Monday, March 3, 2014

How To Decide If A Celebrity Can Help Your Venture

Justin Timberlake - Andrew Garfield - La red social - MadridMost startups dream of attracting a celebrity endorsement, and assume that it will take their startup to the stars. Startups such as Chirpify have managed to flourish and raise millions with endorsements from folks like Lil Wayne and Snoop Lion. Others go the way of 12Society, an LA subscription commerce startup with six celebrity sponsors, but still couldn’t get any traction.

Startups using celebrities is such a hot topic these days that Gary Vaynerchuck, noted author and entrepreneur, has coined a new term “star-ups” for the phenomenon. New books are popping up on the subject of how and when to seek celebrity endorsements, including “Will Work for Shoes,” a popular one by Susan J. Ashbrook, who has courted celebrities for twenty years.

She helps you decide if celebrity endorsement is a viable and reasonable alternative for your business, and how do you go about selecting and approaching the right celebrity. Following is a summary of the challenges that Susan and other “experts” have outlined:

  1. Finding a match between your offering and a celebrity. That means finding the perfect person for your brand. Their values need to match your brand image, including the perception of quality, educational value, as well as recognition by your target demographic. Be sure the celebrity really believes in your product.

    You should start with a service like Q Scores, which attempts to measure the appeal of various celebrities within your target market. If you are selling to young consumers, Miley Cyrus or Justin Bieber may be high on your list. For technology products, well-recognized investors such as John Doerr or Ron Conway are seen as celebrities.

  2. Funding the relationship. Celebrity endorsements don’t come cheap. Does your marketing budget allow you to roll out the red carpet to meet celebrity lifestyles, including the investment in appearances, videos, and perks? Big fat advance checks and long-term royalties are often the norm.

    On the other hand, maybe you can emulate Priceline.com, whose official spokesperson, William Shatner, agreed to do the spots for free in exchange for stock in the company. The arrangement turned out to be quite profitable for Shatner, who has since made approximately $600 million from Priceline.com, despite the dot.com bust.

  3. How to find and connect with the celebrity you want. As with all aspects of business relationships, funding, and partners, nothing beats a pre-existing relationship, or at least a warm introduction. Beyond that, the place to start is with publicists, agents, and other handlers. Major groups include CelebExperts, Baker/Winokur/Ryder, and 42West.

    One of the inside secrets of finding and meeting the right people is working with charities. Celebrities have a passion for giving, and they respect people and companies who share their passion.

  4. Potential for celebrities funding you. More and more celebrities are jumping on the entrepreneurship wagon. For example, Ashton Kutcher not only has the most Twitter followers of any “entrepreneur” (16 million), but he has actively invested in several startups. He's poured $100 million into companies like Airbnb, Spotify and Foursquare.

  5. Make the endorsement part of a bigger campaign. Building a brand and a successful company is a lot bigger than just getting a celebrity endorsement. The endorsement relies on a major marketing campaign to get the message out and setting the context for a successful delivery on the promises implied.

  6. Prepare to handle endorsement success. Customers are a fickle bunch. You must be ready with the right array of retail partners, manufacturing, and distribution arrangements before the demand hits. Marketing momentum fades fast in the face of disgruntled potential customers and long waits in line.

Many entrepreneurs and investors assume that the fascination with celebrities is a passing fad, and not worth the effort. But the evidence is just the contrary. With the advent of the high-speed Internet for videos, real-time messaging via Twitter, and everything going mobile via smartphone, I don’t see things changing any time soon. The world now has an insatiable appetite for anything and everything celebrity. Take a hard look for your own startup.

Marty Zwilling


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4 comments:

  1. Hello, I appreciate your writing. I think it make sense in some instances. However the high price often puts into question the ROI, and the risk of the celebrity's actions potentially reflecting badly on the brand adds additional risk. On top of which, for new companies where a celebrity endorsement could really provide a boost, they aren't interested. Upside potential does not seem to be attractive. thanks all!
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  2. It is a call to make whether to invest in such an expensive marketing idea. Not all are successful and thus matching the idea of marketing and the celebrity's nature becomes extremely important.

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  3. It is a call to make whether to invest in such an expensive marketing idea. Not all are successful and thus matching the idea of marketing and the celebrity's nature becomes extremely important.

    ReplyDelete
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