultimately resulted in the construction of a Brand Personality Scale by Aaker (1997)
- defined interpersonal trust in the communication process as:
- The congruence studies have delved into the similarities or correspondence between the product or brand and the celebrity and are popularly known as the "match-up" hypothesis.
- Celebrity–Brand Match The strength of a message depends on the compatibility of a celebrity with an endorsed brand. For example, Jessica Simpson could be a perfect endorser of products such as nail polish, high heels, and beauty creams, as these products suit her physical attributes. However, a firm signed her to promote a pocket knife, which created a negative impression—that the product was weak—among the target audience. Credibility For any brand–celebrity relationship to be successful, the credibility—perceived expertise and trustworthiness—of the celebrity is crucial. Information from credible sources can influence beliefs, opinions, and attitudes of consumers, which can affect their buying behavior. It is because of the decline in credibility that legends such as Lance Armstrong and Tiger Woods lost multimillion-dollar endorsements from some of the finest companies in the world. Transfer of Meaning Celebrities develop certain public personas on the basis of the characters they portray or the sentiments they evoke. This leads people to ascribe certain meanings to personalities, which are transposed to the brand they endorse—motivating people to purchase the product.