Endorsement

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A commercial endorsement is a personal recommendation for a product or service from a known person in a message directed at a target audience.

An endorser's role is substantially different from that of a presenter, who merely disseminates product information. Typically, an endorser presents the product or service in a positive light to a broad audience. The endorsement message usually places the object or service within the context of the endorser's personal experience and conveys the recommendation in a natural and interesting manner.

There are at least six types of endorsers: celebrity, expert, lay, CEO, fictitious and third party.

Celebrity endorsers, by definition, are individuals known to a large number of people because of the publicity surrounding their lives. Expert endorsers are people perceived to have substantial knowledge or expertise relevant for evaluating the product. Lay endorsers are ordinary people who are not widely recognized but who usually resemble members of the target audience.

CEO endorsers provide a personal statement about their companies' products. Fictitious endorsers may be cartoon characters or actors playing fictitious characters who aim to enhance the image and credibility of products. Finally, third-party endorsers are individuals or organizations that stake their credibility on recommendations for one product over others using devices, such as the seal of approval awarded by Good Housekeeping.

During its long history, advertising has seen some unlikely endorsements. When Charles Lindbergh took Hershey candy bars with him on his historic solo flight from New York to Paris in May 1927, Hershey rushed to the newspapers with a drawing that depicted the gallant flier at the controls of the Spirit of St. Louis. A novel feature of the ad was that, with Mr. Lindbergh's permission, Hershey bars were portrayed as the wings of his famous airplane. This same type of association was reprised a generation later when U.S. astronauts took a powdered orange drink called Tang into space.

Regulation

Broadcast sponsorship rules require transparency about the persuasive intent behind endorsements, especially when the person is paid for the endorsement. The rules are based on the principle that audiences are entitled to know when they are being persuaded and by whom.

Beginning with the Radio Act of 1927 and continuing with Section 317 of the Communications Act of 1934, the broadcast sponsorship rules have required that all contents (including endorsements) broadcast for a "valuable consideration" must be announced as having been paid for, with the name of the payer given. The rationale is simple: Serious conflicts of interest can remain hidden if such information is not available to the recipients of a message.

In a similar vein, "masked" celebrity endorsers can undermine the spirit of broadcast sponsorship rules if they deliberately conceal the fact that they have been paid to endorse a product. The motivation for not revealing such information is, of course, that audiences generally perceive a spokesperson who is paid to say favorable things about a product as being less than objective.

An example of a "masked" celebrity was baseball star Mickey Mantle, who once touted Ciba-Geigy Corp.'s arthritis drug Voltaren as a miracle product on NBC's Today show. The incident prompted NBC's science reporter to point out later that Mr. Mantle's enthusiasm was understandable since he was a paid spokesman for the company. Faced with a criminal investigation into such practices, Ciba-Geigy agreed to revamp its marketing strategies to prevent abuses in the promotion of prescription drugs.

Effectiveness

There is a considerable body of research on the most effective use of endorsements. Research on sports celebrities, for example, has concluded that they are more effective at endorsing sports-related products than other products and that a long-term relationship between a sports celebrity and a product is more effective than a limited one.

Researchers also have explored ways of estimating the long-term payoff of an endorser to his or her sponsor by using Q-ratings, Video Storyboard tests and other customized approaches.

Q-ratings, for example, involve the evaluation of celebrities by representative panels of respondents. The ratings represent the percentage of respondents who are familiar with a celebrity and who evaluate the person as "one of my favorites." Video Storyboard tests represent an annual national survey that queries respondents about the effectiveness and credibility of famous spokespersons in actual ads. Another research approach compares respondents' perceptions about mock ad campaigns involving different celebrities.

Researchers have found that consumers neither fully comprehend the meaning embodied in a seal of approval nor do they believe that the claims in an ad are enhanced by its presence. Nevertheless, there are many instances of third-party endorsers eager to offer recommendations for specific products. Some, however, have regretted those decisions.

In 1997, the American Medical Association endorsed several Sunbeam Corp. products (blood pressure monitors, heating pads, thermometers, humidifiers and vaporizers) in return for potentially millions of dollars in royalties. Following a week of intense public criticism and allegations of conflicts of interest, the AMA dropped its plan to endorse Sunbeam's products.

Problems and pitfalls

Companies can face numerous problems and pitfalls when they choose to use celebrities, experts or third parties to endorse their products. One problem that has occurred fairly often is that endorsement contracts with a sports team or organization may conflict with the endorsement deals of individual players.

At the 1992 Summer Olympics in Barcelona, for example, Michael Jordan, an endorser for Nike products, refused a request from the U.S. Olympic Committee to wear Reebok gear at the medals ceremony. Reebok had paid the USOC $4 million to have U.S. athletes wear its products.

Companies that hire celebrity endorsers can face other types of problems. James Garner, who was a spokesman in a national ad campaign for the Beef Industry Council, subsequently underwent heart bypass surgery. Cybill Shepard endorsed the same advertiser but later claimed in an interview that she did not eat meat. Athlete O.J. Simpson's legal battles following allegations that he had murdered his wife and one of her friends appeared to have ended his career as a product endorser.

Advertisers can respond to such challenges in a proactive way—that is, by carefully checking the backgrounds of prospective endorsers. However, they may have to react to such problems after they arise by ending endorsement campaigns to prevent further damage to their brands. Such action is made easier by including a so-called morals clause in the contract with the endorser that allows the advertiser to terminate the arrangement with a partial fee or no fee at all if the endorser's actions threaten the image of the brand.

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