WHO IS THE BEST BRAND AMBASSADOR?

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1 CHINA FOR MORE INFORMATION PLEASE CONTACT: Sirius Wang Director, New Solutions, MillwardBrownACSR Penny Du Analyst Executive, R&D, MillwardBrownACSR WHO IS THE BEST BRAND AMBASSADOR? 2012 China Celebrity Endorsement Report The past decade has seen an explosive growth of celebrity advertising, especially in China where more than half of the advertisements feature celebrities. According to Millward Brown s Link database, about 9 percent of advertisements used celebrities in the year 2000, which rose to a staggering 53 percent in 2011, twice the global average. Celebrities are most frequently used in food and hair care advertisements. In spite of the rapid growth of celebrity advertising, its effectiveness has been decreasing. The 2011 data indicates that celebrity advertisements are not even as effective as advertisements which do not contain celebrities. An analysis based on the Link database finds that, in terms of likability and brand linkage, the two most critical indicators of TV advertising effectiveness, celebrity advertising has fallen by 4 percent and 6 percent, respectively. In fact, only 35 percent of celebrity TV advertisements in 2011 achieved good results, versus 42 percent for non-celebrity advertisements. Of the many factors contributing to the decreased effectiveness of celebrity advertising, the main ones include obsession with celebrity status, failure to use comprehensive celebrity selection criteria, and especially lack of consideration with regard to the match between celebrities and advertised products. To better understand the effectiveness of celebrity endorsement, Millward Brown launched the celebrity equity research project, CelebrityZ in As of the end of 2012, it has surveyed over 100,000 consumers, covering more than 500 celebrities in various fields, making CelebrityZ the largest celebrity equity database in China. This report starts with a summary of common misconceptions about celebrity endorsement and mistake made by brand marketers in choosing celebrity spokespeople, then discusses how to match brands with celebrity personalities through specific CelebrityZ cases, and introduces in detail an optimal celebrity endorsement solution.

2 1 FIVE CAUSES OF REDUCED EFFECTIVENESS OF CELEBRITY ENDORSEMENT As China s consumer market is becoming increasingly sophisticated, the effectiveness of celebrity advertising has been on the decline, as the differentiating effect brought about by celebrities dwindles. On the other hand, brand marketers lack a professional and effective methodology for spokesperson selection. The following are five common factors that lead to the reduced effectiveness of celebrity endorsement: 1. Excessive use of celebrities Many brands have an obsession with celebrities in advertising in hopes that their products can ride on the popularity of the celebrities to rapidly boost their brand s awareness. This explains the frequent appearance of celebrities in advertisements. Statistics show that in last year alone, Leehom Wong and Jay Chou represented more than 20 brands each, and Louis Koo, Jackie Chan and Jolin Tsai endorsed around 15 brands each. An even more prevalent situation is that the celebrities featured steal the spotlight from the brands advertised, so much so that consumers only remember the celebrities without associating the advertised products with them and even associate the celebrities with competitor brands. Therefore, the key to success is how to tie the celebrity to the storyline of brand advertising. 3. Neglect of geographic difference of celebrity popularity There is increasing data underscoring the geographic factor that affects advertising effectiveness. Many brand managers think that this problem can somewhat be solved by using celebrities in advertisements, but the fact is that there is also a considerable geographic difference when it comes to the familiarity with and acceptance of celebrities. An analysis of the nearly 500 celebrities covered by CelebrityZ finds that 94 percent of them have a geographic difference of popularity. Even the hugely popular Yao Chen is no exception. According to the latest data, she ranks in the top 10 percent of the most popular celebrities in Beijing, but her ranking in Shanghai is relatively lower. Figure 1: Geographic difference of celebrity popularity While these celebrities are famous, frequent endorsements give rise to a dilutive effect, with the possible result that consumers only remember the celebrities in advertisements and have little impression of the products and brands being advertised. The dilutive and even confusing effect is even greater when some celebrities represent products of the same or similar types within a short interval of time. 2. Lack of diversity of celebrity advertising patterns An analysis of celebrity advertisements shows a striking, shared pattern where celebrities hold the products advertised and praise their advantages. This simple use of celebrities is another important reason behind the unsatisfactory effect of celebrity advertising. Of 100 celebrity advertisements randomly selected from January 2008 to December 2009, up to 88% are boring and hollow of substance. Brand managers should realize this geographic difference of celebrity popularity. Rather than seeking a celebrity popular nationwide, they should adjust their branding and advertising strategy in the light of this geographic difference by, for example, taking some supportive measures to strengthen the effectiveness of advertising in regions where the featured celebrity is less readily accepted.

3 4. Lack of long-term continuous tracking of celebrities performance The evolution of public image of celebrities has a great impact on the brands they represent. In this digital age when information travels at an extremely fast speed, any shortcoming of celebrities may be found and magnified at any time, and once a celebrity gets embroiled in a scandal, the brands which they present and which are closely associated with their personal image and credibility may face significant risk. There is a need to track consumer attitudes to controversial incidents in which celebrity spokespeople are involved. Although Liu Xiang s exit from London Olympics 2012 was seen in a positive light by the mainstream media, many consumers still showed distrust in him, as seen in Figure 2 by the significant growth of the proportion of consumers regarding him as dishonest in August and September, and as the news event faded away, the proportion gradually deceasing. Figure 2: Change in perception of a dishonest Liu Xiang At present, very few brands are tracking their brand ambassadors over the long run. Most brands lack adequate data to respond in a timely fashion to emergencies and, as a result, are easily impacted. 5. Neglect of match between brands and celebrity personalities Brand personality is at the core of a brand s image. A positive and rich brand personality is often a concentrated expression of the brand s meaningful differentiation. Celebrity spokespeople can help brands strengthen and highlight their existing personalities or build new personalities. Donnie Yen, for example, with his adventurous, rebellious, brave and assertive personality, can help strengthen the brands of similar personalities such as Audi and Budweiser. If there is not adequate match between the brands advertised and their celebrity spokespeople, it will weaken the otherwise clear brand personality. The lack of consistency among celebrity spokespeople of the same brand will also blur the brand s personality.

4 2 HOW TO IDENTIFY THE BEST FIT BETWEEN BRANDS AND THEIR SPOKESPEOPLE In order to identify the best fit between a brand and its spokesperson, it is important to consider brand positioning, the brand ideal, and the goal of celebrity advertising, and to integrate these considerations into the advertisement. Figure 3: Comparison of different brand ambassadors in skincare category 1. Clarification of purpose of celebrity advertising The first step to identifying the best matching point between a brand and its spokesperson is to clarify the purpose of the celebrity advertising and have a deep understanding of the target audience. For new brands with an urgent need to improve their awareness, it is important to use a popular celebrity in the advertisement, but even so, it is still critical to carry out a necessary evaluation of the spokesperson in terms of whether he or she also represents other similar products, his or her trustworthiness, and the fitness of personality between the spokesperson and the brand. For established brands, greater caution should be exercised when it comes to selecting their brand spokespeople. In most cases, brand managers make decisions on the basis of their own understanding, without adequate consideration of the competition environment, acceptability to target consumers, and personality difference of spokespeople themselves. The selection of a brand s spokesperson also requires a full understanding of the target consumers. CelebrityZ finds a remarkable difference in the acceptance of brand spokesperson traits among different groups of people. Celebrities displaying such traits as trustworthiness, assertiveness and responsibility are the most well received among Chinese consumers. In the 15 to 22 age bracket, qualities including healthiness, bravery, rebelliousness and adventurous are well regarded. From this perspective, the research on spokespeople can help brands to identify the values that are accepted and sought after by Chinese consumers today. Figure 4: Traits of the role model for different groups of people Figure 3 shows the competition for spokespeople of skincare products. L'Oreal s selection of its brand spokespeople is very well devised because it chooses female stars of influence both in China and in the world, which not only enhances its awareness but also helps highlight its international, fashionable, independent and confident brand image.

5 2. Match between brands and celebrity personalities For well established brands, the use of celebrities in advertising often helps strengthen, complement, sharpen or enrich their existing brand images. As shown in Figure 5, Red Bull is associated with vigor and adventurousness in China. Using badminton star, Lin Dan in particular, can help further cement this personality of Red Bull, and the other traits of Lin Dan also extend the brand personality of Red Bull to include straightforward, creative, kind and desirable. Table 1: Change in brand personality of Red Bull Change Relative to Norm Rebellious Adventurous Different In control Creative Source: BrandZ database Figure 5: Match between Lin Dan and Red Bull on personalities A comparison and analysis of the brand equity of Red Bull in 2011 and 2012 finds a remarkable improvement in all traits that match those of its brand spokesperson Lin Dan. To achieve a good match between a brand and its celebrity spokesperson, brand managers need to understand whether the celebrity candidate shows the personality that the brand hopes to associate with it, uncover consumers real perceptions of the personality of the brand and the celebrity candidate, and make a comparison between the two. One interesting example is the cooking oil brand Fulinmen. A CelebrityZ analysis shows that Fulinmen has a distinctive brand image known to be kind, friendly and caring. The use of Song Dandan and Jiang Wenli, both with shared traits of personality, as its brand spokespeople can greatly enhance its exiting brand image. Also worthy to note is that Song Dandan has the special trait of being fun and Jiang Wenli, being sexy. This sheds a light on how brand managers can utilize or avoid certain personality traits when selecting its brand spokespeople.

6 3. Clarity and exclusiveness of the spokesperson s personality When selecting celebrities in the light of personality, brand managers should also consider how to achieve greater differentiation from competitors and whether certain traits of the considered spokesperson have been utilized in similar products. In many advertisements featuring Jay Chou, for example, the emphasis is always placed on his being rebellious, creative and playful, which are repeated so often that it is difficult for the consumers to differentiate among the brands advertised. In such a situation, efforts can be made to tap the traits that are not yet well utilized and integrate them in the advertising storyline creatively. The U-Love-It advertisement which also stars Jay Chou but highlights the less exposed caring aspect of Chou s personality is a good attempt in this respect. In the Link test of CelebrityZ, this advertisement performs very well on metrics such as brand linkage and likability. Meanwhile, brand managers should ascertain whether their spokespeople have adequate prominence and clarity in the key traits to be emphasized in their brands. Our analysis of Coca Cola s spokespeople finds that Liu Xiang has not only the traits emphasized by the brand but also a highly recognizable image, in contrast to others who score lower in either key traits (such as Will Pan and Charlene Choi) or personality clarity (such as Leehom Wong and Sun Yang). Similar analyses can help brands design different publicity tactics and advertising ideas in the light of the characteristics of different spokespeople, thus better achieving the goal of brand communication. Figure 6: Comparison of different brand ambassadors in beverage category

7 3 BRAND SPOKESPERSON EVALUATION SYSTEM In order to better help brands select celebrity spokespeople and improve the effectiveness of celebrity advertising, it is necessary to establish a set of measurable criteria for celebrity evaluation and carry out continuous tracking of celebrities. Millward Brown launched the celebrity influence and personality database CelebrityZ in 2011, which covers over 500 celebrities and has surveyed over 100,000 consumers nationwide. Based on the massive pool of data and spokesperson case analyses built up by CelebrityZ, we introduce herein a standard evaluation system centering on the match between brands and their spokespeople to provide spokesperson selection advice for brand managers. This evaluation system assesses potential spokespeople from the following three aspects for the optimum advertising effect: 1. Celebrities endorsement potential Endorsement Potential is the primary indicator used by brand marketers when selecting their spokespeople. Celebrities endorsement potential is mainly concerned with whether they can have adequate influence on the target consumers and serves as a basic reference point for spokesperson selection. Endorsement Potential is a composite of the three indicators of fame score, purchase impact and endorsement status. The fame score takes into account the familiarity, affinity and buzz level. This score helps brand managers determine whether the celebrity considered has an adequate awareness among the target consumers. Purchase impact evaluates the influence of the spokesperson on the willingness of target consumers to buy the advertised product. Our CelebrityZ study finds that the celebrities that have the greatest purchase impact are not necessarily the best known and the most visible stars. One typical example is Rene Liu, who, keeps a low profile and is not frequently seem in the media, yet has a considerable influence on consumers willingness to buy. Our analysis of the consumer group aged between 15 and 22 also shows that even though they have a great familiarity with mid-aged stars like Andy Lau and Jackie Chan, yet when it comes to deciding what to buy, younger stars such as Sun Li and Hu Ge have greater persuasive power. Furthermore, it is also necessary to evaluate the celebrities in terms of their endorsement status to understand whether the celebrity considered has represented so many products that the consumers are getting tired of seeing them, thus helping brand managers make a more informed choice of their spokespeople and avoid repetition with other brands.

8 2. Celebrities personality Celebrity personality is the second parameter of the evaluation system and measures consumers perception of the personal traits of celebrities. It is what differentiates celebrities from each other and can be fully utilized in brand image building. Celebrities personality not only is shown as their image in the public media, but also embodies the values they represent. CelebrityZ uses different dimensions of personality to evaluate celebrities, where traits like fun and playful are used to express the dimension of humor, rebellious and adventurous to express departure from tradition, and trustworthy to express the degree of trust consumers have in the celebrities. In addition, CelebrityZ supports comparison between the celebrity spokesperson considered and other celebrities in the database, especially similar celebrities in the same field, to determine whether the celebrity spokesperson has enough prominence and awareness. A good example is Head & Shoulders, which used multiple celebrity spokespeople, including Leehom Wong, Jolin Tsai and Vivian Hsu. While this strategy has indeed significantly increased the brand s awareness and strengthened consumers trust, it does not perform well in differentiating Head & Shoulders from other brands in terms of brand positioning, as these spokespeople do not have a consistent and clear image which is closely tied with the brand image of Head & Shoulders. Figure 7: Match of personality between Head & Shoulders and its spokespeople The analysis of the common traits shared by celebrities and the brand can provide a gauge of the fit and gap between them. For brands that use multiple celebrities to represent its different series of products, an analysis can be made of their celebrity team to determine whether the individual celebrities succeed in conveying the brand traits consistently or whether they complement one another.

9 3. Celebrities ability to set an example The evaluation of spokesperson candidates and their fit with the brands advertised also needs an understanding of the influence of the spokespeople on target groups, especially their influence in the cyberspace in an age of social media. CelebrityZ uses two indicators role model and social media index to measure the persuasive power of the celebrities over target consumers and determine whether they can lead the trend as opinion leaders. In addition to their performance in their own fields, role model also measures other positive qualities shown by the celebrities. Yao Ming s active involvement in charity, for example, makes him considered as not only a gifted basketball player but also a caring person of social responsibility, which extends his influence beyond basketball fans. CelebrityZ uses the social media index to evaluate celebrities influence in the social media. This indicator takes into consideration not only the number of followers of the celebrities, but also, and more importantly, their influence as opinion leaders in social media. This provides a reference point for brand managers in social media marketing. Through continuous celebrity tracking, CelebrityZ finds that celebrity personalities are not static. Besides, many celebrities represent more than one brand, and it easily causes confusion when they are associated more strongly with some brands than with other brands. This calls for continuous monitoring of the brand spokespeople to ensure the effectiveness of celebrity advertising. One example is Dee Hsu, or Little S as she is more commonly known. She used to be perceived as a rebellious and unapproachable person, but after she became the mother of several children and served as the spokesperson of several mother and baby products, the caring trait of her personality has developed and become accepted by consumers. Although in comparison with other celebrities, her rebellious image is still prominent, if a brand intends to utilize this trait of hers in its brand advertising, it should have a long-term monitoring of the trait; otherwise it may not be able to achieve the intended effect. Figure 8: Change of image of Dee Hsu Long-term continuous monitoring An effective evaluation system of this nature requires long-term continuous monitoring. Many brand managers make a lot of effort in selecting their brand spokespeople but lack tracking and evaluation of their spokespeople. This may allow opportunities to slip through their fingers and make their brands vulnerable to negative developments about their brand spokespeople.

10 CONCLUSIONS A common mistake of brand managers in celebrity advertising is to choose celebrities according to their own liking with the priority given to the degree of the popularity of the celebrities based on their own judgment. This often leads to incompatibility between the brands and their celebrity spokespeople, with the result that the consumers only remember the featured stars without remembering the advertised brands. Even if some brands increase their awareness within a short time this way, it is not beneficial to their long-term brand building. The key to the success of celebrity endorsement is to determine the best celebrity candidate based on a clear understanding of the brand's present positioning, brand personality and ideal, and the goal of communication, identify the best matching point between the brand and its spokesperson, and optimally integrate all of these elements in the advertising. Reference: B Zafer Erdogan and M J Baker, Towards a Practitioner-based Model of Selecting Celebrity Endorsers, International Journal of Advertising, Vol. 19, No. 1, 2000 Clinton Amos, Gary Holmes and David Strutton, Exploring the relationship between celebrity endorser effects and advertising effectiveness: a quantitative synthesis of effect size, International Journal of Advertising, Vol. 27, No. 2, 2008 Saurabh Sharma and Jason Spencer, Middle Kingdom s Celebrities To Be, WPP Atticus, 2011 About CelebrityZ The world's leading strategic research firm Millward Brown are working together with the well-known online panel provider, Lightspeed research to track dynamics of Chinese celebrities and build China's largest celebrity equity database CelebrityZ. The database will be combined with the world's largest brand equity database BrandZ, providing standard measurements and recommendations for the brand s celebrity endorsements and brand personality building. Currently CelebrityZ database covers over 500 celebrities, has surveyed over 100,000 consumers nationwide and is increasing in total sample size by an additional 5,000 surveys per month.