Celebrity Endorsements Selling Companies Short

By Linda Orlando

Companies all over the world have always paid big bucks to celebrities in order to have a famous face associated with their products. Marketing execs for years have operated on the belief that the more popular the star is hawking a particular product, the more of that product consumers will buy. Well, that belief may be about to change.

Many companies are beginning to shy away from big names and get rid of celebrity endorsements altogether, not only because endorsement fees continue to skyrocket, but more importantly because high-powered marketing execs say their brands are being overshadowed by the high-profile celebrities who promote them. Sometimes the celebrities get more mileage from the endorsement than the product does.

One multimillion dollar example is the soft-drink giant Pepsi, who nixed both Beyoncé Knowles and Britney Spears, saying that the celebrities were too big and the Pepsi brand didn’t get the promotion they were paying for and the stars were getting all the attention. Chrysler did the same thing with Celine Dion after signing a three-year, $14 million dollar deal with her to appear in commercials driving a Pacifica. The commercials were successful in producing great sales—but for the singer, not the car.

Sometimes companies are forced to drop celebrities from their ads when they come under fire, or else their own image could be tarnished by being associated with the celebrity. Robert DeNiro may be on the threshold of such a situation due to his making a rare TV commercial appearance in a controversial new American Express advertisement directed by Martin Scorcese. In the ad, DeNiro walks around New York talking about how important the city is to him, and his comment about Ground Zero is, "My heartbreak." The 30-second commercial has proven tremendously upsetting to many fans, who consider the commercial to be blasphemous, particularly for a New Yorker who says he loves the city so much. Internet chat sites are rife with angry fans fuming that the commercial shows bad taste and a lack of class, and "using a tragedy to sell a product stinks." DeNiro’s decision to shoot the commercial may have been an easy one, since American Express is a major contributor to his annual Tribeca Film Festival—but the backlash of emotion against his appearance may cause American Express to think twice next time.

Sticky social or criminal entanglements can also result in a celebrity getting the boot. Kobe Bryant’s endorsement deals are currently on hold due to his legal troubles, and Michael Jackson’s highly publicized criminal charges have certainly ended any future he may have had in commercial endorsements, and they will probably make it impossible for him to gain sponsors for his tours and endorsements as well. Magic Johnson lost all of his endorsement deals in 1991 when he made the announcement that he is HIV-positive. Both Federal Express and Sears withdrew their sponsorship of Bill Maher’s Politically Incorrect after 9/11 when Maher publicly called American soldiers "cowards" for "lobbing cruise missiles from 2,000 miles away."

Companies have to make difficult decisions about using a celebrity to endorse their product if the endorsement gets more mileage for the famous face than it does for the product they’re selling. And companies must make speedy decisions when one of their endorsers comes under fire in the public eye, or their product’s image could be tarnished. Guilt by association in a consumer's eyes translates to sinking profits in corporate bank accounts. While you'll probably never hear of all companies dumping their celebrity endorsers, more and more advertisers are finding out that multi-million dollar contracts with celebrities are not a surefire way to move products ahead of their competitors.