Question:What are the risks of celebrity endorsements?

Answer:The following is a summary of a MarketingProfs article by Robert L. Kulik that you can read in its entirety here

Newsworthy scandals occur so often the public may find themselves almost jaded to them. It's serious business to advertisers, however, who invest millions of dollars on the squeaky-clean reputations of stars in the spotlight. Just ask Hertz, which was connected to controversial O.J. Simpson. Or Campbell's Soup, who sponsored Nancy Kerrigan when she fell victim to the shameless attack instigated by Tonya Harding. More recently, Mariah Carey was admitted to the hospital with a so-called "nervous breakdown", and Nicole Kidman and Tom Cruise went their separate ways in a scandal that vilified Cruise and made Kidman look like a pious saint.
Over the years, celebrity endorsers have been involved in many different kinds of scandals, including illegal drug use (tennis player Jennifer Capriati), shoplifting (actress Winona Ryder), steroid use (Canadian sprinter Ben Johnson), posing in the nude (former Miss America Vanessa Williams), or being stabbed (tennis player Monica Seles).
For celebrities that are blameworthy for scandals, the credo is "lie low" and wait until the scandal disappears from the news before quietly firing the celebrity (typically, the company doesn't renew the endorser's contract). For companies sponsoring a highly blameworthy celebrity, stronger action is often warranted. In these cases the company often makes a public statement that distances the company from the endorser. For endorsers that are not culpable for their scandal (for example, Mariah Carey or Nicole Kidman), the company may even come out with a statement of support for their spokesperson, in effect strengthening the bond between celebrity and company.
In short, the link between product endorser and company is a tenuous one which must be managed with diligence by a company that chooses to associate itself with a fundamentally imperfect human being.
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