Lights, Camera, Business: Bridging showbiz and business
Jun 13, 2024
Celebrity endorsements are a marketing must-have for businesses big and small because, let's face it, we all perk up when our favourite stars give a product their thumbs up!
But, gone are the days of mere endorsements—today's celebrities not just lending their pretty faces to products and brands, but are building their brands and cashing in on their fame with diverse business strategies. They are doing serious business.
Stars like George Clooney, Brad Pitt, Kardashians, Alia Bhatt, and Deepika Padukone are making more money from the products they sell, be it apparel, makeup, gin, or sports drinks, than from their original careers. Evolving from endorsers, and cocreators to investors and owners, their entrepreneurial flair is dominating the market like never before.
It all started with Michael Jackson, who was one of the first celebs who venture into the entrepreneurship world through fashion in the 1980s, capitalizing on his immense popularity to launch a line of clothing and accessories, as a broader strategy to expand his brand beyond music.
The realm of celebrity influence has dramatically altered over the past 2 decades. Not that endorsements have fizzled out, they’re all-pervasive. It’s just that a notable trend emerged in the early 2000s as celebrities began launching their brands, and now becoming more magnified. This shift was largely influenced by a desire for greater control over their public image and financial future, coupled with the rise of social media, which provided a direct line to fans.
Why Celebrity-Backed Products Are Flying Off the Shelves?
Celebrity brands are hitting the spotlight, not just because stars love the limelight but because they bring a whole audience with them. And being the brand themselves, they garner just the right attention.
It all started with the rise of the creator economy and influencer marketing that has acutely changed the way consumers interact with celebrities. Today’s savvy consumers seek authenticity, personal touch and profound resonance, and since they connect a lot with their favourite celebs, their say becomes trusted voices, offering digital intimacy and recommendations that feel more authentic than traditional endorsements.
Influencer marketing goes together with the disruptors, “social media and the digital age” which have altered our connection with celebrities. Remember when catching celeb news meant flipping through magazines? Now, celebrities share their lives directly with fans, fostering a sense of familiarity and trust. When a star backs a product, it feels more like a recommendation from a friend and less like a paid ad. Brands like Yeezy thrive not just on their products but on the genuine connection Kenya West shares with its audience. This direct line of communication strengthens the bond between celebrities and their audience, making their brand endorsements more powerful.
With traditional marketing taking a backseat, celebs now launch brands directly to their fans through social media, bypassing middlemen, cutting costs, and boosting reach overnight.
Moving on, celebrities have a built-in advantage over traditional brands in marketing. While regular brands spend heavily on endorsements and paid marketing, celebrities can use their social media platforms to reach millions at no extra cost. This reduces marketing expenses and enhances their ability to connect with consumers directly.
For instance, Rihanna’s Fenty Beauty leveraged her massive online presence to become a global sensation, achieving $100 million in sales within its first 40 days.
Stars and Brands in Strategic Sync
How do celebrities manage it all? Between film shoots and red carpets, they're also masterminding their own brands with a hands-on approach that defies the clock!
Well, when celebrities venture into the business world, they often team up with established brands to leverage their market expertise and fuse up their growth avenues. These partnerships are more than just endorsements; they're strategic collaborations that merge celebrity influence with industry know-how.
Take Virat Kohli’s collaboration with Puma for his One8 range or Katrina Kaif's alliance with Nykaa for her beauty line, Kay Beauty. This co-branding isn’t just business ventures; they're co-created successes that blend the celebrity's unique appeal with the operational might of established brands. Despite Virat Kohli's supreme presence in the sports world, he needed Puma's expertise to bring One8 to life.
Licensing deals, where companies grant rights to their intellectual property for a fee, are strategic power moves. Michael Jordan's 1984 licensing deal with Nike didn't just create Air Jordans; it ignited a revolution in sportswear and marketing, turning sneakers into cultural icons. The legendary partnership between both not only skyrocketed Jordan's brand but also propelled Nike to become a powerhouse in the global sports market.
Rare Beauty by Selena Gomez stands out with its wide-ranging product line, emphasizing inclusivity, self-acceptance, and mental health. This approach has garnered immense success, proving that a genuine connection with consumers is a winning strategy.
Joint ventures can be industry disruptors, as seen with Kanye West and Adidas. Their Yeezy collaboration fuses bold creativity with sportswear innovation, setting new trends and securing a dominant market presence.
Equity partnerships, where stakeholders invest in a business, can catalyze significant growth. Shilpa Shetty's investment in Mamaearth illustrates this strategy, combining her star power with the brand's values to enhance credibility, widen its audience, and drive market success.
These partnerships exemplify how even the most influential personalities benefit from aligning with seasoned brands to ensure product quality, distribution efficiency, and market penetration. It’s a win-win, combining celebrity influence with corporate expertise for maximum impact.
So, when we see a celebrity launching, endorsing, or investing in a new product, it's important to recognize the strategic partnerships behind them that make these ventures more than just a flash in the pan, but a serious expansion into new business territories.
How Star Power Is Disrupting Traditional Advertising and Consumer Brand Dynamics
In today’s fast-paced world, trust, and a good story sell, and no one tells a story quite like someone you’ve always admired from afar. The direct connection of celebrities with consumers has revamped the conventional advertising models, retail strategies and consumer goods industries in several ways.
Firstly, the elimination of intermediaries means that celebrities and influencers can control their brand narratives more tightly. They craft authentic, personalized messages that resonate deeply with their followers. This authenticity builds trust and loyalty, which are more challenging to achieve through traditional advertising methods.
Secondly, the rise of direct-to-consumer (DTC) models has allowed for more agile and responsive marketing strategies, and markets and sells products directly to their audience, bypassing traditional retail channels and hefty costs. These celebrities can quickly adapt their messaging based on real-time feedback, ensuring their products stay relevant and appealing, giving them a competitive edge.
Thirdly, the cost-efficiency of social media marketing has reshaped advertising budgets. Celebrities and influencers leverage their existing platforms, significantly reducing marketing expenses. This cost-saving allows for greater investment in product development and innovation, enhancing the overall consumer experience.
The direct connection fosters a sense of community and engagement. This interaction enhances customer satisfaction and drives word-of-mouth marketing, further boosting sales and brand loyalty.
For instance, with the launch of Selena Gomez’s Rare Beauty, traditional giants like L'Oréal have faced significant competition. Her craze is real worldwide. And with the OG herself partnering with influencers from across the globe, and occasionally sharing makeup tutorials on Instagram has turbocharged the impact of her brand… quite literally disrupting the beauty industry.
The Follower Paradox: Does More Mean More?
The intimate relationship between celebrities and their followers reigns supreme. It’s not just about having millions of followers but about fostering genuine engagement. Something like, “Oh that’s my #1 celeb, and I am all in for whatever they recommend”. No second thoughts. A celeb might have a pool of followers but still not deliver quality content, and then there’s one whose followers are relatively fewer but what they deliver is unmatched, just like Scarlett Johansson’s Beauty Brand, Outset, with her highly engaged audience, valuing her content.
Tools now allow us to measure this engagement through metrics like comments, likes, and shares, revealing the true depth of a celebrity’s influence. Remember, successful influencers aren't just popular; they inspire actions and reactions from their audience.
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