Sprinkling your business with celebrity stardust

Reported by StartupSmart
Friday, May 4, 2012
Miranda Kerr.

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By Michelle Hammond

A problem that every new business struggles with is brand recognition. Pitted against large, established corporations with gargantuan marketing budgets, start-ups have to battle under a cloak of near-anonymity.

So how can you alter this imbalance? One quick-fire way to boost market awareness is to use a well-known celebrity to promote your brand.

Signing up a celebrity to spruik your business is no mean feat, but the added media interest and branding power can provide long-lasting benefits for years to come.

Brian Levine knows what it takes to get a celebrity to endorse a business, and the huge effect this can have, be it positive or negative.

Along with Australian Olympian Kieren Perkins, Levine heads up Blinc International, a celebrity broker and sponsorship agency based in Sydney.

Blinc International has brokered many successful celebrity endorsement deals, including Jennifer Hawkins for Myer, Rebecca Gibney for Nintendo and Hayley Lewis for Nivea.

According to Levine, celebrity endorsement is not out of reach for small businesses, but they need to think carefully before they position their brand in this way.

"I think celebrity endorsement is achievable for small businesses," he says.

"Particularly in the retail sphere, when you're talking about products being delisted from the shelves of Woolies, Coles and IGA, products now need a voice from the shelf and a marketing plan."

"When you're sitting in front of the buyers at Coles and Woolies, and they have their own ranges, you need to be shouting loud and proud as to why you should be remaining on the shelf."

"Celebrities are being used more and more [as a result]."

That's not to say there aren't drawbacks. On the contrary, getting involved with a celebrity can be risky business, as one entrepreneur found out.

Getting it wrong

Justin Burden, founder of gym and fitness portal 1selectfitness.com.au, knows all too well what it's like to watch a celebrity endorsement deal go pear-shaped, having experienced it first-hand.

Last year, Burden approached weight loss celebrity Ajay Rochester, asking her to spread the word about the value of his website. Burden was confident Rochester would be a perfect fit.

However, Burden claims Rochester failed to live up to her end of the bargain.

"She assured us she had the talent, the experience and the media training to control an interview and to ensure that our website was in the public eye," Burden told Today Tonight.

"She had a total airtime of 25 minutes and 10 seconds, and she promoted our website for a minute and 50 seconds… The traffic to the site doesn't lie – it just was not there."

Rochester has a drastically different view of the disastrous deal, claiming that Burden still owes her $35,000 in unpaid fees and that, rather than her failing to promote the business, she toured various Fernwood Gym outlets to talk to women about weight loss on behalf of the company.

In a blog post on her website, Rochester says: "Justin had my face and testimonial on his website, on magazine ads, and in articles related to his business but once again, no sticking point…why would people go to his site? It had no hook. That is not my problem."

Of course, not every celebrity endorsement deal turns into a horror story.

Getting it right

Roxy Jacenko, founder and director of Sweaty Betty PR, which specialises in fashion, beauty and lifestyle, says celebrity endorsement is becoming an increasingly popular marketing tactic.

"With the economic downturn, more companies are turning to below the line activities such as endorsements and PR rather than straight advertising," Jacenko says.

"Also, with the rise in reality TV, there are much higher numbers of celebrities, all of whom will gladly accept endorsement or sponsorship deals as ways of raising their profile."

Jacenko believes a celebrity ambassador can be a great asset to a business, providing it's the right celebrity and the strategy is carefully considered.

"But it is not the be all and end all – it would be naive to think that every consumer can be won over or influenced by a celebrity," she warns.

"Your marketing and PR mix needs to include more than just the celebrity element."

Similarly, Erminio Putignano, managing director of FutureBrand Australia, believes celebrity endorsement is "probably the laziest approach to communication".

"It's often adopted by agencies when they don't have a better idea," Putignano says.

"Often, the brand is relying entirely on the celebrity using their own personality to create some sort of momentum and traction around the brand.

"If celebrity endorsement is becoming more frequent, that's bad news. It means people are running out of interesting ideas."

So how do you ensure a celebrity endorsement doesn't reflect badly on your business?

Weigh up the cost

Jacenko says unless your brand has a charity element, you will rarely secure any kind of deal for free.

"Celebrities are paid huge amounts to act as ambassadors," Jacenko says.

"So think about whether you can really afford it and, if so, do you have the extra budget and infrastructure to support the activity?

"Signing up a celebrity is only the start: You will need to hold a press conference or media activity to announce the relationship, potentially a photo shoot with the celebrity and your products, issue regular media releases around the relationship, include the celebrity on your point of sale, etc."

"If you can't commit to this, you won't get the return on investment for the partnership and you should look at spending your budget in other ways."

Be opportunistic

Putignano points out that it's difficult to communicate directly with celebrities, so if an opportunity arises, you need to pounce on it.

"Celebrities are by no means accessible. These days, they have their own agents so it's hard to approach them directly," he says.

"Approaching celebrities is a lot about the way you do a sales pitch. It's about finding yourself in the right situation, at the right event and being able to talk to that celebrity."

"There's no specific formula for that, especially not for a smaller business."

Find your perfect match

"There should be, for that endorsement to work well, an affiliation between the brand and the celebrity," Putignano says.

"It doesn't work when there is not so much of a personality fit – the celebrity has been put there just for the sake of being important."

"Some of the worst celebrity endorsements are from sports personalities. They often don't have a well-defined personality and act badly, so it feels as if they're being forced into that role."

"On the other side, there are examples of successful celebrity endorsements such as Billy Connolly for ING."

"This was a perfect marriage because his personality is so extroverted, so it lifted awareness and the image of ING. ING also wanted to position itself as the anti-bank, so it worked extremely well."

Jacenko says it's also important to choose a celebrity who, by and large, stays out of trouble, which means steering clear of certain sporting celebrities and entertainers.

"You are dealing with a person – people can be unpredictable and they can make mistakes – all of which can backfire on your brand," she says.

"Pretty much every week we hear about a celebrity being dropped from an endorsement campaign due to their behavior – this can cost a brand its reputation and the financial investment of signing up a celebrity."

"Remember that when you invest in a celebrity as a supporter of your brand, you are putting your trust in them to tell your story – they need to represent all your values and vice versa."

Get feedback

Jacenko says before you sign up a celebrity, it's worth conducting some focus groups with your customers to find out which celebrities would encourage them to use your products.

"Who you view to be aspirational and a good fit could be very different to your customers' [view], so don't make the decision alone," she says.

"Involve a variety of your employees from the office manager to the CEO and get some honest feedback from your customers or clients."

Make it meaningful

Once you've found your ideal celebrity, it's not enough to simply pay them to appear in an advertisement – they need to be genuinely interested in the product or service they're spruiking.

"It's key the celebrity doesn't see the role as an opportunity to make money. The celebrity needs to be almost a customer or a user – they need to believe," Putignano says.

"You want the celebrity to be involved because they are genuinely interested. The celebrity must be an ambassador for the brand, not just featured in an ad."

Reddo Media Services, a tablet publishing start-up, recently secured magazine industry pioneer Ita Buttrose as its chairman, with the Cleo founding editor also investing in the business.

Based in Sydney, Reddo Media Services is the brainchild of former CBS Interactive commercial director Troy Martin and Shane Mitchell, former managing director of content company HS3.

"Given the market we're working in, we were looking for a chairperson that wanted to be actively involved," Mitchell told StartupSmart.

"We also wanted someone with great experience of working at a board level. We put together a shortlist of people who we thought would be great, and at the top of our list was Ita."

"She has a huge experience in running very successful publishing enterprises, and her influence is massive."

Mitchell says the company's advisor, Tim Goodman, used his connections in order to set up a meeting with Buttrose, giving Reddo an opportunity to pitch their idea to her.

"We told her that while a lot of companies around the world were zigging, we were going to zag," Mitchell said.

"Rather than create another thing for publishers to worry about, we would create a service that would take all their pain away. She was really excited about this idea."

Key celebrity do's and don'ts from Brian Levine

•Know your budget and stay within your budget. Come in with a budget in mind. Don't come in and say, 'What are you looking for?'

•Make sure you know what you're going to ask the celebrity manager before you discuss it with them. Do you want the celebrity for a TV commercial, on packs, etc?

•When you draft the contract, make sure there's a renewal clause in the contract, and have a set fee to go into on renewal day.

•Use a third party – an unemotional person who can negotiate for you.

•Don't pay the celebrity's entire fee upfront. Keep something back for the duration of the contract.

•Ask the celebrity to discuss what other campaigns are coming up, and how many sponsors they've got.

•Don't sign up a celebrity just because you've fallen in love with them. Make sure there's business sense behind your decision, and make sure there's relevancy.

For more great tips on how to grow your business visit StartupSmart.com.au today.

23/07/2014 19:31Sydney, Australia. 23 July,2014
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