January 31 2015 Latest news:
Saturday, October 20, 2012
Did you know that one of the first people to pioneer celebrity endorsement was Josiah Wedgewood way back in the 1760s?
He actively promoted the fact that his pottery was used by Royalty to add to the perceived value of the products he sold.
Once Queen Charlotte started using his wares he immediately called himself “Potter to Her Majesty” and increased his prices for the nobility. He then lowered his prices for the middle class but the Royal stamp of approval on certain ranges meant he could charge a premium.
From that simple but brilliant piece of marketing insight we can fast forward over 250 years to a world where celebrity endorsement is now the norm.
Today Hollywood film stars promote luxury goods for millions and often low cost goods in the Far East so long as they are paid enough and also given a guarantee that the ads will not appear in the West to tarnish their reputation.
Today a new breed of television “celebrities” such as those from The Only Way Is Essex are paid “low” wages and told they can expect to gain large on photo deals and product endorsements.
I suspect Josiah would probably be caught between pride and shame at how far his initial concept has gone.
However history also teaches us that although we tend to put celebrities on a pedestal they can often fall off and, if closely associated with a product or service, can damage that as well.
High profile celebrities can make lots of money from brands wanting to be associated with them. David Beckham has made far more money from his product endorsements than he has ever made from actually kicking a ball.
However for every Beckham there is also an OJ Simpson or a Tiger Woods.
High profile celebrities with big product endorsements whose sponsors disassociated themselves as quickly as possible when things turned in their private lives.
In the last week we have seen sponsors finally start to desert Lance Armstrong.
Even Nike, whom he has worked with since 1996, cancelled agreements and even using the strongly worded press release stating he: “…has misled Nike for over a decade”.
This shows the scale of the issue with Armstrong as they stood by Tiger Woods when his personal life exploded in 2009 when other brands left him. Within hours of the Nike announcement, the cycle company Trek and brewers Anheuser-Busch also cancelled with more following.
To put a sense of value to this, Nike alone was worth an estimated £4.6m a year to Armstrong.
Unfortunately there are no hard and fast lessons here.
Our fascination with celebrities means that their endorsement will continue to sell products and services.
So while that is the case, brand and service owners will continue to pay them in the hope it will help them grow their bottom line.
However, even those who once seemed beyond reproach can have hidden issues that can bite those who closely associate with them.
Lance Armstrong is not the first example and he will not be the last.
Tim Youngman is head of digital marketing for Archant follow him on twitter @timyoungman
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