Yes, indeed. Celebrity endorsements do work for products and services.
Ryan Reynolds has raised the bar on that – with his stake in the brand he purchased in 2018 (it was never disclosed what he paid), being sold in 2020 for US$610 million. He still does a little of their creative and ad work. Here’s the latest.
Those old days are gone
Gone are the days when a celebrity would “endorse” a product, slap their face on it and walk away with a few bucks.
Well, those days are gone if the celebrity has any smarts about them.
If they’re big celebrities, they have a whole team out there building their brand portfolios.
They sold Casamigos 4 years later for a rather juicy US$700 million (with another $300 million due based on performance targets being hit).
The Balter boys surfed the wave
Closer to home, in 2016 local surfing legends Mick Fanning and Joel Parkinson joined with 6 other main guys and 46 investors, to start Balter Brewing, a beer brand that’s kicking some serious ass, not to mention goals.
The lads cashed out in 2019 to Carton & United Breweries. No one knows for sure, but this article quotes someone “close to the deal” suggesting based on a five-year earn out agreement, that $150 million is close enough.
Maccas collabs with K-pop group BTS
And just this week, the hugely popular boy band BTS have teamed up with McDonald’s to offer a BTS Meal at participating restaurants in more than 50 countries.
It’s a 10-piece order of Chicken McNuggets, a medium order of fries and a medium Coke. But there’s a twist. The meal includes two dipping sauces, Sweet Chili and Cajun, inspired by recipes from McDonald’s South Korea locations (which is where the lads are from).
Oh….and the packaging is purple, based on one of the band members sometimes saying “I purple you.”
Which apparently means “I love, trust and support you.”
Some restaurants only sold the meal vai delivery to stop overcrowding. Didn’t work!
Endorsements work because…..
There’s clearly a few reasons why endorsements and ownership of commercial brands like the above work.
- Celebrities get cut through in the market. They get noticed.
- Consumers want to feel connected to their idols – so they want to drink what they drink and eat what they eat.
- There’s an implied quality assurance – George Clooney wouldn’t be associated with a poor quality tequila for instance.
A celebrity endorsement is just like a fantastic testimonial on steroids. But seen by 100 million more people.
100 million people who love and trust the person who told them.
(To ram home this point, yesterday (June 15, 2021) Coca Cola took a $5.2 billion share price bath after soccer star Ronaldo took Coke bottles from in front of him at a presss conference, held up a bottle of water and said “Drink water!”)