Picture this: you’re watching your favorite show, and suddenly, a commercial pops up. You see a familiar face, a celebrity that you admire. They’re promoting a product, a startup brand you’ve never heard of before. Are you intrigued? Do you consider purchasing the product just because your favorite celebrity endorses it? Or do you simply shrug it off, just another ad with just another celebrity? This is the million-dollar question that many startups are grappling with today. Is celebrity endorsement worthwhile or is it simply a high-cost gamble?
The advent of the digital era has massively transformed the advertising industry. Social media has emerged as a potent marketing tool and celebrities have grown into powerful influencers. Big brands have traditionally used celebrity endorsements to their advantage. Nike’s collaboration with Michael Jordan or Pepsi’s association with Britney Spears are just a few instances.
However, in the startup ecosystem, the scenario takes on a different shade. Startups, unlike established brands, have a tight budget constraint. A significant chunk of their budget funneled into celebrity endorsements could be a high-risk move. Now, don’t get me wrong. I’m not saying that celebrity endorsement doesn’t work. There are instances where it does. But, is it the most efficient way for startups to market themselves? I’m not quite sure.
The facts speak for themselves. According to TAM Media Research’s AdEx India, a massive 27% of the overall ad volume share on TV were celebrity endorsements in 2021. But that leaves a notable 73% that were non-celebrity ads. This significant chunk underscores the presence of alternative, potentially more cost-effective, marketing strategies that can work wonders for startups.
Let’s consider some examples. Ayushman Khurrana and Amitabh Bachchan, two beloved Bollywood stars, have been endorsing a myriad of brands, from The Man Company and Tide to Cadbury’s Dairy Milk and Flipkart. Now, ask yourself. Do you remember all the brands these celebrities endorse? More importantly, have you ever bought a product just because these celebrities endorsed them?
With the multitude of brands a single celebrity endorses, there’s a very real risk of dilution of brand recall. Add to this the feature to ‘skip ads’ today, and we’re looking at an expensive investment with potentially low returns.
You may wonder, why then do startups choose celebrity endorsements? One major reason is the trust and immediate recognition that a celebrity brings to a brand. Megha H Desai, Co-founder, ENGN, a talent management company, explains, “India is a trust-deficit market and so tying up with celebrities builds a certain credibility as well as helps brands stand out instantly.” That makes sense. After all, consumers are more likely to trust a brand that’s endorsed by a familiar face.
However, it’s essential to remember that trust and credibility don’t always translate into conversions or customer loyalty. As per a Nielsen report, trust in traditional advertising still lags behind recommendations from friends and family, which is seen as the most credible form of advertising. This gives rise to an alternative and cost-effective marketing strategy – leveraging micro-influencers and customer testimonials.
Aman Gupta, co-founder, boAt, opines, “Celebrity marketing can create huge awareness for sure even if it doesn’t end up in conversion. But, today, you have the option of micro-influencers. People in India today trust the authenticity that comes from them.” The key here is ‘authenticity’. Unlike celebrities, micro-influencers tend to have a more personal connection with their followers, making their endorsements feel more genuine and reliable.
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Startups need to ponder over the timing and relevance of celebrity endorsements. In the initial stages, when they’re struggling to gain recognition and are strapped for cash, opting for a celebrity endorsement might not be the wisest move. Also, not every product or service needs a celebrity to vouch for it. The product should be the hero; the celebrity, just a catalyst.
To conclude, is celebrity endorsement a futile exercise for many startups? Not necessarily, but it isn’t always the golden ticket to success either. Like any other marketing strategy, it has its pros and cons. What’s essential is for startups to weigh their options, consider their budget, their target audience, and their product before jumping on the celebrity endorsement bandwagon. After all, a strategy that works for one startup may not necessarily work for another. In the world of marketing, there’s no one-size-fits-all solution. And that, my friends, is the beauty and challenge of it.