Should You Shell Out Cash for a Celebrity Endorsement?

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Published March 27, 2012

| FOXBusiness

In a 24-hour media cycle -- ever-focused on celebrity life -- shelling out cash to have a star hawk your merchandise or show up at a store opening is tempting. But, how much would it take to get a Kardashian to come to your grand opening, or wear your clothes? Is it worth it for your business to take a risk on a celebrity, without a tangible return on investment?

Dorothy Cascerceri, senior editor at In Touch Weekly, said celebs are being paid higher and higher fees for little more than showing up to events. It can sometimes be worth it for a small business to shell out the cash, which is often at least $50,000, but a business owner would have to work hard in order to make the investment worth its while.

“Having a celebrity show up will not be what drives sales,” Cascerceri said. “It will be securing news outlets and media spots that pertain to the demographic the store or brand is targeting. It’s a multi-step process. If it’s targeted toward the right kind of people, you can have a much higher bottom line.”

In the past, celebrities would often put the time in when attending a small business opening or event, she said. However, as more value is placed on celebrity and pop culture, the less they have to work for the money.

“A lot of times, a $50,000 paycheck will be handed over for something as short as a 10-minute appearance at the store,” she said. “They may walk the red carpet, take a photo with the designer or key brand person and that’s about it. It’s harder to get brands to really have celebrities translate into some kind of revenue unless it’s a brand with tons of money to spend.”

Cliff Courtney, EVP and chief strategy officer at Zimmerman Advertising, said celebrity endorsements and appearances can often feel like a shortcut to fame, especially for a small company. However, Courtney has a different take on the fame game.

“Make yourself famous,” he said. “Cheap labor is available and easy to control. Look at someone like Jim Perdue—it’s about creating characters. This is a more effective way to go in terms of ROI.”

Using social media and viral video, attaining “celebrity status” as an Average Joe is easier than ever before, and costs little to nothing to give it a whirl, he said.

If you do go the route of hiring a celebrity, be sure that they make sense for your actual brand or product.

“No one believed Tiger Woods actually ever drove a Buick,” he said.“Just because you can afford a celebrity, it can do more damage to your brand if you’re not careful.”

Cascerceri, who is also the co-owner of bittle-D, a line of organic t-shirts, said celebrities sometimes do a brand a favor by wearing their clothes or swinging by a store opening for free. Or, they may genuinely like the item or clothing and wear it with no strings attached. 

“If a celebrity wears something like a shirt, hat or bag, and gets photographed, that will drive sales,” she said. “Some celebrities are paid to wear things, but others genuinely love what they wear. It can sometimes just be dumb luck.”

Courtney said small gestures can sometimes go a long way with a celebrity. If you think of ways your brand can enhance their brand, or can consider equity or trade with that celebrity, that may be the better route to take.

“That means you don’t have to hand them the cash and hurt your financial stability,” he said.

In the end, having something new and fresh is often the better way to go for a business or brand. A famous face isn’t what will bring in customers and cash at the end of the day. 

“Ideas always trump celebrity,” he said. “The second you hire a celebrity, you have run out of ideas.”

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