USING CELEBRITIES
Using a famous face to sell your not-yet-famous product can be quite
effective. It's one ofthe oldest tricks in the book, probably as old as
television itself.
If you can afford it, using a celebrity, a recognized face, or a high-profile
person can greatly increase sales of your product.
CELEBS LEND CREDIBILITY. A celebrity lends credibility to a product or service.
Consumers are more likely to be persuaded to accept a product they see used or
endoresed by someone they know.
CELEBS ATTRACT VIEWERS. A famous face can stop a channel hopper who may be
curious to see what that celebrity is talking about. A celeb can easily
increase the viewing value of an infomercial.
CHOOSING A CELBRITY
Who should you get and why? That's the starting point of any celbrity search.
How are you going to use the celebrity in your marketing campaign? Will the
celeb be a spokesperson or an endorser? Here's a checklist to consider:
APPROPRIATENESS. Telly Savalas may be an effective endorser for the Player's
Club, but would be suicide for a hair care product! Believability is a key
factor.
SPOKESPERSON OR ENDORSER? Decide which role the celebrity will play.
A spokesperson is someone who interviews customers who've used the product
being advertised. Someone presented as a customer who has actually used the
product is an endorser.
SUPPORT ALL CLAIMS. Advertisers must provide documentation to support all
celebrity claims made whether as a spokesperson or endorser.
INSURANCE AND INDEMNIFICATION. Celebrities acting as endorsers may seek
protection against possible lawsuits. he or shoe may demand that an ad-
vertiser maintain product liability insurance naming the celebrity as an
additionally insured party. They almost always require indemnification
from the advertiser.
There are, however, definite budget parameters for a successful negotiation.
Costs of celebrity acquisitions may be determined using one of the following
compensation packages: (1) a guarantee fee with back-end participation, or
(2) a straight buyout.
GUARANTEE & PARTICIPATION. Here you will be required to pay the celebrity an
up front fee plus a percentage of your gross or net sales. The up front
guarantee can range anywhere from $5,000 to $20,000. The back-end percentage
may be between 1% and 5% of either your gross or your net sales.
In this type of compensation package, however, the celebrity's guarantee
fee is actually part of the back-end participation. The guarantee fee is
actually a deductible advanced guarantee which is subtracted from the
cumulative value of the back-end percentage.
For example: You hire Celeb X for a guarantee fee of $10,000 plus 5% of your
gross receipts over a campaign period of one year. If you generate gross
sales of $500,000, Celeb X's total participation fee will amount to $25,000.
However, since you already advanced $10,000, you will only owe difference of
$15,000 at the end of the year.
STRAIGHT BUYOUT. This compensation package is a one time fee you pay a
celebrity for appearing in your infomercial. Among other factors, the length
of time you want to use the infomercial and its geographic distribution
(local, regional, or national) will determine how much you pay.
CELEBS: PERKS & MORE
The basic compensation package is usually just the beginning of the
negotiation process. The following factors are equally critical to a celeb
who is evaluating your acquisition offer:
LENGTH & EXCLUSIVITY. Usually celebrities don't want to be bound for long
periods of time. Most agreements are for one year with renewal options.
Exclusivity is also crucial. It prohibits the celebrity from endorsing or
acting as a spokesperson for a competing product. Exclusivity also defines
where you may and may not use the celeb's materials and where the celebrity's
image may be used.
RELATED MEDIA. If the celeb's appeal is strong enough to make a big difference
in your poduct's appeal, you may want to use him or her in your print ads,
sales literature, or even your packaging. Although this usually requires more
work for the celebrity, the perceived value of his/her participation in your
overall marketing campaign will definitely mean more dollars in the compen-
sation package.
