Beyonce's next paycheck from Pepsi is going to be to the tune of a cool $50 million. And this isn't your grandmother's endorsement deal. Ms. Knowles is going to be a creative partner -- "brand ambassador" -- for the beverage brand, part of the company's movement to go from sponsor to partner for musical artists.
Pepsi will pay for Beyonce to help create content and develop new ways of fan engagement. Sounds nice, but doesn't Pepsi already employ people -- real creative directors -- to do that job? And isn't Beyonce, well, busy?
A Pepsi spokesperson said that the company is "not concerned" about Ms. Knowles having the time to contribute to the partnership, considering that she has had a relationship with the company -- albeit via a more traditional endorsement model -- since 2002. "When Pepsi partners with artists, it has proven to be mutually beneficial, time and time again," said the spokesperson.
Steve Lashever, co-head of commercial endorsements at Creative Artists Agency, said that brands looking for a relationship beyond the 30- or 60-second spot often go for the celebrity partnership, in an attempt to establish more of a credible relationship. While he couldn't discuss specific clients, he said that many of the stars involved actually "roll up the sleeves, go to design studios and spend hours on end with design teams," and aren't just glorified endorsement deals. "They don't want it to be a contrived relationship," he said. "They want to make sure that something that carries their name or bears their fingerprint is going to be indicative of their design aspect and aesthetic."
Arguably, celebrity ambassadorship really took off when 50 Cent, a.k.a Curtis Jackson, and Glaceau, which made VitaminWater, forged a deal in 2007 in which the artist got a minority stake in the company. He developed a flavor, appeared in ads, and even mentioned the brand in his own songs. After the company was bought by Coke, the deal ended.
While you could at least point toward a product of Mr. Jackson's hard work, results were slightly different with Polaroid, which named Lady Gaga "creative director" at the company. She showed off the results of her efforts at the Consumer Electronics Show in Las Vegas in 2011: a digital camera and sunglasses that had two embedded LCD displays, so you could take pictures while wearing the glasses and share them in real time. While an instant mobile printer that she designed now retails for $99.95, neither of the other, more publicized products has made it to market.
The Intel deal with William James Adams, known as will.i.am, is probably one of the better known -- and more successful -- celebrity ambassadorships. With the title of "director of creative innovation," the Black Eyed Peas frontman has worked on efforts such as the Ultrabook Project, a global musical expedition he will undertake with his Intel computer.
Johan Jervoe, VP creative services at Intel, said will.i.am was hired because of his background as a producer and technology enthusiast. "Yes, there is an endorsement aspect to it," said Mr. Jervoe. "But it's more than that . He is directly able to impact the way we do work, the way our engineers work." Also, making him a team partner, and giving him a job title has "made an impact on internal pride and culture," he said. While he couldn't put a figure on the return on that investment, Mr. Jervoe said it's been "fundamentally good for the company."
Gina Collins, the head of entertainment marketing at Coca-Cola North America, who has worked with will.i.am on projects like the "Ekocycle" initiative, said that the only time brand ambassadorship works is if "the celebrity or individual has a true passion for your brand." Will.i.am, she added, "is a brilliant musician and producer and he loves technology. So that kind of partnership works because he is a proven expert."
Another thing Intel has done is to keep the partnership subtle. "We've been absent with above-the-line advertising, and let the relationship speak for itself," said Mr. Jervoe, who said will.i.am has spent about 200 hours at Intel offices in the past year.
The days of transactional endorsements seem to be numbered. Mr. Lashever's clients are "more interested in [ambassadorships] now than a straightforward endorsement." And like Mr. Jervoe and Mr. Lashever, Ms. Collins believes ambassadorships can be truly good for business as long as they are done right -- with authenticity. Otherwise, you risk customers perceiving it as just another endorsement deal with a fancy title, something that Mr. Jervoe said he has avoided by being as "transparent, truthful and straightforward" as possible.
As in the case of Ashton Kutcher, the president of pop culture at PopChips, who has a minority stake in the company, it can even be lucrative for the celebrity when a smaller company is involved and equity is on the table. "In the end, I believe in ambassadorship, although I do get a little suspicious if I don't hear a lot about it and how it's exactly going to work," said Ms. Collins.