A new report finds that advertising featuring celebrities are rarely worth the paper the endorsement deals are signed on.
According to Peter Daboll, CEO of Ace Metrix, writing on the Advertising Age site, his firm's study of every nationally televised ad for the first 11 months of 2010 found that spots featuring celebrities either performed below average or just at average. "One-fifth of celebrity ads had a negative impact on advertising effectiveness," according to the Ace Metrix study, 2010 Celebrity Advertisements: Exposing a Myth of Advertising Effectiveness.
The worst celebrity endorsement of 2010 was Tiger Woods' "Did You Learn Anything?" spot for Nike. Following in order of ineffectiveness were Lance Armstrong (RadioShack), Kenny Mayne (Gillette), Dale Earnhardt Jr. (Nationwide Auto Insurance) and Donald Trump (Macy's).
"The great news in all of this is that brands should not have to feel compelled to shell out big bucks on a celebrity," write Mr. Daboll. "Instead, they should be charging their agencies with creating ads that have a strong, watchable creative message."
Mr. Daboll maintains that today's consumer is more informed and too pressed for time to be moved by a celebrity in an ad. In fact, he argues that consumers are "more likely to be influenced by someone in their social network than a weak celebrity connection."
So what happens if a consumer has a celebrity in their social network? Take Twitter, for example.
A new report on the Poynter website draws attention to the practice of celebrities engaged in sending out sponsored tweets. One company, Ad.ly, sent out over 20,000 sponsored tweets last year. Celebrities typically earn a few hundred dollars from a single tweet although some high-profile people with the last name Kardashian can earn up to $10,000.
"You have 50 billion dollars a year spent globally on endorsements," Arnie Gullov-Singh, CEO of Ad.ly CEO, told Poynter. "It just hasn't moved online yet, and that's what we're changing."
Mr. Gullov-Singh added, "In social media, people are publishers, and consumers are following people. If you want (Twitter users) to follow your brand and engage with your brand and monetize your brand in social media, you need to have a real person behind that."
While each Ad.ly sponsored tweet ends with either "ad" or #ad, there is a question whether consumers are clear that celebrities are endorsing a product because they've been paid.
"It all boils down to the question of how easily readers, users, consumers, and citizens can recognize the distinction between advertising content and editorial content," Katy Culver, a professor of multimedia journalism at the University of Wisconsin, told Poynter. "I'd be very curious how many people recognize that hashtag."
"When you see celebrity endorsements on TV, they're clearly ads," Mr. Gullov-Singh, told Poynter. "Online, these celebrities, musicians, actors, athletes are all being themselves and being authentic."