Celebrity Endorsements: Worth the Cash?

While the name Gaius Appuleius Diocles might not carry as much weight today as that of Kim Kardashian or Keanu Reeves, Diocles was the Roman Empire’s biggest celebrity. The Portuguese racked up almost fifteen-hundred career wins in chariot racing, quickly becoming the highest-paid sportsperson in history. Diocles reportedly had wealth equivalent to 27,215kg of gold.

The point is, we’ve always been willing to pay famous people for their services.

Kate Upton

Celebrity culture took on a life of its own at some nebulous point in the last few decades, arguably after Big Brother demonstrated the entertainment value of putting cameras in famous people’s houses. Now, just about everything has a celebrity’s name attached to it. Logan Paul and KSI’s Prime is a good example, as is Kate Upton and Mariah Carey’s attachment to the mobile app Game of War.

The cult of celebrity doesn’t always need a recognizable face though. Listed among the casino slots and games on the Buzz Bingo website is a title called Wild Celebrity Bus Megaways, which takes the concept of Hollywood celeb-spotting and turns it into an interactive experience. Developed by Pragmatic Play, Wild Celebrity Bus Megaways features a cast of cartoonish characters, including a dog.

While there’s no denying that a celebrity’s connection to a product is a useful way for marketers to gain the public’s attention, there’s an obvious trade-off in the amount of money it takes to make that possible. For instance, Game of War makes around seven figures a day so Kate Upton’s fee, believed to have been an even $1m, is pocket change. The obvious question to ask is – is it worth it?

Pitfalls

A 2019 paper that dealt with the effects of celebrity-brand relationships on buying behavior revealed that up to 19% of all commercials aired in the United States featured a famous person. The study also uncovered a complex web of requirements that had to be met before a potential buyer could be persuaded to convert. These included both the attitude towards the brand and the celebrity involved. 

Oddly enough, despite the popularity of celebrity endorsements in advertising, the effect on sales can be rather meager. Research cited by Entrepreneur magazine places the average uptick in purchases at just 4%. This brings us right back around to the sometimes extreme cost of hiring somebody famous to do a brand’s dirty work. Ultimately, it’s the same balance of risk vs. reward that colors any decision.

On that former point, risk, a large number of pitfalls can come with the use of celebrities in marketing. For one, any spokesperson has to have relevance to the audience, which is why a person like Michael Palin is better suited to brands targeting older demographics than an outspoken pop star would be. Of course, there’s also the possibility that a celebrity will go rogue and embarrass any business that has staked its reputation on its best behavior. The interplay of marketing and famous faces is always an interesting part of shopping, and almost always results in column inches for both parties.