How signing up a celebrity can help your business

Associating with the famous can help you connect with your customers and boost your appeal to investors

by Philip Delves Broughton
Last Updated: 09 Oct 2013

There have been celebrities throughout history, from the victors in the ancient Olympics to Roman gladiators - the classical version of today's Spandex-clad wrestlers. Nell Gwynn, the actress and mistress of King Charles II, and Lady Hamilton, Nelson's married paramour, were as much objects of interest in their time as any of Tiger Woods' girlfriends.

What has changed in the 21st century is the means by which celebrities are created, served up and made available to an audience that has always relished prying into the lives of others, and watching them rise and, inevitably, fall. With the advent of online social media and the proliferation of niche TV channels, the barrier of entry to celebworld is lower than it has ever been. You don't even need any talent, or any reason for earning your 'celebrity', apart from possessing a spectacularly large chest or being sexually involved with another D-lister.

Think of what it took for a movie star to be created in the 1920s. First, they actually had to be able to act, sing or dance. Then they had to earn the backing of one of a handful of major studios. The odds of becoming famous were minuscule. Today, anyone with a video camera can become a viral sensation. Scores of people around the world now participate in reality shows that make their lives, briefly, ours. Real talent remains a scarce commodity, but the once narrow distribution pipe that makes people famous has become as wide as the world wide web. Celebrity has become a term of disparagement, despite being the aspiration for many a tweeny.

In a recent interview in the Observer, the actress and producer Drew Barrymore exclaimed: 'Celebrity! It's become the most disgusting word on the planet. It makes me sick to my stomach. When I started out I was an actor. And now when someone calls me a celebrity, I want to shoot them. I want to go, thank you for reducing me - I've worked for 35 years, I've killed myself to be established as someone who is responsible, reliable and accountable in my field of work, yet you're calling me a name of someone who basically got famous for no reason. It's like the worst name on the planet. I hate it. And people say it all the time: "You're a celebrity." No, I'm an actor. I'm a producer. I'm a director. I'm a toad. I'm road-kill. I'm anything but a celebrity.'

But fame means money, both for the celebrities themselves and for the businesses they choose to partner with; celebrities can be the steroids of business performance. In the short term, they can dramatically improve your performance. In the long term, the consequences can be uncertain and possibly ruinous for your health. Time it right and sign up a celebrity just as the public is falling in love with them, and it can turn you into a stock market Usain Bolt. Time it wrong and you'll be clunking along in the slow lane until you can disentangle yourself from the trashy consequences.

From publishing to supermarkets, sporting equipment to management consultants, businesses face the conundrum of how to make the best of celebrities. The fortunes of many British publishers have waxed and waned, depending on the sales of celebrity memoirs, cookbooks, even novels. There have been commercial triumphs, from Jordan's three volumes of autobiography and Murray Walker's recollections of life at the racetrack to last year's Ant and Dec bestseller, Ooh What a Lovely Pair!. But there have also been abject disasters. Anthea Turner, anyone? David Hasselhoff? Michael Barrymore?

The jury is still out on Wayne Rooney's epic five-volume ú5m autobiography deal. The record so far includes poor sales and libel costs, but a successful World Cup may change that.

At a recent debate on the value of celebrity books to the book trade, Mark Booth of Hodder & Stoughton argued that these had several advantages over more highbrow volumes. They did not need much in the way of marketing, as the celebrity was already famous. Celebrities also speak to their audience in a way that supposedly more literary works do not. 'Katie Price's novels are sometimes dismissed as stupid publishing,' said Booth. 'But they are not stupid. They represent the descent into our dusty little world of a vast, extremely clever and sophisticated multimedia presence, bristling with ever-shifting ironies.' But he concluded that celebrity memoirs were a passing fad, going the same way as 'micro-histories, SAS books, books on pyramids, misery memoirs, football memoirs and so on.'

Opposing Booth's sanguine view was Liz Thomson, editor of Bookbrunch, an online news service about the book trade. She railed that 'the industry is raising a generation of editors who seem to know little or nothing of actual editing and whose job it is to shop for the latest talentless celeb.'

Even worse, the celebrity memoir is not the goldmine it was supposed to be. The high advances paid by publishers and the saturation of the celebrity market have led to the wretched situation in which not only is there not much money left for works by non-celebrities, but there isn't much left for new celebrities either.

Books, however, are small beer when one considers the tens of millions that companies pay for athletes to advertise their razor blades and sport kit. And there is no greater cautionary tale here than that of Tiger Woods.

Since Woods' sex life was exposed to the public, some of his major sponsors, including Gillette, have distanced themselves from him. From 2003 until late last year, Accenture used Woods as the embodiment of its slogan 'High Performance. Delivered'. The firm's ubiquitous airport ads featuring Woods have now been replaced by ads featuring an elephant, a chameleon, frogs and fish, none of which are likely to be caught in such compromising situations.

Two economists at the University of California, Davis, calculated the collective loss in stock market value of all the companies that Woods endorsed between the day he crashed his car into a fire hydrant and one week after he announced his indefinite break from golf. It came to $12bn. 'Our findings speak to a larger question of general interest in the business and academic communities: does celebrity sponsorship have any impact on a firm's bottom line?' said Professor Victor Stango, one of the authors of the study. 'Our analysis makes clear that while having a celebrity of Tiger Woods' stature as an endorser has undeniable upside, the downside risk is substantial too.'

Nike has sponsored Woods since the start of his professional career, choosing to stand by its man and hope for Woods' redemption. In time for the Masters tournament in April, it created an advertisement, shot in black and white, which shows Woods staring solemnly into the camera while we hear the voice of his late father, Earl Woods, saying: 'I want to find out what your thinking was. I want to find out what your feelings are. And, did you learn anything?'

The controversy generated by the ad was doubtless pleasing to Nike. It was summed up by Steve Hall, author of the AdRants blog, who said: 'On the one hand, it's sort of disgusting, and on the other hand, I thought it was somewhat of a coup for Nike to sadistically leverage what's going on in Woods' life right now for its own gain. If you can remove the human element, it's a great marketing move. But when you realise you're talking about someone's life here and the lives of others he's affected, then it can be kind of ugly.'

Jamie Oliver is an example of a successful celebrity/brand relationship. Oliver was barely off the line at the River Cafe when Sainsbury's signed him in 2000. His television and publishing careers were taking off and, together, they made a fortune. In the first two years of his association with Sainsbury's, Oliver was credited with generating an extra ú1.12bn in sales, and it has been upwards ever since. Every time Oliver suggests a novel ingredient in one of his television shows, Sainsbury's loads up in anticipation of the rush.

Not to say there isn't the occasional wobble. In 2008, Oliver wrote an open letter to every member of staff at Sainsbury's apologising for criticising the supermarket's decision not to participate in a public debate on chicken farming. Sainsbury's regarded it as disloyal, coming from a man paid ú1.2m a year to act as its public face. Oliver's wife had earlier been spotted shopping at Waitrose and, several months before that, Oliver had further offended his employer by saying that parents who fed their children fizzy drinks and crisps were 'arseholes and tossers'.

There is always the risk that a celebrity will fall from his pedestal. A few months before former England football captain John Terry was found to have cheated on his wife with a team-mate's ex-girlfriend, he was voted the Daddies Sauce 'Dad of the Year'. But for now, Oliver and Sainsbury's are the gold standard of celebrity sponsorship.

Another celebrity-business success story has been that of Kate Moss and Topshop. In 2005, Moss was reported to use cocaine and many of the brands she then represented dropped her. The Swedish retailer H&M cancelled a reported ú4m-a-year deal to advertise a line of clothes. Chanel and Burberry also decided to terminate their relationships with her. But Sir Philip Green, the owner of Topshop, saw an opportunity and signed her up. Moss' rebirth and Topshop's global expansion went hand in hand. Moss now designs a line of clothes for the chain, which has expanded from the UK to the US and around the world. Moss is said to make more money as a model and designer today than she did before the cocaine scandal.

Even seemingly strange tie-ups can succeed on the principle that all publicity is good publicity. Johnny Rotten was never an obvious candidate to advertise Country Life butter, but a ú5m campaign featuring the former Sex Pistol in tweeds drove up sales by 85%. Iggy Pop has traded in his punkish reputation to endorse insurance company SwiftCover - although, as several disgruntled viewers complained to the Advertising Standards Authority, SwiftCover refuses to insure musicians.

Martin Roll, the CEO of VentureRepublic, a business and brand strategy firm, has established three basic questions a company should bear in mind before signing up celebrities. Are they attractive - do they look good, are they intelligent, successful and charming? Are they credible - are they trustworthy and expert in the product they are promoting? And is there a transfer of meaning between the celebrity and the brand? There has to be some compatibility between the product and the celebrity. In the case of Johnny Rotten and Country Life, it was English eccentricity. For Moss and Topshop, it was about style, high fashion and edginess.

According to Reaching for the Stars: The appointment of celebrities to corporate boards, a new study by four US-based economists, just announcing a celebrity is joining a board can boost a company's share price. Disney stock went up 4.2% when it announced that the actor Sidney Poitier was joining its board. The economists attribute this to the 'visibility effect'. By drawing the attention of investors to a firm, the celebrity on the board increases interest and demand for the firm's shares. Institutional investors, supposedly the most hard-headed investors, are said to be especially star-struck when it comes to placing their money.

The study's authors conceded that when they started their research, they wondered what a sport star or actor could possibly contribute to a board discussion of cashflow statements. But they were surprised by what they found. After scrutinising 700 celebrity appointments to corporate boards from 1985 to 2006, the academics found boards that include celebrities enhanced shareholder value over one, two and three-year periods.

'The selection of such an individual to a board provides an opportunity for the firm to increase its visibility through the prominence and status associated with a celebrity director,' the study says. 'Further, such an individual can provide important networking connections or help to balance investors' perceptions and attitudes towards the firm in a more positive direction. This enhanced visibility can ultimately lead to increased share valuation.'

It's the kind of finding that drives the snobs crazy. A world that valued reality over reality television would not mindlessly reward celebrity. But there we go.

Celebrities, talented or not, are a quick way into the minds and wallets of consumers. Some have proved enduring: Delia Smith and Jamie Oliver in cooking, David Beckham in sport. But with the raft of talent and reality television shows, new celebrities are born and die every week. Identifying which have legs and which don't is a challenge.

And on the celebrities' side, for most of them there is only a small window of financial opportunity. Who can blame Chantelle Houghton, briefly famous as a contestant on Celebrity Big Brother, for taking ú300,000 for a memoir that did not sell? Or the same amount, reportedly, for the photo rights to her wedding? Which celebrity is not immune to large financial incentives? George Clooney and Brad Pitt may guard their image in the US, but in Japan they sell cars and mobile phones.

But it remains a complicated trade. At the Crime Thriller Awards in London last year, the writer Lynda La Plante launched an emotional assault on publishers who bet their future on memoirs by TV celebrities. 'Publishers, stop spending your millions on this tripe,' she pleaded. 'The publishing industry is going to implode.'

The problem is that the tripe far outsells anything on the Booker Prize shortlists. Done right, it pays a lot of salaries. Reality and talent shows may come and go - adieu, Celebrity Big Brother - but their economics remain incredibly attractive. After all, cheaply produced drama and high ratings are impossible for a broadcaster to resist.

And there's a steady pipeline of wannabe celebrities ready and waiting in the wings. Andy Warhol was right when he said that everyone in the future will be famous, but he never anticipated that 15 minutes would be too long.

SU-ELISE NASH, MIS-TEEQ (1999-2005)

If you thought appearing on I'm a Celebrity: Get Me Out of Here! was the mark of the desperate Z-lister, then spare a thought for those who only make the show's reserve list. Former Mis-Teeq singer Su-Elise Nash was selected for the jungle's subs bench in 2008, along with David Van Day, the bloke from the 1980s band Dollar. Those heady heights. Van Day eventually made it onto the show and was soon enduring a night stuck in a cage opposite Timmy Mallet. Nash did not - but she did get to live it up for three weeks in a luxury Australian hotel. 'And I got paid a lot of money for that,' she says.

In the celebrity stakes, Nash is about as far away as you can get from rubbing shoulders with the likes of Madonna and the Cruises. Instead, she forms part of the industry's long tail, perched at the very far end of the shelf of fame next to the likes of Calum Best and Bianca Gascoigne.

On Mr Paparazzi's bottom-feeding celeb gossip website, the unfortunate Nash finds herself alongside Gazza's daughter at Liverpool Fashion Week - emerging from a 'fake bake' tanning session. 'Stupid cows look DIRTY! hahahahaahah!' posts one enlightened reader, beneath a breaking news feed declaring that Big Brother champ Sophie Reade 'wants massive boobs'. You read it there first.

All publicity is good publicity, so the adage goes. And it illustrates the mutually parasitic relationship that exists between the celeb and the media: you are your brand, and you need the press - however tawdry - as much as it needs you. 'The celebrity world is not a real one,' says the level-headed Nash, who now runs her own stage school firm. 'You just have to use it to further your celebrity or your business.'

Mis-Teeq makes sure the Nash mug pops up in places that will appeal to potential students - launches for 'girly stuff' like new hair and beauty products, and the opening of clothes shops and hair salons. Plus the Brits and the Police Bravery Awards. Or doing an amateur presenting turn for web-only fitness channel LAMuscle.tv just before the Oscars ceremony. 'I've been to Hollywood, like, loads of times,' she says, filmed on a gym mat with her legs in the air. 'Look at the Oscars sign behind me. Amazing.'

There's a distinct whiff of Alan Partridge about it all. Especially as her former Mis-Teeq bandmate Alesha Dixon has had a fairly successful solo music career, as well as being both competitor and judge on hit reality TV show Strictly Come Dancing. But, even so, Nash still occasionally hits the headlines - like last year, when the Sun claimed she had been seen snogging Marvin Humes from boy band JLS at London's Mahiki nightclub.

'It doesn't bother me, but that didn't happen at all,' she says. 'Still, what can you do, sue them? It's a battle that's not worth fighting. I just tell my students it wasn't true - which is a great lesson for them in how it all works.'

Because the one thing you really can't afford to do, especially at the jobbing end of the celeb hierarchy, is to take it all literally. 'Some people start to believe their own hype, that everyone around them is insignificant, and it's sad when they lose all perspective,' she says.

- Dave Waller.

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