Celebrity Endorsements

This story appears in the May 2001 issue of Startups. Subscribe »

It's a noisy world out there. A noisy, colorful, inundated-with-ads world where it's hard to get noticed-especially for start-ups. So how do you rise above the ruckus? It could be as simple as turning on the TV or flipping open the latest People magazine. Ignore all those commercials and ads, and look closer. Who's in the magazine and on those channels you're surfing through? That's right. We're hunting celebrities.

"Endorsements can be a great benefit to any small business, but they're especially beneficial to start-ups," explains marketing expert Patrick Bishop, co-author of Money Tree Marketing: Innovative Secrets That Will Double Your Small-Business Profits in 90 Days or Less. "When you get a celebrity to endorse your company or sign a licensing agreement, you benefit from customers' awareness of the property, [which] could include the perception of quality, educational value or a certain image."

And image is everything (or nothing, according to Sprite, whose ad campaign with NBA star Grant Hill, by the way, is a good example of a celebrity endorsement). Well, maybe not everything, but it certainly plays a huge roll in getting your company off the ground. "How do [customers] know if this business is reputable or has good products, good guarantees or good customer service?" Bishop questions. "If it's a start-up business, you don't. On the other hand, if a celebrity is endorsing them or [the business] is selling the products of a well-known person or entity, then [people assume] they must be a good company to deal with."

Even skeptics can be persuaded to buy into your product or service, according to Melissa St. James, a doctoral fellow and marketing instructor at The George Washington University who's been researching celebrity endorsements for five years. "Studies show that using celebrities can increase consumers' awareness of the ad, capture [their] attention and make ads more memorable," she says.

A number of start-ups have jumped on the endorsement bandwagon, including Priceline.com with William Shatner, eStyle with Cindy Crawford and online gift currency company Flooz.com Inc. with Whoopi Goldberg. Flooz co-founder and CEO Robert Levitan says he's seen brand awareness jump from 7 to 64 percent since bringing Goldberg aboard a couple years ago. "A lot of people ask, 'Which came first, Flooz or Whoopi?' " he says. "The words just go together, and our attitude and her attitude seem to sync up."

So how do you find the right celeb for your business? And how can you afford one? Here are some tips to make it happen:

1. Decide how Hollywood you want to go. There are several ways to get celebrities involved: paid or unpaid testimonials, where the celebrity actually uses the product/service and talks about it in an ad (think Suzanne Somers and Thighmaster infomercials); paid endorsements, where the celebrity is paid to promote the product by saying whatever the company asks them to say (back to Grant Hill and Sprite); indirect endorsements, where celebs wear the clothing, drink the soda in public, etc., but are not paid to do so; and licensing, or getting permission to use someone or something's name or image for a product, usually for a fee or a royalty.

2. Find a match. "You've got to get the right celebrity," insists Levitan. "To us, Whoopi is a paradox: She's funny but smart; she's got a lot of attitude, but she's dignified; she speaks to everybody-young and old, black and white, female and male. We wanted those attributes for Flooz."

Finding appropriate celebs is often as simple as conducting Internet research. Says Bishop, "You can also subscribe to The Licensing Letter, [which] will give you a lot of information about celebrities who are available, companies looking for products to license and companies with products to license."

3. Just do it. They can't say yes unless you ask, so pick up the phone or type up a letter. Bishop suggests sharing your company's vision, being excited and, most important, telling them what's in it for them. "How will they benefit?" Bishop asks. "It must be a win-win situation for all parties involved." Which brings us to No. 4...

4. Remember, it's not all about the Benjamins. Sure, big names like Michael Jordan command multimillions for endorsements, but there are options for cash-strapped start-ups. "You might not be able to offer them a big, fat advance check," says Bishop, "but give them something else of value-stock in your company, merchandise or whatever else you can think of."

If the celeb you want is still completely out of range, St. James suggests trying a lesser-known celebrity who may still be effective due to their knowledge of the product. Or try the testimonial alternative. "If [start-ups can] get the celebrity to try the product and use [his or her] comments in a testimonial ad," says St. James, "that may be a way of securing an endorsement."

5. Make a date. "Never sign a celebrity unless you've spoken to that celebrity and you know where their head's at," Levitan says, recalling his own initial conversation with Goldberg. Beyond being just a spokesperson for the company, Goldberg appears on the Flooz site and even speaks to retail partners and corporate clients. (She's been known to call and personally thank corporations for their business.)

6. Make it a complete campaign. A celeb may be just enough to get noticed, but don't limit yourself to just that. Suggests Levitan, "Make it about building a brand, not just about making noise."