Celebrity endorsement vs. influencer marketing has been the most common argument in the marketing industry. Brands collaborating with celebrities to promote their brands or products are not new. For decades, celebrity endorsement was at the prime of marketing strategy. Likewise, in Thailand, as the country’s industrial and commercial market grows, having a strategic alliance with celebrities has become a popular marketing tool.
However, since social media came into existence there has been a whole mechanism and ideology transition in the global marketing industry. Along with the significant growth of social media, influencer marketing has become a must-have marketing strategy for businesses. In fact, many brands have been switching to influencer marketing and have been generating greater ROIs compared to other forms of advertising.
Celebrity endorsement is still considered as a critical advertising strategy. However, its dominant market position is shared by influencer marketing today. These two marketing strategies serve different purposes. Therefore, brands should be aware of each strategy’s strengths and weaknesses. This article will delve into each marketing strategy’s pros and cons, and guide you to make smarter marketing decisions.
Celebrity Endorsement
Celebrity endorsement also known as Celebrity Branding is a form of advertising that utilizes famous people like celebrities as brand representatives. Brands assess the popularity or social status of celebrities to promote their products, services, or raise brand awareness. These celebrities are usually well-known people from a range of fields such as entertainment, sport, and politics. They often act as the brand’s spokesperson or ambassador, and represent the brand’s image.
Many brands in the world have been using this marketing strategy for decades. For example, Ryan Gosling, a famous Canadian actor is the new ambassador for Gucci – a luxury fashion brand. Chanel’s most iconic perfume No.5 has been promoted by a number of celebrities including Brad Pitt, Nicole Kidman, and Audrey Tautou. Similarly, celebrities commonly appear in Thai advertisements. Many businesses in Thailand collaborate with famous Thai celebrities like Nadech Kugimiya and Yaya Urassaya. A lot of different brands, products, and services are also endorsed by many other Thai celebrities.
The Effect of Celebrities in Advertisements
The power of celebrity is massive in advertisements. Just having a celebrity appear in a marketing campaign can significantly impact a brand’s sales. Based on a recent study, just one celebrity endorsement can lead to an immediate increase in sales by 4%. Celebrity endorsement certifies the brand’s reputation, credibility, and position by extending his/her fame and popularity to the brand.
Attractiveness of the Celebrity
The biggest advantage of celebrity endorsement is the attractiveness factor of the celebrity. He/she enables instant brand awareness and helps brands to attain a huge customer reach. Celebrities significantly increase brand recognition and boost brand profits. The celebrity’s value attracts customers and energizes a brand’s image. Customers often remember the brand by the name of the celebrities who endorse the brand. Hence, celebrity endorsement helps customers remember the marketing campaign for a long time. Also, customers often have the same positive image on the brand as they have on celebrities.
Credibility of the Celebrity
Celebrity endorsement effectively builds credibility. Credibility is an important factor for brands to maintain a positive image on customers, and make marketing campaigns more persuasive. Based on his/her social status and fame, a brand or product endorsed by a celebrity appears more trustworthy and authentic. A celebrity’s credibility significantly influences customers’ purchase intentions and decisions. Moreover, the more credible and trustworthy image a celebrity gives, the greater the influence on customers’ feelings and attitudes toward the advertisement. Ultimately, these positive feelings toward advertisement leads to positive purchase intentions and generate greater ROI for brands.
The Downsides of Celebrity Endorsement
One of the biggest drawbacks of celebrity endorsement is the cost. Getting a celebrity endorsement typically requires a large amount of money. Especially, having a well-known celebrity endorse a brand or a product can be enormously expensive. According to Bangkok Post, an average of 3-5 million baht is paid to Thai celebrities for one TV commercial advertisement. In addition, their brief appearance at a product promotion event costs up to 350,000 baht. For small and new businesses, the cost of celebrity endorsement is a very prominent question. SME’s are often unable to afford this amount of money to promote their brands or products using celebrities’ popularity.
Also, celebrities might sometimes overshadow your brand or product. It usually happens when a celebrity is too famous. If the marketing campaign and advertisement focuses too much on the celebrity, it may instantly overshadow your brand. It can obstruct brand recognition in the minds of customers., Hence, it can become a problematic issue.
Influencer Marketing
This is a more recent concept compared to celebrity endorsement. Influencer marketing is a type of marketing campaign that utilizes social media influencers. These are social media leaders, and experts in their field of activities. They influence audiences and consumers by creating and sharing contents using their knowledge, experience, and reviews. In recent years, influencer marketing proved its impact on the marketing industry.
Globally, social media usage is constantly showing an upward trend. In Thailand, more than 70% of the total population currently use social media. More than half of Thailand’s teenage population often trust influencers over celebrities. Therefore, in some aspects, influencer marketing is currently a preferred marketing strategy to use among marketers than celebrity endorsement.
The Effect of Influencer Marketing in ADVERTISING
Reaching Relevant Target Audience
Celebrity endorsement can help brands attain huge customer reach. However, influencer marketing helps brands to reach more relevant demographic. There are influencers for every product and service group. These influencers are mostly followed based on their knowledge, passion, ideas, and insights on certain fields. Their followers often have similar interests and consider the influencers as experts in their field.
For brands, collaborating with the right influencers enables them to reach their followers which are the brands’ target customer group. It offers brands a higher chance to attract relevant customers since influencers’ recommendations have a considerable influence on their followers. Influencers’ recommendations make marketing campaigns sound less like advertisements and make people more open to those brands and products.
Cost-effectiveness
For influencer marketing campaigns, there is no need for big budgets. When working with celebrities, brands often worry about its eye-watering costs. However, with influencer marketing, brands can drive target customers’ purchase decisions and increase sales while keeping marketing costs down.
In comparison with celebrity endorsement, running marketing campaigns through influencers is relatively cost-effective and reasonable. This is due to influencers’ advanced content production skills. Nowadays, many influencers largely replace the role of the model and photographers for marketing campaigns, as they create their own content. Influencers tend to include all production and distribution costs within their fees. However, it is still substantially lower than the cost of celebrity endorsement.
Moreover, brands can choose to work with different tiers of influencers, depending on their budgets. In order to save more costs, brands often work with lower-tier influencers such as Micro or Nano-influencers. Lower-tier influencers cost less than top-tier influencers. Nevertheless, they all maintain a strong relationship with their followers.
High Engagement Rate
Engagement rates tell how actively consumers engage with a piece of content. High engagement rate often correlates with high ROI for businesses. Influencer marketing is specialized to boost a marketing campaign’s engagement rate, since influencers have closer connections with their followers compared to celebrities.
Influencers’ brand or product promotion posts are shared by large followers. Audiences engage with the marketing content by sharing, liking, and commenting on the post. Such communication between influencers and followers connects brands to their target audiences. While celebrity endorsement focuses on reaching millions of people, influencer marketing enables their followers to be more engaged with brands’ marketing campaigns. Ultimately, influencer marketing allows brands to interact with influencers’ followers and efficiently convert them into potential consumers.
The Limits of Influencer Marketing
Not every influencer marketing campaign brings success to businesses. One of the biggest challenges in influencer marketing is to find the right influencers. It requires some investment and deep market knowledge for brands to identify the right influencers for their marketing campaigns. Based on a recent survey, more than 60% of marketers have faced challenges in finding the right influencers for their marketing campaigns. It is a challenging step because brands should make sure that their marketing campaign is aligned with the ideals of their influencers and their target audience. Therefore, it is important for brands to focus on relevance and know who their target audiences aspire to.
One of the other challenges of influencer marketing is the risk of fake followers and engagement. Influencers generally get paid depending on the number of their followers and engagement rate their account has. Hence, some influencers purchase fake followers, likes, and comments using certain applications. These applications allow influencers to take advantage of applications and monetize it. These influencers can trick businesses to think they have a notable presence on social media than they actually do. These fake followers can also harm brand images and sales. Brands can lose credibility and trustworthiness when collaborating with influencers with fake followers.
Influencer House
In order to conduct a successful influencer marketing campaign, influencer choice must align with your brand’s values and objectives. Influencer House has the expertise to help your brand to create effective influencer marketing campaigns. With our AI Powered Real Time Data Measurement and Anti-Fraud Technology, we offer solutions to maximize your brand impact and protect your campaigns. Our platform houses more than 20,000 influencers and content creators from different categories of interest from all over South East Asia. If you want to know more about the services that Influencer House can provide for your campaign, please visit our website or email us at inquiries@influencerhouse.co.th.