Brands can gain value if they respond quickly to negative publicity around a celebrity endorser

New Ideas in MarketingEssential news for marketers, summarised by YouGov
March 27, 2019, 3:50 PM UTC

An academic study analysed 128 separate celebrity endorser controversies between 1988 and 2016.

Negative publicity for celebrity endorsers can boost brand value if the companies respond quickly according to a recent paper summarised in this article. But creating an artificial scandal for publicity is likely to backfire immediately and damage the brand if it becomes public.

The study found that a fast announcement or statement after an incident of negative publicity saw the company value increasing by 2.10 percent over the next four trading weeks. But the “window of opportunity” for companies to turn this into their favour is small, responding to a scandal after 72 hours has negative effects which increase until the issue is addressed.

The study’s authors have posited that a definitive response, whether a company chooses to continue or abandon a celebrity endorsement, is more likely to yield positive response than no response at all.

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[5 minute read]