Celebrities can attract new customers, boost sales, and be iconic in advertising campaigns. With increased importance placed on social media marketing, endorsements can also come from smaller scale stars like Instagram influencers. Consumers will buy a product or service because their favorite influencer raves about it on Tik Tok or to support their favorite actress’s new product line, regardless of the celebrity’s actual involvement in product creation. [i] Despite the enormous benefits to celebrity and influencer endorsements, marketers face equally great risks to partnering their brand or product with an individual. Scandal and controversy are difficult to predict and can damage a company’s reputation and sales.
Celebrity endorsements can look different for a large corporation versus a small business. A large company may be able to sustain declines in revenue or the loss of one product line as a result of a failed endorsement, while small businesses “have no control over the endorser, and little room to deal with their unexpected misbehavior and how it reflects on the endorsee.” [ii] To avoid the resources needed to secure celebrity partnerships, small businesses may take advantage of influencer marketing. However, this social media marketing strategy has the same high stakes and high benefits as mass marketing with famous celebrities. Despite the risks, endorsements are necessary both for large and small companies because we live in “a golden age of celebrity branding.” [iii]
“Marketers regularly face sudden, unexpected dilemmas about how or if to respond when they are suddenly mired in controversy.” [iv]
When Jared Fogle, former Subway spokesman, was arrested, Subway’s reputation was significantly impacted and “sales decreased 3% from the previous year, despite adding hundreds of new stores.” [v] Matt Lauer, NBC’s Today Show anchor of 20 years, is another example. In cases like Lauer’s, “Not only is their behavior a direct reflection of their own morality, but it will likely cost their former associated brands millions, if not billions, in lost earnings and revenue.” [vi] Some brands are quick to drop endorsements when scandal hits because of these risks. On the other hand, companies can choose to stick by their partners in times of controversy like Tiger Woods and Nike.
Celebrity controversies have long plagued marketers. But what can marketers do to ensure that a celebrity scandal does not severely impact their company’s reputation or the launch of a new product line?
CEO of Edelman, Richard Edelman, says, “Companies should determine where they stand on major issues, such as inclusion, sustainability and vaccinations, before they need to confront them.” [vii]
Recently, Green Bay Packers’ quarterback, Aaron Rodgers, got caught up in controversy over his comments about COVID-19 vaccinations. [viii] Prevea Health decided to end their partnership with Rodgers in light of the controversy because his comments do not align with their company values. In contrast, State Farm Mutual Automobile Insurance chose to keep their partnership intact. They did, however, appear to pull back some of their television ads that featured Rodgers this past week. [ix] This move allows State Farm to effectively maintain the possibility for future marketing campaigns with the quarterback while putting distance between themselves and Rodgers’ current controversies.
Because celebrities can face pressure to share their points of view on sociopolitical issues, companies have to be ready for potential controversy if their celebrity counterpart shares an opinion that half their consumer base disagrees with. Ensuring company values and actions are known to employees and customers can alleviate potential issues. [x] When marketers inevitably face the dreaded celebrity endorsement scandal, they can be more prepared by understanding their own company values, keeping in mind their customer value proposition and how they want customers to view their company, products, and services.
The importance of building and maintaining customer relationships can be marred by celebrity or influencer controversies, which is why many brands chose to dissociate with celebrities after scandal hits. But making the tougher choice to stay with the controversial influencer can sometimes be beneficial. When photos of Michael Phelps with marijuana surfaced in 2009, a few sponsors, including Kellogg’s, ended their contract with the Olympian. [xi] Shortly after, Under Armour still made the decision to partner with Phelps and has maintained their partnership ever since. In 2016, Under Armour released the Rule Yourself campaign, creating a video with Droga5 that featured Phelps with the message, “Its’s what you do in the dark that puts you in the light.” [xii] The campaign highlights the challenges – controversial and otherwise – Phelps has overcome throughout his career.
Watch the video campaign here:
If an influencer scandal truly damages company reputation or grossly misaligns with company values, then ending that relationship is an obvious choice. Marketers can also handle controversy like State Farm with Aaron Rodgers or Under Armour with Michael Phelps. Transparency, quick thinking, understanding company values and aligning those values with brand messaging are crucial to managing unexpected controversies that come with celebrity and influencer endorsements.
Questions Marketing Managers would consider:
- Think about an example of a celebrity endorsement gone wrong. What did the celebrity and company do or not do in response to the controversy? What can we learn from these examples?
- If you were a marketing manager, how might you handle a scandal associated with your brand’s influencer?
- Why can endorsements be valuable and harmful to branding?
- Why do you think some companies seek celebrity endorsements over fictional spokespeople such as the Geico Gecko that are less likely to become controversial?
[i] Hess, Amanda. (April 14, 2021). “The Triumph of the Celebrity Endorsement.” The New York Times. https://www.nytimes.com/2021/04/14/arts/celebrity-endorsements-catherine-zeta-jones.html
[ii] Bones, Billy. (2021). “How Small Businesses Can Utilize Celebrity Endorsements.” Small Businesses Do It Better. https://smallbusinessesdoitbetter.com/2014/02/small-businesses-can-utilize-celebrity-endorsements/
[iii] Hess, Amanda. (April 14, 2021). “The Triumph of the Celebrity Endorsement.” The New York Times. https://www.nytimes.com/2021/04/14/arts/celebrity-endorsements-catherine-zeta-jones.html
[iv] Graham, Megan. (November 9, 2021). “How Marketers Can Prepare for Unexpected Controversies.” The Wall Street Journal. https://www.wsj.com/articles/how-marketers-can-prepare-for-unexpected-controversies-11636475782
[v] Newton, Gordon. (February 5, 2018). “The Financial Fallout Of Celebrity Endorser Misconduct.” Forbes. https://www.forbes.com/sites/forbesagencycouncil/2018/02/05/the-financial-fallout-of-celebrity-endorser-misconduct/?sh=5307f8906915
[vi] Newton, Gordon. (February 5, 2018). “The Financial Fallout Of Celebrity Endorser Misconduct.” Forbes. https://www.forbes.com/sites/forbesagencycouncil/2018/02/05/the-financial-fallout-of-celebrity-endorser-misconduct/?sh=5307f8906915
[vii] Graham, Megan. (November 9, 2021). “How Marketers Can Prepare for Unexpected Controversies.” The Wall Street Journal. https://www.wsj.com/articles/how-marketers-can-prepare-for-unexpected-controversies-11636475782
[viii] Graham, Megan. (November 9, 2021). “How Marketers Can Prepare for Unexpected Controversies.” The Wall Street Journal. https://www.wsj.com/articles/how-marketers-can-prepare-for-unexpected-controversies-11636475782
[ix] Abdel-Baqui, Omar. (November 8, 2021). “Aaron Rodgers’ State Farm TV Ads Cut Back After Vaccine Comments.” The Wall Street Journal. https://www.wsj.com/articles/aaron-rodgers-state-farm-tv-ads-cut-back-after-vaccine-comments-11636392910?cx_testId=3&cx_testVariant=cx_2&cx_artPos=3&mod=WTRN#cxrecs_s
[x] Graham, Megan. (November 9, 2021). “How Marketers Can Prepare for Unexpected Controversies.” The Wall Street Journal. https://www.wsj.com/articles/how-marketers-can-prepare-for-unexpected-controversies-11636475782
[xi] ISPO. (August 11, 2016). “Michael Phelps: Under Armour’s Has Olympic Champion under Contract.” ISPO.com. https://www.ispo.com/en/people/id_78664354/superstar-michael-phelps-how-under-armour-is-profiting-.html
[xii] Under Armour. (March 8, 2021). “Under Armour Premieres New RULE YOURSELF Campaign Film Featuring Michael Phelps At Global Headquarters In Baltimore.” Under Armour, Inc. https://about.underarmour.com/investor-relations/news-events-presentations/corporate-news/id/12061