Celebrity endorsements: good idea, many pitfalls

I recently had the opportunity to meet and have lunch with someone I have most admired in business during my career. Fred DeLuca, founder and CEO of Subway, who died on Monday, took a concept and a $1,000 investment from a family friend and built it into one of the largest fast food franchises in history. DeLuca's story is a fascinating one, but it is a story that he told me about the now infamous Jared Fogel, former spokesman for the Subway brand, that is the purpose of this column.

When DeLuca learned about my background in brand marketing, he told me the story of how when Fogel was in college, his mother sent DeLuca a letter about Fogel's diet and how he lost significant weight by eating Subway sandwiches. DeLuca said that he walked the letter around the Subway marketing team but couldn't get any real interest in the concept.

It wasn't until DeLuca received a second letter from Fogel's mother that he became more adamant about having the marketing team become engaged in the idea of a spokesman for the company. After some testing that showed the concept resonated with consumers “Jared” was launched and what a ride it was. The company grew significantly with a cohesive and compelling national advertising campaign. Subway had succeeded in making Fogel a celebrity.

As for Fogel the person ... all he had to do was to behave. Human nature being what it is, people have a tendency to make this relatively easy goal insurmountable. That is the problem with celebrity endorsements.

It wasn't long ago that Tiger Woods was a pristine celebrity endorser. He commanded the highest prices for his endorsements. That was, until his infidelity with a number of women came into the spotlight. He lost the endorsements of Accenture, General Motors, Gillette and Gatorade. The notable exception that stayed with Tiger was Nike Golf, which had built its golf division around him.

Another celebrity endorser of the highest caliber was Bill Cosby, who played the squeaky clean, funny and wise Dr. Huxtable on the “Bill Cosby Show” for so many years. Who would have ever thought the investment in associating Bill Cosby with your product would be a risk? Yet for companies like Coke, Jell-O and Ford, the celebrity asset became a liability when accusations of sexual wrongdoing came to light.

Investing in celebrity endorsements in this social media world seems to have multiplied the exposure that can instantaneously transition a tweet, or an Instagram into an embarrassment that has the potential to cause enormous financial pain for the unwary marketer.

So, is getting a celebrity to endorse your product worth the cost and equally important but often less considered worth the risk to your brand? No doubt the borrowed interest of a celebrity can help you build familiarity and awareness with your brand if the product and the celebrity are a good match. But beyond the significant investment, you should ask how diluted is the celebrity's endorsement power — or, said another way: Have they spread their fame over too many products thereby confusing the public about their genuine belief in the product being endorsed? The more products that are endorsed by a celebrity, the weaker the association with your brand.

Here is a checklist of considerations for using a celebrity to endorse your brand:

Is there a logical and natural fit between the celebrity and your brand?

What is it that gave your endorser celebrity status? Is it compatible with attributes you want to be associated with your brand?

Consider that the celebrity also wants to be associated with attributes that will promote his/her own career — take the time to understand their brand.

Some celebrities have the potential of overwhelming your brand, resulting in consumers recalling the celebrity but not your brand.

If your celebrity is carrying too many endorsements it will dilute your brand's distinctiveness.

Make sure your audience will associate the celebrity with your brand. Don't trust your instincts on this — trust your research.

You need to budget enough marketing dollars for both the celebrity and the media. Hiring celebrities has the potential to put you into the big leagues, but it will cost you. If you want to test the celebrity waters without breaking the bank, consider hiring the celebrity for a more limited social media campaign.

Make sure any celebrity endorsement contract includes a good-conduct morality clause. This simply protects the brand from unexpected acts that would tend to hurt or embarrass the brand in any way. This is so important even when you believe there isn't a remote possibility that this particular celebrity would do anything foolish to damage his career or your brand.
Subway wisely ended its association with Fogel no doubt invoking such a clause. History shows even the best celebrities are human.

James R. Gregory is chairman of Tenet Partners, a brand innovation and marketing consultant. He has written four books on creating value with brands. Contact him directly at (203) 979-7914 or [email protected]