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Tiger Aside, Celebrity Endorsements Pay Off

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 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?