Firms' Strategic Leverage of Unplanned Exposure and Planned Advertising: An Analysis in the Context of Celebrity Endorsements

Abstract

Using data on advertising and sales of an innovative piece of golf equipment and the performance of its celebrity endorsers, the authors build a discrete-choice model that incorporates consumer awareness and preferences. They empirically investigate how celebrity endorsements affect consumer choices during new product introductions, the roles of planned advertising and unplanned media exposure, and how firms can strategically leverage the unplanned component. Model estimates reveal that wins in professional golf tournaments (which proxy for unplanned television exposure during weekly golf tournaments) affect awareness and that paid planned advertising impacts awareness and preferences. Focusing on Titleist equipment, counterfactual analysis demonstrates that the unplanned media exposure and planned advertising account for 22% and 24% of sales, respectively. The results also suggest that firms would benefit from coordinating the two. The planned portion should serve as a substitute for unplanned media exposure in the early stage and a complement as products age.

When celebrity endorsements collide with social activism: exploring athlete celebrity endorsements, social issues and brand perception

“…It is important to note that perceptions of credibility play a larger role in attitude and behavior change than a speakers' actual expertise (Lee and Thorson, 2008). Specifically with sport celebrities, there is an uncontrolled element tied to athlete performance (Derdenger et al, 2018). When an athlete or team does well, the brands they are linked to see the benefits (Chung, 2013;Derdenger et al, 2018).…”

“…Specifically with sport celebrities, there is an uncontrolled element tied to athlete performance (Derdenger et al, 2018). When an athlete or team does well, the brands they are linked to see the benefits (Chung, 2013;Derdenger et al, 2018). Derdenger et al (2018) suggest a link between athlete endorsement and a consumer's consideration set.…”

“…When an athlete or team does well, the brands they are linked to see the benefits (Chung, 2013;Derdenger et al, 2018). Derdenger et al (2018) suggest a link between athlete endorsement and a consumer's consideration set. For example, if a golfer, the subject of their study, performs well with a particular set of golf clubs, the consumer may add that as a factor when making a golf club purchase.…”

“…When an athlete or team does well, the brands they are linked to see the benefits (Chung, 2013; Derdenger et al ., 2018). Derdenger et al . (2018) suggest a link between athlete endorsement and a consumer's consideration set.…”

“…-LeBron James Companies such as Nike annually spend hundreds of millions of dollars on celebrity endorsements (Sager, 2011). It is no longer newsworthy when athletes sign multi-million-dollar endorsement contracts with companies (Derdenger et al, 2018). Celebrity endorsements can benefit the brand through awareness and brand recognition (Erdogan, 1999), but as social causes and social statements are increasingly present in the media and advertisements understanding the impact other statements made by celebrity endorsers have on the brands they are affiliated with is particularly important.…”