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Local celebrity endorsements, good or bad for small biz?

Posted by Jason Keith  September 7, 2012 08:46 AM

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Celebrities, and specifically professional athletes, can sometimes get into trouble. And by trouble I mean their professional image takes a serious hit, to the point where the public outcry damages their reputation permanently. Tiger Woods, Kobe Bryant, Michael Vick and most recently Lance Armstrong have all been under public scrutiny, which meant that big corporate sponsors were forced to make a decision: stand by the men they had signed to endorse their products, or sever the relationship for fear of a consumer backlash that could result in lost profits and negative brand perception.

Small businesses often use local celebrities in advertisements to endorse their products or services, including athletes and personalities. But is that the right approach? Could these types of endorsements do more harm than good to the businesses brand when it's associated with an athlete that is somehow been disgraced in the eyes of the public? Even if the athlete remains in good standing with the local public, is the price worth tag worth it? 

Local examples of businesses using personalities to drive their advertising include Sullivan Tire and Dunkin Donuts, but there are also local car dealerships across the state that get endorsements from local athletes. Even local hockey shops have shot commercials with Bruins players, including Brad Marchand.

There are a lot of things to consider before jumping into a celebrity endorsement ad, but it can provide a boost to a small business looking to jump start sales and marketing.

"If it's a long-term, authentic, relationship celebrity endorsements can be effective. Authentic, meaning the celebrity actually uses and loves your product - and they have for years," said Andrew Davis of Tippingpoint Labs in Newton, MA. "However, if it's merely an opportunity to associate your brand in the short term with a the celebrity du jour, I think it's a bad idea."

Celebrities have been using their star power to endorse products forever, and there's a good reason for that: it works. Large brands like Nike, Adidas and Macy's have been using celebrities to power their brands and drive sales for years. Oftentimes the costs associated with similar endorsements are prohibitive for local businesses, which is why it can be a risky proposition. It's also possible that simply having a celebrity endorse a product or service won't move the needle in terms of sales or brand awareness. The money spent on a celebrity may be better used in other marketing tactics. 

"There is a reality gap between the value of having a celeb endorsement and the return. It's risky from the start that a celeb can increase profits. Unless you have the personal inside track, it takes months of developing the match, pitching, dealing with agency types, managers etc.," said Trish Rubin of BRAND Visibility Management, who went on to say,  "Even if the spokesperson has a shining record, it's no guarantee he or she will move the needle. I think for a big branding event, if you need a big local headliner to draw a crowd, it might be best to test the water in a one shot deal. But be prepared to pay, even local celebs want 10k or more to show up and smile."

Even if the program is a success, what happens to the small businesses reputation when a personality endorsing it comes under fire? On a larger scale, big companies have the option to stop doing business with an athlete or celebrity (such as Woods, Vick, etc.) Brands like Tag Heur, Nike and Gatorade all made decisions regarding Woods when his scandal broke, but it appears no long lasting brand damage was done as a result. 

According to Dave Lavinsky, a small business expert and President of Growthink, Inc, the damage to a small business would be limited even if the athlete were to slip up and be viewed in a negative light.

"Having a celebrity endorsement gives your company a lot of credibility and many more opportunities to get media which will help you get new customers,"  said Lavinsky. "Even if the celebrity gets shamed, it's not all that bad. You'll probably get a lot of press from it which will increase your brand awareness and customers. And in most cases, people will not associate the celebrity's mistake with your company and customers will forget about the mistake soon after it occurs."

As with any marketing effort, the costs must generate a significant return on investment. Do your research, see if there's a local personality that might fit your brand and determine whether or not it's something you think will increase sales, revenue, and brand equity. 

Have you ever used a local personality or celebrity to endorse your small business? Would you consider doing so in the future? 


This blog is not written or edited by Boston.com or the Boston Globe.
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About this blog

Jason Keith has been working for and with small businesses in the New England area for more than 10 years, specifically small, micro businesses. Born and raised in Massachusetts and a former journalist, he provides a unique perspective on the issues facing small businesses locally and nationally.To reach him directly email jasonpkeith@gmail.com.

This is a personal blog. The opinions expressed here are the author's alone.

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