And Why Some Marketers Refuse to Participate in Them

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The deal: Marketers flock to awards shows and film festivals to give away their wares to celebrities in the hopes of drumming up exposure among consumers.

The result: It’s mixed. Some marketers say freebies can boost the awareness of their brands and products at little cost, while others say it’s a waste of time and resources.

In Hollywood, success may not be determined on how much you make anymore. It’s all about what you get.
Photo: AP
Nicole Richie, who starred with Paris Hilton in 'The Simple Life' series, displays the $5,000 gift bag she received from the trade group Cotton at a recent brand promotion event.

When it comes to free product, it’s no secret that celebrities get a lot.

Swag bags

Every film festival and awards show now boasts its own brand-filled talent lounge, celebrity retreat or lavish gift bag and basket, loaded with everything from cell phones, watches, jewelry and clothing to cosmetics, all-expense-paid trips, weeklong test drives of an automaker’s newest vehicle -- even free LASIK eye surgery. And the price tags of the giveaways are escalating: Swag bags now cost well into the tens of thousands. Organizers of the Academy Awards demanded that items appearing in its gift bag could cost no less than $500 a piece. That proved somewhat difficult for sponsor M&Ms.

But are the giveaways worth it to marketers? It depends on whom you talk to.

Smaller brands that usually don’t buy traditional advertising can benefit from having well-known celebrities interact with their products -- and be seen doing so on TV or in magazines like In Style or Us Weekly. At the same time, participating in a lounge or retreat, for example, gives a marketer the chance to tout who it provided product to and gives them the photos with celebs that can be used on a brand’s Web site or at trade shows and other events. The proof can make or break a brand’s pitch for coverage: Some publications won’t consider a product unless it can say it has a celebrity follower or is being used by a trendsetter.

Ugg boots launch

That kind of exposure can give marketers instant recognition and street cred among the media, corporate buyers and regular consumers, and boost interest and, as a result, sales. It’s what helped launch Australia’s Ugg boots in the U.S.

For example, at the Screen Actors Guild Awards in January, Oman-based Amouage used the show’s backstage talent lounge to introduce its fragrance line to the U.S. market, and ended up generating word-of-mouth interest among celebs, including Pierce Brosnan. It even got Sony to place the product in its shows. Meanwhile, participating in the lounge landed high-end watchmaker LeVian on the wrist of nominee Terrence Howard (“Crash” and “Hustle and Flow”) and on the front page of The Los Angeles Times. No endorsement fee was necessary. In November, Washington-based vintner Red Diamond made its gift lounge debut at the AFI Fest to showcase its wines, which had recently begun selling at retail.

Larger companies have also benefited from the exposure.

General Mills has used gift lounges to drum up interest in its Lucky Charms cereal brand, with the character posing with the likes of Paris Hilton. And Mr. Coffee became a hit at Sundance last year, with celebs making the company’s coffee pots a must-have item.

'Getting it into their hands'

“People always think that celebrities like the more expensive items,” said Karen Wood, the founder of Backstage Creations, a Los Angeles-based company that organizes lounges, retreats and gift baskets for such events as the SAG awards, Sundance, MTV Awards, Billboard Awards and People’s Choice Awards, among other events. “It’s more about getting it into their hands first.”

This year, Sundance was hot for Equal’s new flavor sticks.

The company’s flavor sticks don’t hit retailers in certain markets until May, but Equal used the Volkswagen Lounge at Sundance to introduce the product to celebrities via a beverage bar that served hot and cold drinks made by mixologist Tony Abou-Ganim, who serves as a spokesman for the company. It also partnered with Zagat to produce a limited-edition guide of the best places for brewed beverages that was given away to celebs as part of a gift bag.

“We wanted to generate pre-launch buzz and give stars something cool and unique that they couldn’t get in any other way,” said Susan Silver, director of North American marketing for Equal. “It was a natural fit to go to Sundance where people are cold.”

Magazine write-ups

The result: Writeups in several magazines, including Celebrity Living and newspapers like the Washington Post, that featured photos of talent sampling the flavor sticks and even star-approved drink recipes that use the product.

“I can’t pay for that kind of stuff,” Ms. Silver said. “My budget isn’t huge. We wanted to kick off the year strong and were very pleased with the result.” The company has already started selling the sticks on its Web site, in response to the early buzz.

Measuring results can be difficult outside of media coverage, marketers say. Ms. Silver said that Equal counts the number of impressions it gets and compares it to the cost of the program.

The cost of pure giveaways has forced marketers to demand more for their money -- more interactions with talent—making lounges and retreats more appealing.

“The beauty of being in a retreat is the ability to interact directly with celebrities,” Ms. Wood said. “A product or company representative is always present. In that environment, you can actually talk with people.” Ms. Wood added that marketers during a retreat can pick and choose which celebrity they’d like to approach and provide product to. “Not every celebrity will resonate with every brand,” Ms. Wood said.

However, not everyone is a big backer of celebrity seeding -- whether a company rep is on hand or not.

Avoiding celebrity gifting

Los Angeles-based fashion label Trunk, which specializes in high-end limited-edition apparel featuring music acts, has stayed away from participating in lounges or even celebrity seeding.

“It’s contrived,” said Trunk CEO and founder Brad Beckerman. “You can’t chase cool. At the end of the day, once a celebrity is given something that’s made too readily available and too accessible, it’s just not cool anymore. It’s about discovery for us. If you have to shove it in their face, you’re trying too hard.”

Mr. Beckerman is among several naysayers who argue that while lavishing celebrities with products may seem like a good idea, there’s never a guarantee that the stars will ever use the products. It could go to friends, relatives, assistants, managers or agents. Anyone but the person a brand might be targeting.

Proof in point: George Clooney.

The actor donated his Oscar gift bag to the United Way. The contents of the bag, versions of which were handed to presenters and nominees at the 78th Annual Academy Awards, included a limited-edition Motorola cell phone, a Krups espresso machine, a Tahitian pearl necklace, free dog training classes and trips and lodging to destinations in Canada, Hawaii, California and New York, among a number of other items. The value of the bag for nominees is estimated at $75,000; for presenters, $100,000. The most expensive item: a $25,000 luxury package from the Halekulani Hotel on Waikiki Beach in Honolulu that includes a four-night stay in the resort's 2,135-square-foot Vera Wang Suite, with 24-hour butler service and items the guest can take home from Vera Wang's gift, bath and accessories collections. A signature treatment at the hotel's spa, dinner for two at Hawaii's only 5-star restaurant, La Mer at Halekulani, is also included.

Donated to charity

Mr. Clooney’s items were sold on eBay to benefit the United Way Hurricane Response and Relief Recovery Fund.

“Unless we know that we have a direct relationship with the celebrity, it just doesn’t make sense for us to do gift baskets,” Mr. Beckerman said.

Determining whether a celebrity is actually using a product can be especially difficult when it comes to gift certificates. The actual celebrity is never likely to actually call to redeem the item, raising the question of whether the product ever goes to them.

But for certain items, such as clothing, a marketer sometimes has clues to work with.

“You can kind of tell if the size doesn’t match,” Ms. Wood said. “If someone is calling for Cameron Diaz and requests a size that doesn’t match her at all, you can tell it’s not for her.”
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