written by: Law Sin Ching

Paid Celebrity Endorsement has been one of the favourite marketing approaches for brands for years. Up till now, brands such as Nike, Chanel and Coca-Cola still use celebrity endorsements to achieve business results. This is not surprising at all – research shows that products endorsed by a celebrity can boost sales increase up to 20% [1]. However, with the constantly changing consumer purchasing behaviour, there could be doubts on whether the effectiveness would still sustain, for long.

Paid celebrity endorsement has always been effective because it helps customers visualise the brand with human traits – it personifies the brand. When there is a human connection between the customers and the brand, customers are more likely to purchase its products. On the other hand, especially for new comers in the market, paid celebrity endorsement is the most efficient way to raise brand awareness, and the fastest track to sales boost.

With the forever-evolving consumer landscape, targeting at millennials with high spending power is not as easy. So, is paid celebrity endorsement a right tool to “speak” to them? Apparently, the answer is no. According to a survey conducted by Collective Bias [2], 70% of the millennials prefer “peer endorsements” the most. In other words, they listen to their friends, Youtubers and bloggers for genuine reviews before purchasing products. Another survey by millennials.com [3] points out that 68% of millennials are “unfazed” by celebrity endorsements, meaning that celebrity endorsements have little impact on their decision journey. It does not take long for millennials to realise there are no genuine relationships between the brands and their endorsers (Jessica Alba is a perfect example: while she was the endorser of Windows Phone, she was caught using her iPhone in the public ALL THE TIME ). As a result, they start to turn their interests to genuine reviews (well-knowing that they could be partially ingenuine too).

What is all of this trying to tell us? With the competitive market landscape, talking to your customers directly (one-way) alone is not enough, be genuine is the key. Stick to your brand value, stand firm in what your brand believes in and don’t cave in spending large sums of money on celebrities who may “betray” you right after getting benefits from you. Instead, have them endorse your products voluntarily. Believe it or not, brands with genuine value appeal to celebrities outshine competitions. Below are two examples to illustrate the insight.

Acqua Di Parma, a luxury brand signature for its male fragrance collection. The brand positions itself as “Italian aristocracy, art and lifestyle”. Since its inception 100 years ago, they have been saying no to celebrity endorsements as it wants to differentiate itself from a “mass market cliché world of fashion perfumes”[4]. It is so successful that even celebrities request Acqua Di Parma to sponsor them with free fragrance as they really want to wear it.

Not only luxury brands can thrive without celebrity endorsements, an ordinary brand can do so. The American shoemaker Vans positions itself as “simple, authentic and stylish”, also never uses celebrity endorsement to promote its products. Without spending a dime on celebrity endorsements, their business growth is still impressive [5]. Famous movie stars voluntarily wear them without getting paid to do so, because of Vans’ genuine brand value and attitude. The free exposure undoubtedly helps Vans to achieve similar promotion impact by paid celebrity endorsements.
So, why spend money on celebrity endorsements when you can actually show them millions of reasons to like your products and pay for them genuinely?

[1] http://adage.com/article/cmo-strategy/marketing-celebrity-endorsements-push-product/146023/
[2] http://www.prnewswire.com/news-releases/influencer-marketing-update-non-celebrity-influencers-10-times-more-likely-to-drive-in-store-purchases-300241060.html
[3] http://momcentral.typepad.com/files/intrepid-millennial-explorers—changing-the-face-of-modern-consumerism-2014.pdf
[4] https://www.forbes.com/sites/declaneytan/2016/06/07/after-100-years-in-business-acqua-di-parma-says-no-to-celebrity-endorsements/#4b0050032bd0
[5] http://www.cnbc.com/2015/03/14/vans-how-to-make-2-billion-without-celebrities.html