Richard Corbett

Comment – Soft Drinks & Water - The Tightrope of Celebrity Endorsement

By | 5 April 2011

Despite the hopes of drinks companies' finance departments, the days of hiring a celebrity to push a product are still upon us. Richard Corbett looks not only at when a tie-up with a star has gone right, but also at when it has gone wrong. When it goes wrong, though, has it not also gone right?

There is a story in soft drinks folklore associated with Red Bull’s arrival into the UK in the mid-90’s. In the days before they began selling 6bn cans a year, money was probably a bit tighter and the story goes that when the drink first arrived in London, undercover Red Bull operatives went into the more fashionable nightclubs and venues in the city and unloaded hundreds of empty Red Bull cans. As they danced to Technotronic or Chumbawumba, London’s fashionista elite inevitably began to enquire what this new drink was that they could see everywhere around them. It was not long before they were mixing Red Bull with vodka. London’s chic, hippest people were now drinking Red Bull and inevitably these opinion leaders were to be the best placed drinkers to influence a whole host of other consumers.

Whether the story is true or not I am afraid I cannot substantiate, I was not one of the fashionable elite who frequented these venues but if it is true then it is brilliant.

A bigger budget today enables Red Bull to recruit celebrities to endorse its brand and reach out to its chosen audience. It achieves a similar objective to the one that the company adopted initially in London. The science behind the celebrity endorsement concept stems from the idea that we are all social animals and are constantly taking cues on behaviour and decision by observing and imitating the actions of those with whom we look up to or whose opinions we value. Marketing gurus call these people ‘reference groups’.

Celebrity endorsements have been with us for many years, in fact Coca-Cola was at it over a hundred years ago when it persuaded Hilda Clarke, a music-hall performer, to endorse them. In the soft drinks world, probably the most ground-breaking example of recent times in terms of the sheer size of the contract was in late 1983 when PepsiCo paid Michael Jackson US$5m - in those days that was a lot of money (they had to pay out a little more than that after he stood a bit too close to the pyrotechnics during filming) – to endorse its namesake CSD. It was not that long after Thriller had been released and he was at the top of his game.

Celebrity endorsement remains a very prevalent – and important - marketing tool for soft drinks marketers: Even in the last week, we have seen Cindy Crawford revealed as the face behind PepsiCo’s Propel Zero. Cindy Crawford, I imagine, would not come cheap.

The intense rivalry between the cola giants has meant that soft drinks are at the forefront of celebrity endorsement. Both brands have been around for years, offer a similar proposition and deliver a similar experience; celebrities allow both companies to differentiate themselves to their audience in a way that their products probably do not. Thus, it is not surprising that they have invested millions over the years hiring the most high profile global celebrities to drink their brands.

India, where the two go head-to-head on the celebrity endorsement front, provides as good an example as anywhere. Cricket is often considered another religion in India and it was quite a coup in January for Coca-Cola to announce that it had signed up cricketing genius Sachin Tendulkar - a player who enjoys god-like status in India (he endorses 20 brands in the county!). Tendulkar has gone up against another Indian cricketing icon, team captain Mahendra Singh Dhoni, who represents Pepsi. Dhoni scored a six to win the Cricket World Cup for India just last Saturday. It is a fascinating dual.

Judging by the size of the contracts, endorsements must have proved very effective, but experience has shown that it is not always a risk-free policy for drinks players. One's choice of celebrity is critical and even the most squeaky clean personalities may have something they did not mention on their CV. Tiger Woods is the obvious example; his Gatorade drink did not last long after it emerged that he was more active off the golf course than he was on it.

The popularity of soft drinks among children means that many companies opt for the safety and security of a cartoon character with Walt Disney being a popular source, often tied in to a new film’s release. It is unlikely that Winnie the Pooh is a secret class A drug user.

Controversial is not always a bad thing to be associated with though. It depends on your audience, as Red Bull showed when it enlisted Eminem, who in the past has regularly been on the borders of controversy. There are undoubtedly opportunities for the more risqué celebrity endorsements although I am not so sure that Charlie Sheen’s agent will be fielding many calls at the moment.

There are many other pitfalls that marketers must be conscious of: Firstly, the celebrity must actually drink the product they are endorsing. To be photographed with a rival brand provides a ‘head in hands’ moment for marketers and leaves the brand open to ridicule. The celebrity may have a shorter shelf life than expected as people who come into fashion often go out of fashion just as rapidly. The chosen one may be so much in vogue that they sign up to too many products, thereby diluting their impact.

Celebrity endorsement has proved very successful for soft drink players, but the past is littered with blunders and companies must be wary. You are always walking a tight rope when you are reliant on a celebrity who is under the spotlight 24 hours a day.

Sectors: Marketing – advertising & promotions, Soft drinks, Water

Companies: Red Bull, PepsiCo

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