Advertising with Celebrity Endorsements: the Impact of Using Celebrities in Advertising

Celebrities in Advertising: Are Celebrity Endorsements Worth It?

Excerpt from the study published in February 2014.

In these times of market saturation and an almost bewildering array of functionally similar products with only marginal differences in quality, it is of crucial importance for brands to position themselves clearly and emotionally and distinguish themselves from the competition. For decades, businesses have used celebrities and other opinion leaders in advertisings to increase the awareness of their brands or to improve their image.

For example, brands such as Ferrero Rocher, Wii U and Otelo are using celebrity endorsements in their current TV spots. Thus Steffi Graf and Andre Agassi are proving their sporting prowess on the Wii U console, Tatort star Jan Josef Liefers eats Ferrero Rocher, and Günther Netzer makes calls with Otelo. In this study, cpi CELEBRITY PERFORMANCE analyzed how 16 advertised brands and products use celebrity spokespersons to affect aspects such as spot evaluation, purchase intention, perceived quality, brand affinity or brand image (cf. Table 1).

Table 1: The 16 TV ads examined in the study and their celebrity spokespersons

To analyze these aspects, cpi CELEBRITY PERFORMANCE worked with respondi AG to conduct an online survey (CAWI) of more than 2,000 persons, 14-49 years in age (the target group relevant to advertising). At least 250 people were asked about each TV spot and at least 200 people were asked about each celebrity.

In the first part of the interview, two randomly selected spots were played for each respondent, followed by questions about his or her assessment of the endorsement as well as important marketing KPIs such as the likelihood that he or she would purchase the advertised product and its perceived. The respondents were then also asked whether they recognized a celebrity in the spot and which one. This question was designed to isolate the celebrity’s impact on the respondents’ ratings. In the second part of the survey, respondents were shown the photos and names of the eight celebrities who had appeared in the advertising block they had watched earlier. Then, respondents were given two selected celebrities whom they had indicated they knew by photo and name. The respondents were then asked for their assessment of the celebrities’ image and personality as well as their ability to act as spokespersons for certain categories of products and services.

 

Advertising with Celebrities: How Can Celebrity Advertising Benefit from Improved Spot Impact?

Across all sixteen spots, the celebrities had, on average, a consistently positive influence on the eight dimensions of spot impact we were investigating. Therefore, using celebrities in advertising is worth it (cf. Fig. 1). If the respective celebrity in the spot was recognized, consumers usually perceived the spot particularly as catchy (31% vs. 16%), appropriate (31% vs. 21%), understandable (45% vs. 29%) and likeable (33 % vs. 20%), than if the celebrity was not recognized.

Fig. 1: Assessment of the eight spot impact dimensions.

Basis: all respondents (2,004); calculated as averages of the top 2 boxes on a scale from 1 = “strongly disagree” to 7 “strongly agree” (question: “To what extent do the following statements apply to the TV commercial from … ?”)

To determine the extent to which each spot benefited from its celebrity endorsement, we calculated the Spot Impact Improvement Factor. This indicates the factor by which the spot impact was increased by the celebrities (see Fig. 2). Almost all advertised brands were able to benefit significantly from their celebrity endorsement. The biggest improvements attributable to the celebrity’s endorsement were realized by the spots for Otelo Allnet Flat and Spotify-Premium: Günther Netzer and Isabell Horn ensure that persons who recognized them in the spot rated it higher by a factor of 1.29 and 1.23 on average than those who did not recognize them. In addition, the spots for the Toyota Yaris Hybrid, the ING DiBa construction loan, Poco, Danone Actimel, the Wii U, Watchever, the Opel Mokka, Ferrero Rocher, parship.de and the Hochland Ofen Aufstrich benefited significantly from their celebrity brand ambassadors.

Fig. 2: Calculated cpi Spot Impact Improvement Factor for the 16 TV commercials tested

* Significant differences in the assessment of the spot (across all dimensions) between the test and control groups (p ≤ 0.1, using variance analysis).

Celebrities in Advertising: Influence of Celebrity Endorsements on Marketing KPIs such as Purchase Intention, Perceived Quality and Brand Affinity

Our study showed a significant increase in the likelihood that respondents would purchase the products advertised by prominent brand ambassadors for Danone Actimel, ING DiBa Home, myCare online pharmacy, parship.de, Spotify-Premium and Wii U (see Table 2). Only 8.3% of those persons who recognized neither Andre Agassi nor Steffi Graf in the Wii U spot stated that it was highly likely that they would buy the product. 23.3% of those who recognized them, however, said they were highly likely to purchase the product, a factor of 2.8 times. Also, Andrea Sawatzki (from 11.5% to 23.4%), Tom Beck (from 15.3% to 27.4%), Isabell Horn (from 16.4% to 25.4%) and Cosma Shiva Hagen (from 8.9% to 13.7%) helped the products they were advertising achieve significant increases in the intent to purchase.

Table 2: List of products where the probability of purchase was significantly increased by the celebrities (p ≤ 0.1) (variance analysis)

* Shown are the mean values of the top 2 boxes on the question of the purchase probability on a scale from 1 = “very unlikely” to 7 = “very likely”.

An analogous question about the perceived quality of the products advertised shows that in eleven of the same 16 TV commercials tested, the celebrity endorsement had a positive influence on how respondents judged the quality of the products and thus contributed to a significant increase in perceived quality (see Table 3). The biggest improvements in perceived quality attributable to celebrity endorsements were seen by the Wii U with Steffi Graf and Andre Agassi (from 16.7% to 38%) and Danone Actimel with Tom Beck (from 19.1% to 37.7%).

Table 3: List of products where the perceived quality was significantly increased by the celebrities (p ≤ 0.1) (variance analysis)

* Shown are the mean values of the top 2 boxes on the question about the quality of the endorsed product from 1 = “very low” to 7 = “very high”.

Nine of the sixteen spots showed a significant increase in brand affinity thanks to the celebrity endorsements (see Table 4): The greatest leverage on brand affinity came from Günther Netzer’s endorsement of Otelo (from 4.7% to 12.9%). Almost three times as many people said that they found the Otelo brand very likeable when they recognized the former soccer player in the spot. Steffi Graf and Andre Agassi once again also exerted a strong positive influence. If at least one of them was recognized in the spot, the number of respondents who found the Wii U brand very likeable nearly doubled (from 17.9% to 35.6%).

List of brands, whose brand sympathy is significantly increased through the celebrity (p ≤ 0.1, (variance analysis)).

* Shown are the average values of the Top-2-Boxes to the question, how sympathetic the brand is on a scale from 1 = “not at all sympathetic” to 7 = “very sympathetic“.

The Influence of Celebrity Endorsements on Brand Personality: Almost All Brands Experience a Wide Range of Image Transfer Effects

However, the use of endorsements triggers different degrees of leverage in terms of brand personality and its facets, depending on the brand using a celebrity spokesperson (see Table 5). Overall, fourteen of the 16 brands tested in this study showed a significant, positive influence on their image thanks to the celebrity endorsement.

Table 5: Brand image attributes with significant increases in attribution related to the celebrity (p ≤ 0.1) (variance analysis).

With all of the respondents and the brands examined, the celebrity endorsement resulted in significantly stronger attribution of facets such as fresh, competent, honest, familiar and trustworthy to the brands advertised. In many facets, the brands Danone Actimel, ING DiBa, Otelo, Spotify, Toyota, Watchever and Wii U benefited in many ways from a positive image transfer from their endorser to the brand. When Otelo is associated with Günther Netzer, the brand receives significantly strong attributions of all 14 brand personality dimensions (cf. Fig. 3).

Fig. 3: Perception of the Otelo brand personality.

Shown are the mean values of the top 2 boxes regarding the question of the attribution of the relevant aspects related to the brand on a scale from 1 = “strongly disagree” to 7 = “strongly agree to”.

Successful Advertising with Celebrities: Tools to Ensure Successful Endorsement Campaigns

To design effective endorsement campaigns, there are three basic rules to bear in mind:

A Celebrity’s Potential Advertising Impact:

The celebrities used in advertising must enjoy high levels of recognition and a strong image with the target group. Only then they can increase the attention garnered by a campaign and positively affect the target group’s attitudes (towards brand affinity, for example) and behavior (such as the intention to make a purchase).

Celebrity/Brand Fit:

In order for a celebrity’s potential advertising impact to be fully to the benefit of the brand being advertised, there needs to be adequate fit between the perceived personality of the celebrity and the (target) brand image. Only then will the celebrity help to strengthen or reposition the brand in the desired form.

Celebrity Product Categories Fit:

In addition, the celebrity must also be a credible ambassador for the product to be advertised, otherwise there is a risk of wasting the endorsement.

cpi CELEBRITY PERFORMANCE has developed four key indices and fit indicators that address the three rules for successful celebrity endorsements and form the basis for right decisions. The cpi Index measures the potential advertising impact of a celebrity, the cpi Celebrity/Brands Fit-Index and the cpi Archetypes Map measure the celebrity’s match to the brand, and the cpi Product Categories Fit measures the celebrity’s credibility as a spokesperson endorsing the product advertised. The usefulness of these dimensions was demonstrated empirically for the sixteen commercials tested.

In this empirical study, the cpi Index for sixteen celebrity endorsements was calculated. The index measures the construct of image strength and awareness. This study showed significantly positive correlations (p < 0.05) between the construct of image strength across all celebrities, spots and brands:

• general favorability of the spot;
• seven of the eight dimensions for assessing the impact of the spot;
• brand affinity; and
• the brand’s perceived quality.

This result shows that the image strength, a central component of the cpi Index, is a useful measure for predicting the influence of celebrities on spot impact, brand affinity and the likelihood of a future purchase.

A good match of the celebrity to the advertised product category is also an important factor influencing the effectiveness of endorsement campaigns. Our analysis indicates significant positive correlations between the cpi Product Categories Fit determined for each of the 16 celebrities and the spot assessment dimensions of “is credible,” “speaks to me,” “fits the product,” “is understandable” and “is likeable.” This means that a celebrity perceived as a suitable spokesperson for the product category being advertised significantly contributes to the spot being considered credible, appealing and understandable and also increases the perception of the spot being appropriate and likeable.

In addition, there were significant positive correlations between the cpi-Product-Categories-Fit and the marketing KPIs of brand affinity and perceived quality of the product. The higher the cpi Product Categories Fit, the higher the brand affinity and perceived quality scores.

The cpi-Celebrity/Brands-Fit-Index which determines whether a celebrity is able to change the image of a brand in the desired manner could not be determined in the present study. The in-house information about the target brand image was not available to us. If a celebrity endorsement is designed to pursue archetypal brand management goals, the cpi-Archetypes-Map can be used. This allows the archetypal positioning of brands and people. The current positioning of the brand and the target positioning desired are used to determine the requirements for selecting an archetypal celebrity spokesperson.