Celebrity Endorsements

ISB’s Manish Gangwar explains how cultural factors enhance celebrity credibility and why they should be held accountable for the products they promote.

From fairness creams to financial services, celebrities in India routinely lend their star power to brands. Their influence is undeniable; millions of fans trust their endorsements, often without question. But should they also share responsibility when the product or endorsement runs into troubled waters? A parliamentary panel thinks so; recommending that celebrities be held accountable for misleading advertisements.

Manish Gangwar, Assistant Professor of Marketing at the Indian School of Business, explains how cultural factors shape consumer trust in celebrity endorsements and why emerging markets should rethink accountability.

Why is celebrity accountability important?

Countries like India, China and Korea are characterised by ‘high power distance’, which indicates the degree of inequality of power and wealth in a society. My research shows that power distance influences how consumers perceive celebrity endorsements as credible and trustworthy. As celebrities’ influencing power is high in countries like India, they should be concerned about the products they advertise and take accountability for deficiencies in the quality of products.

Celebrity endorsement appear more popular in emerging markets than in developed ones. Why?

Consumers idolise celebrities in emerging markets. Consumers tend to identify themselves with celebrities and try to imitate them. The perceived credibility of celebrities is also high in emerging markets.

Is the effectiveness of celebrity endorsements consistent across cultures and regions? Your research mentions the concept of 'power distance'. How does it affect the effectiveness and popularity of celebrity endorsements?

The effectiveness of the celebrity endorsement varies across different cultures and regions. My research shows that power distance is lower in countries like the USA and higher in countries like India and China. People in countries with ‘high power distance’ tend to accept inequality and authority. They listen to and respect authoritative persons like celebrities, attributing credibility to them. Celebrity endorsements are more effective in countries with high power distances than those with ‘low power distances.’

How much does attractiveness influence the acceptance of celebrity endorsement?

Attractiveness pertains to the familiarity and likability of the celebrity. The attractiveness of celebrities impacts the effectiveness of advertising from an emotional, rather than rational standpoint. As most celebrities in advertisements meet a minimum threshold of attractiveness, it was assumed as a constant factor in this research.

What are the implications for advertisers? How should they approach celebrity endorsers?

Advertisers need to consider variations in the cultural factors across countries while selecting celebrity endorsers and should take a ‘horses for courses’ approach, which means choosing endorsers who are the best fit for each market. In emerging markets (usually associated with high power distance), celebrity endorsers should be used to increase advertisement effectiveness.

In countries with high power distance, advertisers need not worry too much about the actual credibility of celebrity endorsers as the high-power distance increases their perceived credibility. Our research shows that consumers in low power distance countries do not attribute greater credibility to celebrity endorsers versus non-celebrity spokespersons. Source credibility may be critical while using celebrity endorsements in low power distance cultures.

Disclaimer: This article was first published in ISB Insight on June 1, 2016.

Author: ISB Editorial Team