The risks and rewards of celebrity endorsements for the drinks industry

For centuries celebrities and royalty have been used in promotional opportunities to endorse wine and spirits brands.  The drinks industry as a whole is no stranger to spending millions to get celebrities to talk about and publicly consume their brands. But, in today’s world of accountable marketing and measurability, isn’t it risky to splash out when there is no guarantee it will work?  Does it really increase sales or is it just a branding exercise for those that can still afford it?

In November 2012, Moët & Chandon announced a five year endorsement deal with tennis star Roger Federer, replacing Scarlett Johansen as the face of the brand.  It is apparently worth $30 million.  Time will tell whether Moët will make their money back and the types of consumers Federer can bring in.

Champagne Charlie Marketing

Moët & Chandon is no stranger to endorsements.  In 1866 the company commissioned the entertainer George Leybourne to write and perform songs such as “Champagne Charlie” about the virtues of champagne. Dozens of songs were commissioned by champagne houses at the time including “”Ruinart-Polka” and the “Charles Heidsieck Waltz”. Champagne houses also marketed their wines through music, art, literature and movies at that time succeeded in positioning champagne as a mandatory presence at all celebrations, inaugurations and launches. It’s an approach that is still used today.  It’s maybe why we drink champagne only for celebrations, unlike in French culture where it doesn’t need to be a celebration to crack open a bottle.

PFR@PDI@P01@AfficheGoldeney.jpgMarketing techniques for champagne proved very successful with movies and movie stars in particular.  One of the more famous associations for a champagne brand was for both Dom Pérignon and Bollinger in the James Bond series.  Dom Pérignon was featured in several James Bond films starting in 1963.  By 1973 Bond’s the brand of choice switched to Bollinger.  Bollinger has since been featured in at least 12 of the films.

Celebrities then and now provide fine wines, champagne and spirits brands with a way to position their products as glamorous, aspirational and part of a luxury lifestyle.

diddy_ciroc_ad_600-copy-e1358980180700Today we see both the wine, spirits, and drinks industry in general hard at work on endorsement deals. The most successful, and accountable recent celebrity endorsement example is Cîroc vodka.  In 2007, Diageo approached hip hop mogul Sean “P Diddy” Combs  to not only endorse their brand, but appointed Diddy “head of marketing” and gave him 50% of profits.  Through advertising and appearances the brand went from 40,000 cases to 2 million cases a year in six years.  According to Advertising Age sales for the vodka grew 552% since the pre-Diddy days.

Diageo’s Tanqueray brand also succeeded with the same strategy when they approached actor and DJ Idris Elba for a music video for the campaign “Tonight we Tanqueray” in 2011.

Bethenny Frankel Skinnygirl wineReality stars can do it too.  Like her or hate her, Bethenny Frankel’s Skinnygirl brand has taken off. Bethenny was a member of the original Real Wives of New York City TV series.  Bethenny sold the Skinnygirl brand to Beam, Inc. in 2011 and in 2012 they launched Skinnygirl wine. Beam says that sales of Skinnygirl cocktails soared to 486% in 2011, so no doubt is pinning high hopes for the wines.

Sometimes wineries will work with a celebrity for a special wine or particular vintage.  The star may have no ownership in the brand or involvement in the industry. In 2005 the California sparkling wine producer Mumm Napa worked with Carlos Santana to name their vintage wine of the same year Santana DVX.  Fattoria Le Terrazze, a winery in Italy worked with Bob Dylan to do the same thing.  In Bordeaux, Château Bauduc approached British chef Gordon Ramsay in 2009 for an endorsement of their 10th vintage.

Dozens of celebrities are on the wine bandwagon already promoting their own labels.  Recent additions to the wine world include Drew Barrymore, Angelina Jolie & Brad Pitt, Fergie and David and Victoria Beckham.  All are banking on their celebrity to promote the wines, in the already cluttered and fragmented wine industry.

What happens when celebrities screw up?  There have also been dozens of endorsements that have turned sour.  In 2010 Rap star T.I, was paid to endorse Rémy Martin cognac and axed five months later after being arrested for drug possession.  Even when the star is dropped by the brand the press articles live on.

In the biggest drinks sponsorship of its time, Michael Jackson was dropped by Pepsi in 1993 when he was accused of child molestation and confessed his addiction to painkillers.  Britney Spears was also “phased out” by Pepsi in 2003 when her $9 million deal was dropped after she was spotted numerous times with Coca-cola products, despite being given unlimited Pepsi products.  In other PR disasters, Tiger Woods was dropped by PepsiCo’s Gatorade in 2009, during the media frenzy around his extramarital affairs.

Jay Z and P Diddy with ChampagneBut celebrities are not always paid to endorse brands.  Sometimes it is unplanned and unwelcome by the brand.

Rappers like Notorious B.I.G., Bad Boy and Jay Z have mentioned the champagne brand name Cristal numerous times.  It was Jay Z’s mention of the brand in his music video “Excuse me Miss” that sent the brand name soaring and did not please Cristal owner Louis Roederer.  In 2006, after a comment made by Roederer Managing Director that Jay Z deemed racist, he boycotted the brand and switched to Armand de Brigna, another champagne brand in flashy gold colored bottle which was featured in his “Show me what you got” music video in 2009.  This time the brand was more than pleased and said they completely sold out and could have sold their volume of production several times.  In the case of Cristal, they didn’t need or want the exposure, their brand is scarce enough to find anyway, but it shows what can happen by surprise, opening up knowledge of the brand to a whole new audience, whether intended, desired or not.

The same thing happened for Courvoisier when rapper Busta Rhymes (and featuring P Diddy) released a song called “Pass the Courvoisier”.  The cognac brand saw sales rise 30% in 2002 – which was reportedly the biggest sales boost since Napoleon Bonaparte named it as the official supplier to the Imperial Court of France.  Courvoisier claims it had no agreement with the artist prior to the release of the song, although worked with the rapper afterward.  There is no proof either that Courvoisier was Napoleon’s favorite cognac, as he died before the company launched in 1835.  But this association has proved to be a successful marketing tool.

kim_kardashian_midori-ad-1But what happens when the brand chooses a spokesperson that reportedly doesn’t even drink alcohol? Midori chose brand mogul Kim Kardashian as a spokesperson in 2011.  Kim’s role is to appear in advertisments, give personal appearances and tweet.  Kim has been riddled with endorsement nightmares including Sketchers toning shoes, QuickTrim diet and the TRIA hair removal system.  I can’t help but wonder if Midori’s sales will be helped or hindered by this choice.

So what are brands looking for when they sign on these celebrities?  Here are several reasons:

– Influence consumer purchases: Like it or not, the publicity celebrities attain dominate popular culture, and news travels fast through their sphere of followers on social media.

– Build awareness: They can be great for new brands or those looking for mass exposure.  i.e: Madonna, Michael Jackson, Britney and Beyonce for Pepsi.

– Position the brand: For style and sophistication champagne brands have long used movie stars ie: James Bond for Bollinger, Scarlett Johansen for Moët.

– Attract new consumers: Many spirits and drinks brands find stars that will help them tap into the teen audience, kids drinks, black teens and the Hispanic market.

– Breathe life into a failing brand: Create new excitement and desirability.

– Target a specific fanbase: i.e: Sprite using athletes such as Kobe Bryant.

Brands should carefully consider their demographic and who already consumes their brand, or could be convinced to.  The person has to have credibility and it has to be or at least seem authentic.  Do they actually consume this?  Clearly, Britney in the case of Pepsi and Kim Kardashian, in the case of Midori are not great choices.  In the best case scenario, the person should become part of the company, as P Diddy did in the case of Cîroc.  The most successful endorsements show the celebrity’s involvement going deeper than just appearances.  Celebrity endorsements can be effective if they are well thought through and are viewed as a long term strategic decision.  Given today’s heavy reliance on social media, perhaps the celebrity endorsement isn’t as important as it once was, because according to Ad Age and Nielsen, today’s consumer is more likely to be influenced by someone in their social network than a weak celebrity connection.

Time will tell with new endorsements like the Moët and Federer deal. What do you think?  Are celebrity endorsements still worthwhile?  Or should the drinks industry be more creative with social strategies?