Celebrity Endorsements for Financial Brands: Smart Strategy? Or Bad Idea?

Companies around the world hire celebrities to promote their brands. But what happens when a celebrity loses their squeaky clean reputation? Do the risks outweigh the benefits for banks and credit unions?

Subscribe to The Financial Brand via email for FREE!The use of celebrities as company spokespeople is probably one of the oldest forms of advertising, especially in the age of traditional television. The earliest television programs simply had their cast members pause the production for a brief tribute to the show’s underwriters before returning back to the program. People enjoyed seeing their favorite stars outside of their acting roles. They trusted these pitchmen and women, and they bought the sponsors’ products and services.

As the ensuing decades unfolded, actors, athletes, and other well-known people found their way into more and more commercials, with brands like Nike sometimes propelling sports heroes like Michael Jordan and Tiger Woods to even greater fame. This popular approach to branding enjoyed a good run until many of these celebrities started to waiver from the personas they portrayed in their careers.

Because spokespeople become the face of an organization’s brand, every hire of a celebrity is a risk/reward consideration. If the celebrity’s reputation gets tarnished, does the brand they were endorsing also take a hit? And these days, the risk side of the ledger seems to be growing. Celebrities are destroying the trust they’ve accrued with their fans, and are doing so in record numbers. There are exceptions of course, but as we are seeing daily in the news, many big names — even A-listers — have displayed some truly repugnant behaviors.

This isn’t a totally new problem. The advertising landscape is littered with endorsements that have failed their brands. Kirstie Alley endorsed Weight Watchers while struggling with her diet and weight. James Garner endorsed meat then had a heart attack. Jell-O can’t be to thrilled its brand will be etched in the annals of history right beside Bill Cosby’s name. Subway had to quickly distance itself from Jared Fogle who was involved in a child pornography scandal.

Beyond risky behavior, consumers are getting wiser — wary of brand’s who lean on celebrities instead of standing on their own. Pitching products by stars just simply smells like advertising to most people these days, so they are quick to tune it out. Consumers know brands are forking over millions to celebs for their endorsements.

Video Storyboard’s annual survey of America’s favorite types of commercials consistently ranks commercials with celebrities as ‘losers’.

Despite the minefield of risks, some financial marketers believe that using a well-known personality can get faster results, so they take the chance. And they might get lucky. But brand building is usually a slow process. It takes time. It’s not a single campaign or a gimmick.

When a company uses a celebrity for advertising, it’s called borrowed interest. Often times the technique is used because the organization hasn’t found or articulated any brand essence. In simple terms, they have no idea what makes them different. The brand “borrows” awareness from the star and tries to attach themselves to the star’s success. While this might be successful at generating some short-term awareness and interest, long term growth can be both risky and expensive.

In financial services, Lake Michigan Credit Union had to announce that they were suspending a five-year relationship with HGTV star Carter Oosterhouse for published reports of sexual assault with his make-up artist.

Air Academy Federal Credit Union has dropped their endorsement deal with Denver Bronco’s linebacker Brandon Marshall after he started kneeling during the national anthem before NFL games.

These examples bring the issue front and center for all financial services marketers: be warned.

It seems like a spate of endorsement failures happens every decade or so. Every time it happens, it leaves me shaking my head. I attribute it to a lack of experience. Marketing leaders turn over and move on. Younger people take their place. Advertising agencies change, evolve and even younger people join them. Memories are short or non-existent for the risks associated with attaching the future of a brand to a person.

But what’s most unfortunate is the organization and/or its agency clearly didn’t have a good idea how to position the brand in any meaningful way, so they borrow interest to create awareness. Either they didn’t enough research and due diligence needed to craft a strong brand, or they were simply skipped the strategic branding process altogether. It’s lazy and inexcusable.

Risky short-cuts are bad precedents for brand building. You need a proven process that uncovers and expresses your brand in a differentiated way to separate you from your competition. Don’t let a risky or non-strategic approach be the downfall of your organization.

All content © 2018 by The Financial Brand and may not be reproduced by any means without permission.

Comments

  1. While the author makes some good points, he erroneously implies that companies that use celebrities do so because they are inexperienced, do not understand the essence of their brand or “…they have no idea what makes them different.” This broad generalization falls short.

    Just ask Nike how well Michael Jordan helped communicate their brand in a unique and compelling way, or the impact Matthew McConaughey has had with Lincoln.

    Just ask Lake Michigan Credit Union how well the strategic partnership worked with Carter for the past five years to communicate our value brand proposition (the author never did)…record growth in membership, one of the top performing credit unions in the country, named best credit union in Michigan by Money Magazine out of all banks and credit unions, 10x increase in brand name recognition, highest brand name recognition/understanding of value proposition out of all CUs in Michigan, etc.

    Don Bratt
    SVP of Marketing
    Lake Michigan Credit Union

Speak Your Mind

*

Show Comments