Celebrity Endorsement Strategy:7 Ways It Can Affect Your Bottomline

When you think about your favorite celebrity, your first thought may not be how their celebrity status can be seen as an asset on a balance sheet. However, as celebrity culture, a $50 billion dollar industry, is exploding globally companies are placing more value on the acquisition of a celebrity as a means to generate and increase revenue around a certain products and services that resonates with their target market.

The Perfect Combination
Its the perfect combination, because according to an article in AdAge.com, "brands love endorsements and consumers love celebrity." Also, the article stated that  recent studies of hundreds of endorsements have indicated that sales for some brands increased up to 20% upon commencing an endorsement deal.

However, a celebrity endorsement can easily turn into a liability when the endorser becomes problematic as in the cases with Tiger Woods or Michael Vick. The risk that marketers take is when negative behaviors surface  in the life of the endorsing celebrity, tarnishing the image of the brand and repelling customers from the brand because of the association.

The 7 Criterias To A Sound Celebrity Endorsement Strategy
So what are some of the areas that marketers must consider when looking to select a celebrity asset for an endorsement?

1. Brand must make sure that celebrity resonates with target audience so they can activate buying fans of the celebrity.

2.Brand must choose celebrity that fits in to the narrative of the brand to establish connection between the brand and educating the buyer.

3. Brand must choose a celebrity that highlights an attribute of the product or service that may not be highlighted in no other means.

4.Brand must be conscious of the celebrity's already existing personal brand as a means to build an option of reciprocity and cross promotions.

5. Brands must include celebrity in the product development phases to spur innovations.

6. Brands must choose and use celebrities that may break consumers perceived notions of the product/service offering.

7. Brands must establish  celebrity partnerships that impact the business model.

We Want To Hear Your Thoughts:

• In the age of social media, how important or unimportant is a celebrity endorsement strategy foe your brand?

Developing Your Marketing Budget In 3 Steps

Marketing and advertising is the line item on the income statement that may be the most difficult to figure out. With so many marketing methods to choose from understanding the nature of your company and who exactly your trying to reach is a good starting point for creating a budget that is most effective.

The Inc. article,"How To Build Your Marketing Budget" offers insights, even of the most experienced marketers. The first point of reference the author mentioned was figuring out first how much you expect to spend. Like I mentioned earlier this could be a battle to get the "perfect" number. 

Step 1: How Much Should I Invest In Marketing?

Some of the suggestions were to invest 1% to 10% of sales, another marketing expert weighed in and mentioned that  a company should invest as much as they can in marketing, especially in the first few years. 

Also, it is important to understand your profit margins as well.

Step 2: Traditional or Non-Traditional Marketing?

The next suggestion the author gives is to figure out how and where you should market, by either going the traditional route or look into more of the social media resources. One of the experts suggested that before you start looking at that it is important to know exactly who you are targeting and what channels of marketing would be most relevant. 

In terms making social media apart of your marketing mix, it is very important that you produce compelling content on your blogs, social networks, such as Linkedin, Facebook, Twitter, etc. This type of engaging content, will keep customers and potential customers coming back for me. 

Even though social media channels are least cost effective in comparison to traditional platforms, its good to keep in mind the time commitment necessary to make social media work.

Step 3: Know Thy Metrics

The last suggestion was to track all marketing activities. One metric that is important to know is the cost per new customer. Once you figure out this number, you will be able to work on getting that number as low as possible without affecting profit margins. 

Also, paying close attention on what marketing channel is working most effectively in your marketing mix. Once that is identified continue to tweak that channel until you are yielding the results you are looking for.

We want to hear your thoughts?

• What other things would you add to this list?