The influencers
The face of our favourite celebrity, an official seal of approval and digital word of mouth have major sway over what we spend our money on, says Bill Jamieson
George Clooney, David Beckham, Jennifer Aniston: we know them now as much for the products they have promoted as for the talents that brought them fame. Who can picture Clooney without Nespresso coffee, Beckham without clothes retailer H&M and Breitling watches, and Aniston without L’Oreal face cream?
Celebrities today are not just famous for who they are but their powerful ability to change our consumer habits. We may scoff at the idea that celebrity endorsement influences our behaviour when it comes to choosing products and brands. But they do. And it is a massive business.
Nearly one-fifth of all ads we view feature a celebrity. Evidence shows that almost one in three of us (30%) have bought an item because of a celebrity endorsement. Two thirds (66%) of people who buy products endorsed by celebrities are women, while younger consumers are also susceptible: more than two in five (41.2%) of those aged 18-24 admitted to their buying decisions being swayed by celebrity promotion.
The copycat cachet that adheres to celebrity is colossal. And it extends far beyond sportswear and cosmetics brand promotion. Carrie Fisher, Victoria Beckham, Lady Gaga and Reese Witherspoon each buy a French bulldog and in the follwing decade (2006-16 ) their registrations increased by 2,747% so that they are now the UK’s most popular dog. The Kennel Club reports that in the first quarter of 2018, there were 8,403 registered French bulldogs versus 7,409 Labradors.
Prince William goes to St Andrews and the university is now stunningly popular, shooting up the academic rankings. Every time Meghan Markle wears a new dress it sells out in hours.
Brand promotion has propelled David Beckham and his wife into the multi-millionaire league. The man who made the Adidas Predator boots famous has also promoted Breitling watches, Haig Club whisky, Sainsbury’s, Armani, Gillette and Pepsi. His company DB Ventures reported a profit after tax of £24.9m in 2016, while Beckham Brand Holdings made a profit, after tax, of over £16 million that year.
But Beckham was only following a trail blazed by former American superstar Michael Jordan. Back in 1984, sports shoe maker Nike launched what was to become the most successful athlete endorsement campaign in history - the Nike Jordan shoe brand. By 2009 Jordan was still boosting Nike’s bottom line with the Jordan Brand taking 75% of the basketball shoe market, and a near 11% share of the overall shoe market in the US.
A key sector in which celebrities are never out of favour is the cosmetics market. And celebrity fees here can be colossal. The luxury fashion brand Louis Vuitton hired Angelina Jolie and reportedly paid her $10 million for her appearance with one of their designer bags. Drinks giant Pepsi hired Beyonce for a multi-year contract that paid out $50 million (but Pepsi sales did not fare well over this period with a 4-7% sales decline).
So what is it exactly that celebrity endorsement does? How does it work? Why do companies chase it so ravenously? For here is a potent alchemy that brings together key ingredients for product success.
First, it works to enhance the credibility of a business: by choosing and endorsing the right celebrities for their products, companies can ‘buy in’ enhanced credibility. A business can choose a specialised niche of a celebrity that is in line with the product or service it is seeking to promote.
Second, it works to boost the brand awareness of a business. Celebrities by their nature are widely recognised; the product by association can enjoy instant recognition uplift. And the promotion extends much wider than the TV advertising jingle. Celebrities tend to be gregarious and work at their social networks – they are constantly photographed – with the pictures often spread across magazines, blogs and social media. A well-known celebrity can thus boost a company’s product or brand not only in its target market but also well beyond.
And third, consumers literally buy into the myth that using a product can confer some of the glamour of the celebrity; women imagine they can be as attractive as Jennifer Aniston while men with a Nespresso coffee machine can imagine they have the magnetic attraction of George Clooney.
It can also work to differentiate a product from rivals. L’Oreal is thought to have spent more than $1.7 billion a year on advertising to maintain its image and popularity. When consumers struggle to tell the difference between a L’Oreal face cream and an Olay one, huge amounts are spent on advertising and celebrity promotion to give their offer distinct personality and sway consumers into choosing their product.
Estimates of the value of celebrity testimonials and endorsements vary widely. The chef Jamie Oliver’s endorsement of Sainsburys is thought to have contributed £1.12 billion in incremental revenue for the group; research suggests the campaign featuring Prunella Scales and Jane Horrocks for Tesco boosted sales by an additional £2.2 billion.
But it is not just mega-brands that benefit. Creative fashion director Jane Taylor started her niche boutique business in her home town of Henley, before moving to London and in 2014 launching her boutique and studio on the Kings Road. The business was in its infancy, but after being spotted by the Countess of Wessex, who chose one of her hats, word spread quickly and she now counts other members of the British Royal Family among her clientele, including the Duchess of Cambridge, Zara Tindall and Princess Eugenie. The increase in sales and profitability has been suitably stellar.
‘The copycat cachet that adheres to celebrity is colossal
Some successful celebrity endorsements can come about by accident. England World Cup team manager Gareth Southgate became the stand-out sartorial sensation this year when he wore an unlikely £65 Marks & Spencer waistcoat paired with a pale blue shirt and stripy tie during each of England’s World Cup performances – and sales took off. M&S attributes ‘the Southgate Effect’ to a 35% increase in waistcoat sales since the tournament started.
But not all influencers are celebrities. One upscale hotelier in Sutherland was surprised to find that after spending a fortune on more conventional print marketing when he launched his new hotel ten years ago, that over 80% of his bookings came from TripAdvisor. Another more conventional way of influencing buying patterns is to win a widely-recognised gong that can’t be bought. A Michelin star, for instance, is the profit-boosting holy grail for restaurateurs, in much the same way that shops or businesses believe that holding a Royal Warrant sets them apart from rivals and is effectively seen by consumers as a guarantee of quality and reliability which they can convert into revenue.
There has been some debate about exactly how much credence consumers ascribe to stars, warrants and the like. Several chefs and hoteliers have questioned whether Michelin’s diktats are proscriptive and cramp creative freedom, with Don and Wendy Matheson, the owners of Boath House in Elgin, last year saying they were ‘walking away’ from their star as they felt being seen as ‘elitiest and formal’ was harming their business.
However, the Mathesons’ experience is not shared by most restaurateurs. Joël Robuchon, who died recently but remains the most starred chef of all time, put it best in a 2017 interview: ‘With one Michelin star, you get about 20% more business. Two stars, you do about 40% more business, and with three stars, you’ll do about 100% more business. So from a business point you can see the influence of the Michelin guide.’
Much the same is true with Royal Warrants. Although brand agency Coley Porter Bell found that 70% of adults stated that a Royal Warrant was unlikely to influence their purchase of a product, with 45% finding them unimportant, those views are contradicted by consumer behaviour. Brand Finance reported that the Royal Warrant benefitted the 800 UK businesses adorned by them to the tune of around £4 billion, with up to 5% of each company’s revenue deriving from their Royal Warrant.
The number of influencers continues to grow as media morphs, with Bloggers, Vloggers and Instagrammers becoming ever more important. But one main factor still endures: that we tend to try and ape the behaviour and views of those we admire, and that this has a profound effect upon consumer behaviour.