IDEAS home Printed from https://ideas.repec.org/a/ibn/ijmsjn/v9y2017i2p68-77.html
   My bibliography  Save this article

How Much Should Managers Pay for Celebrity Endorsements?

Author

Listed:
  • Han-Kuang Tien

Abstract

Firms that choose to include celebrity endorsements in their advertisements are required to pay large sums in advance for these appearances, even though there is no guarantee of future sales of the target product. As such, managers require a method to evaluate the monetary value of including celebrity endorsements in advertising. In this study employing two experimental designs, we provide a rigorous and predictable framework to measure the potential marginal contribution of celebrity endorsements, which can serve as an objective standard for managers when calculating celebrity appearance budgets. Implications for researchers and practitioners are also discussed.

Suggested Citation

  • Han-Kuang Tien, 2017. "How Much Should Managers Pay for Celebrity Endorsements?," International Journal of Marketing Studies, Canadian Center of Science and Education, vol. 9(2), pages 68-77, April.
    • Handle: RePEc:ibn:ijmsjn:v:9:y:2017:i:2:p:68-77
    as

    Download full text from publisher

    File URL: http://www.ccsenet.org/journal/index.php/ijms/article/view/64835/36231
    Download Restriction: no
    File URL: http://www.ccsenet.org/journal/index.php/ijms/article/view/64835
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David B. Whitlark & Scott M. Smith, 2007. "Sales Forecasting with Conjoint Analysis by Addressing Its Key Assumptions with Sequential Game Theory and Macro-Flow Modeling," Springer Books, in: Anders Gustafsson & Andreas Herrmann & Frank Huber (ed.), Conjoint Measurement, edition 0, chapter 18, pages 363-370, Springer.
    2. Zhou, Lianxi & Whitla, Paul, 2013. "How negative celebrity publicity influences consumer attitudes: The mediating role of moral reputation," Journal of Business Research, Elsevier, vol. 66(8), pages 1013-1020.
    3. Patzer, Gordon L., 1983. "Source credibility as a function of communicator physical attractiveness," Journal of Business Research, Elsevier, vol. 11(2), pages 229-241, June.
    4. McCracken, Grant, 1989. "Who Is the Celebrity Endorser? Cultural Foundations of the Endorsement Process," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(3), pages 310-321, December.
    5. Philip J. Kitchen, 2010. "Integrated Brand Marketing and Measuring Returns," Palgrave Macmillan Books, in: Philip J. Kitchen (ed.), Integrated Brand Marketing and Measuring Returns, chapter 1, pages 1-8, Palgrave Macmillan.
    6. John D. C. Little, 1966. "A Model of Adaptive Control of Promotional Spending," Operations Research, INFORMS, vol. 14(6), pages 1075-1097, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Irene Roozen & Christel Claeys, 2010. "The Relative Effectiveness of Celebrity Endorsement for Print Advertisement," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(1), pages 76-89.
    2. Albert, Noël & Ambroise, Laure & Valette-Florence, Pierre, 2017. "Consumer, brand, celebrity: Which congruency produces effective celebrity endorsements?," Journal of Business Research, Elsevier, vol. 81(C), pages 96-106.
    3. Corina Pelau & Puiu Nistoreanu & Laura Lazar & Ruxandra Badescu, 2022. "Celebrity vs. Product: A Neuroscientific Approach to the Distractors in Food Advertising for Sustainable Marketing," Sustainability, MDPI, vol. 14(19), pages 1-15, October.
    4. In-Hye Kang & Taehoon Park, 2022. "Cultural Differences in Consumer Responses to Celebrities Acting Immorally: A Comparison of the United States and South Korea," Journal of Business Ethics, Springer, vol. 180(1), pages 373-389, September.
    5. Yogesh Upadhyay & S. K. Singh, 2010. "When Sports Celebrity Doesn'T Perfrom: How Consumers React to Celebrity Endorsement?," Vision, , vol. 14(1-2), pages 67-78, January.
    6. Lin Fang & Yanqing Jiang, 2015. "Persuasiveness of celebrity endorsed advertising and a new model for celebrity endorser selection," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 5(8), pages 153-173, August.
    7. Felix Martin & Fu Tao-Peng, 2017. "Morality matters? Consumer identification with celebrity endorsers in China," Asian Business & Management, Palgrave Macmillan, vol. 16(4), pages 272-289, December.
    8. Aysegul ERMEC SERTOGLU & Ozlem CATLI & Sezer KORKMAZ, 2014. "Examining the Effect of Endorser Credibility on the Consumers' Buying Intentions: An Empirical Study in Turkey," International Review of Management and Marketing, Econjournals, vol. 4(1), pages 66-77.
    9. Lazăr Laura, 2020. "Gender Influence on the Perception of Celebrity Endorsement," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 30(2), pages 13-23, June.
    10. Halder, Deepa & Pradhan, Debasis & Roy Chaudhuri, Himadri, 2021. "Forty-five years of celebrity credibility and endorsement literature: Review and learnings," Journal of Business Research, Elsevier, vol. 125(C), pages 397-415.
    11. Opris Adriana & Pelau Corina & Lazar Laura, 2020. "The role of celebrities for the image of endorsed products," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 14(1), pages 838-846, July.
    12. Salman Majeed & Changbao Lu & Muhammad Usman, 2017. "Want to make me emotional? The influence of emotional advertisements on women’s consumption behavior," Frontiers of Business Research in China, Springer, vol. 11(1), pages 1-25, December.
    13. Daniela Andreini & Diego Rinallo & Giuseppe Pedeliento & Mara Bergamaschi, 2017. "Brands and Religion in the Secularized Marketplace and Workplace: Insights from the Case of an Italian Hospital Renamed After a Roman Catholic Pope," Journal of Business Ethics, Springer, vol. 141(3), pages 529-550, March.
    14. Ramendra Pratap Singh & Neelotpaul Banerjee, 2018. "Exploring the Influence of Celebrity Credibility on Brand Attitude, Advertisement Attitude and Purchase Intention," Global Business Review, International Management Institute, vol. 19(6), pages 1622-1639, December.
    15. Ki, Chung-Wha (Chloe) & Cuevas, Leslie M. & Chong, Sze Man & Lim, Heejin, 2020. "Influencer marketing: Social media influencers as human brands attaching to followers and yielding positive marketing results by fulfilling needs," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    16. Ilicic, Jasmina & Webster, Cynthia M., 2011. "Effects of multiple endorsements and consumer–celebrity attachment on attitude and purchase intention," Australasian marketing journal, Elsevier, vol. 19(4), pages 230-237.
    17. Souheila Kaabachi & Mohamed Karim Kefi & Monyédodo Régis Kpossa & Ahmed Anis Charfi, 2021. "Celebrity Endorsement vs Influencer Endorsement for Financial Brands: What does Gen-Z think?," Post-Print hal-03767446, HAL.
    18. . Abhishek & Arvind Sahay, 2013. "Role of Culture in Celebrity Endorsement: Brand Endorsement by Celebrities in Indian Context-A Review, Synthesis and Research Propositions," Working Papers id:5432, eSocialSciences.
    19. Pham Minh & Dang Thao Yen & Ngo Thi Huong Quynh & Hoang Thi Hong Yen & Tran Thi Thanh Nga & Nguyen Van Quoc, 2021. "Assessment of influencer’s effects on customers’ online purchasing behavior in Vietnam," HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE - ECONOMICS AND BUSINESS ADMINISTRATION, HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE, HO CHI MINH CITY OPEN UNIVERSITY, vol. 11(2), pages 81-96.
    20. Reema Nofal & Pelin Bayram & Okechukwu Lawrence Emeagwali & Lu’ay Al-Mu’ani, 2022. "The Effect of eWOM Source on Purchase Intention: The Moderation Role of Weak-Tie eWOM," Sustainability, MDPI, vol. 14(16), pages 1-20, August.

    More about this item

    Keywords

    celebrity endorser; celebrity premium; print advertising; conjoint analysis;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibn:ijmsjn:v:9:y:2017:i:2:p:68-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.