Tiger Aside, Celebrity Endorsements Pay Off

Last Updated Dec 21, 2009 8:06 PM EST

The Tiger Turmoil probably has many marketers rethinking the wisdom of celebrity endorsements. Imagine the wreckage after your public face, in whom you invested millions of dollars and uncalculable brand equity, is convicted in the court of public opinion (Tiger, Kobe) or the court of law (Michael Vick)

Don't act so fast, says Harvard Business School professor Anita Elberse writing for cnn.com: Celebrity endorsements usually pay off big. Her own research shows these benefits:

  • Sales for brands in a variety of consumer-product categories jumped an average of 4 percent in the six months following the start of an endorsement deal.
  • Several brand sales rocketed more than 20 percent after teaming up with an endorser.
  • The strategy helps to differentiate brands from their competitors, which did not experience any spillover of increased sales.
Celeb endorsements work by opening new markets with the fan base of the endorser. Also, endorsements trigger sales by reassuring consumers of the quality of the endorsed brand. And even if the relationship blows up in the end, as did the partnership between Tiger Woods and Accenture, "any short-term negative effects are very unlikely to outweigh the strong benefits the company experienced during its six-year relationship with the golfer," Elberse says.

Has a celebrity endorser ever prompted you to buy a product, or feel more positive about it?

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.