Celebrity endorsements aren’t just for the big brands. Smaller businesses can benefit too – just make sure the famous are part of a bigger marketing mix
Maria Sharapova’s announcement that she failed a drugs test at the Australian Open shook tennis to its core. The impact on the star will be profound; she might lose her right to continue to play professionally, and her reputation will be irreparably damaged.
Yet the greatest impact of all may be on her bank balance. Russia’s Sharapova is the highest paid sportswoman in the world. The incentive for celebrities to be involved in endorsements is clear: they’ll often make more money from them than they do from the talents that made them famous. It’s estimated that Sharapova made a cool $23 million (£16 million) from endorsements in 2014, flogging everything from make-up to watches.
The halo effect of being linked to celebrities
Closer to home, it’s reckoned that retired footballer David Beckham earned more than £50 million in 2014, despite having hung up his football boots a year earlier, thanks to multi-million pound deals with drinks giant Diageo, watch brand Breitling and Sky Sports, among others.
For the companies involved, they hope for the halo effect of being linked with celebrities. The psychology is simple: where the celeb leads, their fans will follow. But with such high-profile deals being well beyond the grasp of smaller companies, it begs the question: do celebrity endorsements work for firms of all sizes?
Entrepreneur Claire Barratt founded ClaireaBella, which makes caricatures of customers and prints them onto bags and phone covers, in 2011 as a way of making a little extra money. “Times were tough and with five young kids, we needed every bit of income we could raise,” says Barratt.
The former policewoman learned the value of a celebrity endorsement after a reality TV star was photographed carrying one of her jute bags. She recalls: “I still remember receiving a message from Chloe Sims in May 2011 telling me to go and buy a copy of the Daily Star as she had been photographed with a ClaireaBella Jute bag.”
It can be challenging to raise the profile of a small business, particularly in the fashion and clothing industry, which is notoriously competitive, says David Hathiramani, co-founder of A Suit That Fits, which sells bespoke suits online.
The company has experimented with celebrity endorsements over the years too. “We’ve been lucky enough to have a few celebrity clients. For example, Rugby World Cup winner Will Greenwood,” says Hathiramani, but adds, it’s “not something we’ve courted [as] it’s really difficult to get a traceable return on investment. We focus on directly uplifting marketing channels”.
Tracking return on investment
Barratt has put analytics tools in place to track the ROI of any celebrity involvement with ClaireaBella. Is it value for money? “When it works, the speed and scale of the uplift from the right exposure can be incredible.
“The key is relevancy. The celebs you select must fit your brand values, ethos and products and carry enough influence over your core target demographic. It has to feel natural as consumers are now fully aware of how businesses are leveraging celebs.”
It’s partially for this reason that Hathiramani prefers the organic nature of other marketing methods. In its formative years, A Suit That Fits pulled off a number of high-profile PR stunts, including parading a man around London who was naked except for a pair of underpants and a sprayed-on suit. “This was covered in Metro and we tracked sales from it for 18 months,” reports Hathiramani.
Why endorsements are only one part of the marketing mix
Barratt, too, recognises that celebrity endorsements can only be one tenet of a successful marketing mix. “It is so important you support any marketing activity with a fully considered campaign.
“We use so many different marketing channels, including social media, Google product listings and even TV. We try to leave no stone unturned and to talk to our demographic at every possible opportunity in an engaging and relevant way.”
Like many entrepreneurs, Barratt has a close eye on the increasing influence of social media stars. “I believe the market will continue to develop and we will see a shift towards influencers with high interaction rates with followers, in addition to celebrities.”