Celebrity Product Placement and Palin's Arctic Cat Coat

I'm a little behind on what's going on in Alaska, but I see that Linda Kellen Biegel at Blue Oasis has riled up a bunch of folks for filing an ethics complaint against Gov. Palin.

The complaint alleges a conflict of interest when Governor Palin wore specially designed snow-machine gear advertising her husband Todd's biggest Iron Dog sponsor, Arctic Cat Inc. She did so while acting in her official capacity as Governor of the State of Alaska and official starter of the Iron Dog Snow Machine Race.

[The picture is from the Blue Oasis post too so you can see what the complaint is about.]

According to later posts, she's gotten a lot of nasty comments, emails, and phone calls. Some of the comments on her blog carry a theme of "So what's the big deal, I wear logo stuff all the time on all my clothes."

So I googled around to find out about product placement and celebrity endorsements.

In an article published last October in Harvard Business School Working Knowledge Sarah Jane Gilbert wrote about Harvard Business Professor Anita Elberse whose favorite research topic is described as "the value created and captured by superstars."

Anita Elberse: The sports marketing industry, covering everything from television rights to endorsements, sponsorships, and merchandising, is an important sector and growing rapidly. In its Global Entertainment and Media Outlook, PricewaterhouseCoopers estimated that the sports industry accounted for around $50 billion in revenues in the United States in 2007, up from just under $35 billion in 2001. On a global scale, total revenues are expected to be nearly $100 billion this year, compared with $70 billion in 2001.

As far as endorsements are concerned, marketers increasingly turn to athletes to promote their products. The marketing executives I spoke with told me they value these endorsements especially because it is getting more and more difficult to reach a wide group of consumers using traditional ways of advertising such as television commercials, and harder to gain credibility with commercial messages.

You can read the whole Elberse interview at the Harvard link above. Here's one more excerpt:

[B]ecause star athletes and other celebrities are "brands" that have certain meanings for consumers, companies can spend millions of dollars to align themselves with those celebrities. They hope those celebrities' brands "rub off" on the products they are trying to sell, be it apparel, cars, or beauty products. . .

Considering the limited free time an athlete like Sharapova has in a year filled with training sessions and tournaments across the globe—less than 20 days remain for sponsorship commitments—I found it remarkable to learn how much value is generated.

There are also articles that suggest that the return on investment isn't really there. InnovationsReport writes, for example, that

Advertisements featuring endorsements by celebrities such as David Beckham are less effective than those featuring ordinary people, new research suggests.

Perhaps the marketing people just like being around celebrities so pushing endorsements gives them that opportunity. Whether on the whole these product placements are worth the money (we all now know about the fallibility of banking experts who pushed the various home loan packages, so why should marketing experts who push celebrity endorsements be any more reliable?) the fact is that businesses believe in them enough to spend tens (hundreds?) of millions of dollars every year on them.

In an article about strategies for getting celebrities to publicly use their products, Jonathan Holiff, describe as the president and CEO of The Hollywood-Madison Group, offers three strategies for getting products out to celebrities.

1. Gifting the talent (this usually involves supplying products for gift bags at live events)

2. Product seeding (products are distributed more widely in hopes of securing a promotional benefit and kicking off a trend)

3. Barter relationships (individual celebrities agree to participate in custom programs in exchange for valuable products).

He says the most effective is the third, barter relationships. He goes on to give an example of promoting the Sony CD Mavica digital camera.

Sony wanted to involve celebrities with its products and wanted that involvement to influence the public in a meaningful way. They sought a high-profile event—preferably benefiting charity—upon which to launch a yearlong press campaign in time for the Christmas shopping season. The focus: to promote the simplicity of CD-based photography.

So, with a limited budget, Holiff's company suggested getting celebrities to take pictures of what "freedom" means to them, that would be auctioned off for charity. The point was to use several ploys here to entice the celebrities into participating:

Such an artistic challenge, coupled with the prospect of receiving free Sony products, not only served to induce celebrities to participate but also offered us an extraordinary opportunity: to frame these pictures and mount an exhibition that raised money for charity. Indeed, the charity component attracted higher-caliber celebrities and provided the "hook" to draw media attention. . .

Fifteen top celebrities demonstrated the practical use of Sony's product and authorized the use of their names, likenesses and opinions about the product for press and marketing purposes (for one year). Sony received free advertising for its product in print and online for three months (worth an estimated $100,000), as well as 3.6 million Web page impressions (auction as a whole) and national press coverage, including Entertainment Tonight.

Clearly, some celebrity marketing campaigns work better than others. Martin Roll, who is described on VentureRepublic as a

world-renowned thought-leader on value creation through brand equity

describes some essentials of celebrity endorsements.

* Attractiveness of the celebrity: This principle states that an attractive endorser will have a positive impact on the endorsement. The endorser should be attractive to the target audience in certain aspects like physical appearance, intellectual capabilities, athletic competence, and lifestyle. It has been proved that an endorser that appears attractive as defined above has a grater chance of enhancing the memory of the brand that he/she endorses.

* Credibility of the celebrity: This principle states that for any brand-celebrity collaboration to be successful, the personal credibility of the celebrity is crucial. Credibility is defined here as the celebrities’ perceived expertise and trustworthiness. As celebrity endorsements act as an external cue that enable consumers to sift through the tremendous brand clutter in the market, the credibility factor of the celebrity greatly influences the acceptance with consumers.

* Meaning transfer between the celebrity and the brand: This principle states that the success of the brand-celebrity collaboration heavily depends on the compatibility between the brand and the celebrity in terms of identity, personality, positioning in the market vis-à-vis competitors, and lifestyle. When a brand signs on a celebrity, these are some of the compatibility factors that have to exist for the brand to leverage the maximum from that collaboration.

Palin scores high on the physical attractiveness. I would say the audiences are split on her, but she has some extremely enthusiastic followers along with those fairly strongly opposed. So it's mixed on the second criterion. But surely there aren't too many - maybe none - celebrities of Palin's level who is so compatible to snow machine racing. So, this is probably a pretty good celebrity catch for Arctic Cat.

But Ronnie05 on his blog points out another celebrity endorsement:

Research In Motion and Blackberry do not require any celebrity endorsement. Why would they when the biggest celebrity in the world, the single “hero” in the world and in America, is doing it for them and is not charging a single cent. Barrack Obama’s penchant for the “Blackberry” has steadily found its way into the press.

The question is whether Palin's use of the Arctic Cat coats is the same thing as Obama's use of his Blackberry. The Blackberry is a tool that many people use and presumably Obama picked his up on his own and the press happened to catch him using it. I guess we should dispatch someone to find out if the Blackberry company gave it to him in hopes he would be photographed using it.


Given the amount of money spent on celebrity placements, and the careful planning placement specialists seem to go through to get the right people to publicly use their products, I think it would be of interest to us all to hear exactly how it came to be that Gov. Palin wore that coat at the opening of the Iron Dog race.

Two basic questions we need answered are:

1. How did Palin get the coats? Did she go out an buy it? Was it something that she had in the closet and that she wears all the time? Was it a gift from Arctic Cat?

2. Did Arctic Cat in any way influence Palin to wear the coat at the start of the Iron Dog race?

If it was a gift from Arctic Cat, given what I've been reading on product placement, it probably wasn't just an accident that the Governor of Alaska opened the Iron Dog Snow Machine Race wearing the coat. There were probably product placement pros carefully plotting the whole thing.

Just as Jonathan Holiff outlines how they plotted to get celebrities to use the Sony cameras by setting up a contest that benefited charity, Arctic Cat's marketing specialists probably said, "This will look so natural. We already sponsor her husband, so why wouldn't we give him and his family jackets? And then all she has to do is wear it when she opens the race. Bingo, we'll have pictures of Sarah Palin, one of the most well known celebrities in the US, who also happens to be linked in the public's mind to snow machines, all over the place."

There doesn't even have to be any sort of additional payment to Palin (though Biegel's complaint says Arctic Cat is Todd Palin's biggest Iron Dog sponsor, so the Palin family is getting something from the company.) And Palin likely did not give them any rights to use the pictures (though we should ask about that too just to be sure).

And Palin might have been lulled into all this just as all those celebrities who get gifts are. You get a free camera, we challenge your ego by getting you to take pictures we're going to sell for charity, and we'll throw in "Freedom" as the theme for the pictures. Who can resist?

But Palin isn't just a celebrity. She's a government official. She's a representative of the People of Alaska, the head of our government. Our governor must separate private product endorsements from her official duties as governor. And yes, making appearances at the openings of events, cutting ribbons for new roads, etc. in her capacity as governor are official duties. [Would she have been invited if she were not the governor?] And furthermore, this is a politician who became governor in part on her strong stance against public officials whose personal interests and public interests overlapped.

So for those who say they wear clothing with brand names attached all the time, I would say I suspect this isn't some trivial incident comparable to her happening to put on Levis and someone complains that the little red tag in back is an endorsement. These are big conspicuous coats with giant endorsements all over them. This is big business and potentially worth lots of money for Arctic Cat.

So, did Sarah buy these coats or were they given to her?
How did she decide to wear them to the opening of the race?
Did Arctic Cat and/or their marketing company have a plan for getting Palin to wear the coat at the opening of the race?

If this were an isolated event, I might be more likely to lean with those who say to give her a pass on this. But sometimes the problem is a series of small events, no single event being that big a deal. And if we are serious about having politicians who aren't tainted by special interests, then we have to call every single case so that politicians finally learn that their jobs are to serve the public without getting extra benefits for themselves along the way. If all these sorts of special perks are too much of a hassle, then maybe the people who run for office to get them will find more hassle-free endeavors.

And it means holding Democrats accountable as well as Republicans.