Sept 2019 (Vol. 59, Issue 3): NEUROMARKETING
The Relative Effectiveness of Endorsers: The Identity Badge of CEOs and Founders versus the Attractiveness of Celebrities
Ads with chief executive officers and company founders are a “fast-growing brand-endorsement tactic,” according to Arpita Agnihotri (Penn State Harrisburg) and Saurabh Bhattacharya (Newcastle University Business School). “Recent studies also indicate that CEOs as business leaders influence consumers’ purchase intention,” they note.
Although there is a wealth of knowledge on the risks and rewards of using a celebrity spokesperson to endorse a company, the few studies comparing the use of celebrities and chief executive officers as spokespersons have mixed results. The authors observed another research gap: no empirical research comparing endorsement by CEOs with founders.
Agnihotri’s and Bhattacharya’s research used print ads for a fictitious coffee drink being launched at the sandwich chain, Pret A Manger, and the study was replicated for a hotel-and-pub company in the U.K. Their work
- “Indicates that when the identity of CEOs and founders is signaled through their identity badge (i.e. their title and designation), consumers find an advertisement more effective (in terms of their attitude toward the brand) than an advertisement with celebrities.”
- Moreover, the authors found that ads with founders as endorsers were “more effective for new products, whereas CEOs as endorsers were more effective for existing products.”
- The findings are applicable specifically to small and mid-sized companies, for which celebrity endorsement is very expensive.
The thinking behind the second part of the research—comparing the effectiveness of CEO versus founder endorsement—is grounded in what is referred to as the “match-up hypothesis,” whereby the “effectiveness of an endorser depends on his or her fit with a product or service,” the authors note, citing earlier research. “Because this fit is based on external attributes, not internal attributes, of the spokesperson, stereotyping rather than credibility explains the differences in advertising effectiveness. Sports celebrities are a better fit for sports products, for instance, and female celebrities are a better fit for cosmetic products.”
CEOs and founders have no difference in credibility but do have differences in product association and skill sets; founders typically are associated with new products, whereas CEOs (selected externally) are viewed as being more adept at sustaining growth of existing products through brand-management strategies and as having other leadership and organizational skills.
There were a few limitations to this study, including that the ads were fictitious, “and the effectiveness of actual advertisements may vary.” Future research could
- “Explore how the achievements of CEOs and celebrities could influence the success of their brand endorsements. (In the service industry, the effectiveness of animated characters as endorsers has been established well, but in this study, the authors did not control for such effect.)
- “Explore the impact of spokespersons on frequently used consumer-behavior constructs, such as attitude toward the brand and purchase intention, using structural equation models, because (according to extant research) advertisement attitude itself could influence purchase intention.
- “Be conducted across a variety of products and services.”