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250_celebrity-v1.1Celebrities are increasingly becoming brands in their own right, using their status to build personal empires. This includes making money from appearances, licensing their names, endorsing other brands, launching their own products and supporting charities.  Celebrity endorsements can take the form of giving expert opinions, being a spokesperson or model for a product, or simply being associated with a brand or mentioning it in social media.  Endorsement by athletes has become an integral part of the marketing strategies of major sportswear companies such as Nike, Adidas and Puma. In 2012, Nike reportedly spent a substantial US$909 million on endorsement contracts.  In addition, athletes commonly endorse a range of other products, from luxury watches to soft drinks. Indeed, most successful sportspeople nowadays earn more from endorsements than they do from their sport itself.

A downside to celebrity endorsement is that companies risk damaging their brands when they establish a close connection with a star who falls out of favour with the public as a result of negative publicity or a personal scandal (eg Lance Armstrong and Oscar Pistorius).  Despite golfer Tiger Woods’ fall from grace in 2009, following revelations of a series of extra-marital affairs, he and tennis player Roger Federer still led the world in terms of endorsement income in 2013, earning a total of US$65 million from sponsors.  In order to mitigate the risk of celebrity endorsers becoming embroiled in scandals, some companies have begun to use specialised insurance plans and cancellation clauses in endorsement deals.

With interest in cooking shows – and food in general – greater than ever, culinary experts also rank as some of the highest earnings celebrities in the world. Their sources of income include restaurant chains, TV shows, books, brand endorsements and merchandising deals.  Several celebrity chefs have successfully built up multi-media empires, with the UK’s Jamie Oliver and Gordon Ramsay now worth an estimated US$170 million and US$80 million, respectively.  The success of famous culinary experts is as much to do with their personality and style as their cooking and entrepreneurial skills. Celebrity chefs rely on a combination of food knowledge, emotional connection and branding in order to succeed.  Many celebrity chefs also work with the foodservice industry, airlines and retail food companies to produce signature dishes. This helps companies to differentiate their offerings or reposition themselves, for example with a more ethical or more upmarket image.  Celebrity chefs can have a major influence on national eating habits. As well as introducing the public to new types of ethnic cuisine, they can also bring into vogue certain ingredients or successfully campaign for healthier eating or more sustainable production methods.

Companies have long tried to tap into a celebrity’s fan base to help them reach a larger audience and sell more products. The rapid worldwide growth of social media such as Twitter, Facebook and Instagram has enabled them to do this much faster and more effectively.  Many companies are prepared to pay US$10,000 or more per tweet for a high-profile celebrity endorsement. Leading the Twitter rankings in terms of number of followers in February 2014 were Katy Perry, Justin Bieber and Lady Gaga, each with more than 40 million followers.  There has been much debate about the ethics of advertising via a celebrity’s personal account, with footballers Rio Ferdinand and Wayne Rooney, socialite Kim Kardashian and actor Charlie Sheen all having faced accusations of breaking advertising standards.  Word-of-mouth has always been very powerful in China, and the fans of celebrities pay great heed to what their idols say. Social media websites, such as Weibo, increasingly act as a hub for celebrities, allowing them to connect with their fans more directly and quickly.

Celebrities are becoming more involved in the creation and marketing of their own products, from fashion, sport and beauty to electronics and packaged foods. Many big stars have a ready-made market of dedicated fans who will buy anything associated with their name.  One of the most common areas in which celebrities become involved is fragrances. The trend has recently intensified, with hundreds of fragrances being launched annually by anyone from A-listers to reality TV stars.  Many celebrities have also put their names to make-up and skin care lines, fashion collections, and, in the case of chefs, foodservice menus and kitchen appliances. Products generally reflect the particular styles or values of the celebrity.

Traditional endorsements have evolved as celebrities are taking a more proactive role in product development and marketing. Big companies have begun to offer an increasing number of “creative director” titles to mega stars.  Another new celebrity sponsorship model involves smartphone companies buying temporary exclusivity on new album releases. This gives the artist guaranteed album sales, marketing buzz and a free mobile distribution channel, while the sponsor gains massive publicity.  Many well-known personalities have distinctive speaking voices and, in addition to being employed in radio advertisements or the animated film business as voice-overs, they are increasingly being used for satellite navigation systems and other speaking apps.  Most charities and NGOs cultivate relationships with celebrities, due to their ability to increase public awareness of their causes and thus encourage more donations. Celebrities can be spokespeople, board members or even founders of their own charities.

 

TypesExamples
“Celebrepreneurs” (brand empires) Oprah Winfrey, Brand Beckham, Jamie Oliver
Licensing name George Foreman grills, Ainsley Harriott foods
Brand ambassadors (celebrity spokespeople) Tiger Woods (Nike), Jane Fonda (L’Oréal), Beyoncé (Pepsi)
Celebrity-branded products Lady Gaga Fame (fragrance), Beats by Dr Dre (headphones), Ken Hom (woks)
Brand collaboration Sean Combs (P Diddy)/Diageo, Rihanna/River Island & MAC Cosmetics
Assuming a company title Jay-Z (“co-brand director” for Budweiser Select), Alicia Keys (“global creative director” for Blackberry)
Co-advertising partnerships Samsung/Jay-Z
Endorsing products on social media Kim Kardashian, Justin Bieber
Lending celebrity voicesKevin Hart/Waze
Promoting charitable causes Angelina Jolie & Brad Pitt (Maddox Jolie-Pitt Foundation), Elton John (Elton John AIDS Foundation)

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