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In dynamic marketing, capturing consumer attention is a challenge many face, especially with new brands launching regularly.  

One of the most effective ways to gain popularity is to employ the influence of celebrities. A symbiotic relationship between celebrities and brands offers influence, credibility, and reach, cutting through the noise and providing a direct line to the audience. 

The two predominant strategies in this realm are celebrity-backed and celebrity-endorsed. While both approaches leverage the star power of the famous, they differ in their association with the brand.

Celebrity-backed

Celebrity-backed positioning involves a more profound connection between the celebrity and the brand. The celebrity can be a co-owner, an investor, and sometimes equally engaged in product development. 

A commitment like this portrays a genuine connection that resonates with the customers. For instance, Ryan Reynolds’ ownership stake in Aviation Gin gave the company the necessary visibility while adding a personal touch that connected the brand to Ryan. Another example is Kylie Jenner’s eponymous Kylie Cosmetics, founded by the influencer in 2015. Jenner’s involvement in the creative aspects, product development, and marketing made her a central figure in the company’s success.

From a financial standpoint, celebrity backing may require a more substantial investment plan and execution strategy. However, the long-term benefits are tenfold. An ongoing celebrity association can build brand equity over time, with the celebrity becoming the brand ambassador rather than just the face of a single campaign. Jay-Z’s acquisition of Ace of Spades Champagne increased the brand’s prestige and presented lucrative investment opportunities for the rapper-turned-entrepreneur.  

Celebrity-endorsed

This is a more surface-level but traditional route where the celebrity lends their image and star power to promote a product without necessarily a deeper involvement. 

These endorsements are straightforward business agreements where the celebrity is the brand ambassador for a specific period or campaign. While this approach may not emphasize a personal connection with the audience, it’s still a very effective marketing tool with significant benefits. The perfect illustration of this scenario is LeBron James’ longstanding endorsement deal with Nike, which led to the famous ‘LeBron’ line of basketball shoes. While LeBron does provide input on design and promotion, the overall operation and production are guided solely by Nike.

Financially, celebrity endorsements can be a double-edged knife. The initial costs are high, as most big names don’t come cheap. Celebrities with an international appeal can help brands expand to a global market. David Beckham’s collaboration with H&M increased sales and contributed to the brand’s worldwide recognition and success. But while the impact is high, the duration is limited. Once the campaign ends, the company may have to reinvest in another celebrity.

Which strategy is better for your brand?

The decision between a celebrity-backed and celebrity-endorsed strategy depends on several factors, including brand size, target audience, and long-term goals. 

For a financially conscious business just starting, a well-executed celebrity endorsement can give them the push they need to kickstart their visibility. One of the most prominent examples is Justin Timberlake’s collaboration with McDonald’s for the iconic “I’m Lovin’ It” campaign launched in 2003. Such a celebrity endorsement injects energy into the marketing campaign, skyrocketing the fast-food giant’s image, making “I’m Lovin’ It” the longest-running McDonald’s slogan in history. However, the company should know that they’re trading a large sum of money for short-term gains and will have to do it all again if they hope to stay relevant — which means more money leaving their coffers.

On the other hand, new founders can approach a celebrity looking to park their hard-earned money in a new business venture. The visibility the enterprise will garner, thanks to the celebrity’s profile, is something that marketing budgets need to achieve. Jessica Alba’s involvement in The Honest Company contributed significantly to its initial success, as her fame helped the brand gain attention and recognition in the competitive consumer goods market. The potential for long-term success can justify such a significant investment, and businesses can develop practical solutions for star-endorsed ventures.

Learning from success

Pepsi has a long history of collaborating with celebrities, one of them being Beyoncé in 2012. This million-dollar collaboration included traditional advertisements, a halftime show performance at the Super Bowl, and limited-edition cans with her image. The campaign was a massive success, with Beyonce’s image resonating with a younger demographic. However, Pepsi had to continue collaborating with various other celebrities over the years to maintain its success.

In contrast, George Clooney chose to get involved with Casamigos Tequila beyond traditional endorsement. He founded the brand with partners Rande Gerber and Mike Meldman in 2013 and has been involved in everything from product development to marketing. In 2017, Diageo acquired the brand for up to $1 billion. The celebrity-backed approach resulted in a massive financial windfall for Clooney and his partners.

Finding the right fit

Both approaches can yield substantial financial benefits, but the choice is solely upon the brand and its preferences. Incurring costs to pay for a celebrity endorsement is a big decision that new and upcoming companies can put on hold until they’re in a better position. Opting for financial services for celebrities’ businesses can help brands understand the potential for enduring success and financial rewards over time. 

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