Teaming up with a star can catapult a brand to a whole new level of success, or prove costly when they go wrong. Experts reveal how to keep such contracts lucrative and everyone happy
When Kanye West parted ways with adidas earlier this year, the sportswear giant took a financial hit to the tune of billions of dollars. Teaming up with one of the world’s most recognised artists with an enormous fan following seemed a sure path to profit, but after nine years, adidas decided that allegedly anti-Semitic comments made by the rapper would potentially damage the German firm’s global brand image, and it stepped away.
A more recent example is the relationship between Sean Combs (P Diddy) and drinks giant Diageo, which was terminated after the hip hop artist accused the firm of failing to effectively market their joint vodka brand Ciroc. The claim was wholly denied by Diageo, but with grumbles mounting from Combs, the company felt it wise to end the arrangement.
Such celebrity, and increasingly influencer, deals could be seen as the ultimate risk-reward gamble for businesses, because when they work effectively they can deliver huge returns on investment. For instance, despite its bitter finish, Raf McDonnell says the Combs-Diageo tie-up should be viewed as a long-term success in the context of its era.
The founder of UK agency Talent & Brands, who has brokered many celebrity brand deals with the likes of Robbie Williams, One Direction, Kylie Minogue and Ariana Grande, McDonnell says the Combs-Diageo deal enjoyed a successful run of 15 years after the firm decided to make one final push to resurrect the failing brand.
“Combs networked the brand into his peer group of influencers, suddenly sales rocketed and the brand was an amazing success,” says McDonnell. However, ensuring a relationship thrives over a projected period of time, in which it continues to deliver for both the producer and the celebrity, involves managing a number of key considerations, says McDonnell.
For instance, this deal and its initial iterations took place before social media was omnipresent; in comparison to more recent online promotional campaigns, it’s easy to view Ciroc’s media reach as limited. Now, through the massive power of social media channels, the opportunities for brands to capture value through celebrity partnerships can be vast, and through the use of sophisticated metrics it can be highly measurable, he says.
Social media has created the perception that celebrity tie-ups are easy to develop. “There may be a core audience that will buy into it, but both parties won’t deliver the marketing or monetary value they think they’re going to get in the medium to long term if it is not well researched,” says McDonnell. He adds that a starting point for any relationship is understanding how synergistic the relationship is for the brand and celebrity, which requires good due diligence in order to ensure against calamities such as celebrities being seen with a rival brand.
McDonnell says it’s important to clarify what a celebrity’s values are at the heart of their personal brand, and then to find creative ways to harness that personal brand to fit the product. Failure to get it right can have disastrous consequences, he says.
“A classic example was Britney Spears regularly seen drinking Coke, when she was being sponsored by Pepsi. That’s an obvious reputational risk,” adds McDonnell, who has worked for Coca-Cola and Pepsico, as well as Amazon and EMI Music.
Get it in writing
A method of protecting against such risks is to put in place tight legal controls, which would protect the brand if the celebrity – or high-profile person – fails to adhere to commitments. These can be tailored to reflect the profile of the personality, the value of the promotional campaign, and the type of engagement they are likely to have with a brand, where the degree of risk appetite can be considered from a commercial, as well as a legal perspective, says Jonathan Masucci, a partner at law firm Girlings.
“An influencer that you’re paying a lot of money to, that is engaged with multiple brands and extensive promotional campaigns, will likely carry more risk versus someone where there is a less developed relationship, so the contract, in terms of risks that it carries, is drafted accordingly.
“For instance, mega-influencers who undertake a lot of work across multiple and sometimes competing brands, will naturally carry an increased risk that another brand might claim against you if the rights to content they own have been breached, but with a smaller influencer, generally speaking, that is less likely to happen.
“These relationships can be categorised in terms of high, medium and low tier, with the latter for smaller campaigns and one-off campaigns, where there is less potential jeopardy,” explains Masucci. But, critically, any contract of this nature should enable a brand to swiftly terminate the arrangement if needed, a widely understood prerogative across the legal jurisdictions that may be involved in a global deal.
Masucci gives the example of a relationship where, during contractual negotiations, an influencer resisted the inclusion of a termination clause, giving his client the ability to terminate the association promptly, where necessary. The influencer eventually relented as the deal was being finalised.
“I received a call a few months later from the client saying that the influencer had posted controversial content on social media and they did not want their brand associated with such content, or the influencer. Fortunately, they were able to rely on the robust termination provisions to immediately terminate the relationship,” he says.
That said, in most cases, both parties often try to work things out in the event of a problem, says Masucci. “Generally, if the partnership is working well, there wouldn’t usually be a reason for the brand to terminate immediately unless the influencer has significantly breached the contract and undermined the brand,” he highlights.
Give a little bit of your love to it
One way to maintain successful, ongoing partnerships with celebrities is to ensure they have plenty of input into how projects will fit their expectations and needs, says Michael Djan, a UK-based marketing and strategic partnerships executive. Djan says this should partly drive the value of the project because content coming from the celebrity will define how the project can develop with a degree of authenticity, and it should help maintain their enthusiasm for the brand.
“With a platform like Instagram, you’re trying to acquire content from a celebrity that is exclusive, so you need them to help come up with ideas to ensure that content is original, before it’s seen anywhere else,” explains Djan, who was head of partnerships UK at TikTok, and previously held roles at United Talent Agency and Facebook.
Especially in the case of large celebrity partnerships, projects should always connect back to the elements of relevancy, authenticity and audience connection. When it’s not obvious that all these elements are in place, an effective brand strategy needs to be developed, where they “have walked celebrities along with them to get to a point where they can buy into what they are now creating”, says Djan.
He offers the example of Formula 1 champion Lewis Hamilton, who was keen to embrace the fashion industry, but rather than start his own line, he developed a collection with casualwear giant Tommy Hilfiger. “The project introduced him to the fashion community and he’s been taken seriously in that world. But to make it work, Hilfiger would have undertaken a significant amount of mapping to confirm audience overlap and make sure that they’re both right for each other.
“If Hamilton wanted to do more in fashion in the future, it wouldn’t be such a stretch now because there’s an audience who have bought into him as somebody who is credible within that space, because he’s part of a credible brand and they’ve made it work,” says Djan.
Know when it’s time to move on
Of course, trends never stand still as anyone who has nurtured brand relationships with celebrities will tell you. And while the deal between Combs and Diageo was a perfect fit 15 years ago, eventually it became strained and could no longer endure.
“When he was a hip hop artist, the hugely popular videos portraying that culture at that time featured a kind of extravagance, where the presence of Ciroc vodka made sense. As a campaign it wasn’t far-fetched because relevancy, authenticity and audience engagement were all there,” explains Djan.
The key to keeping celebrity relationships on track is understanding that although big name celebrities such as actress-singer Selena Gomez or footballer Cristiano Ronaldo can down a partnership if it doesn’t fit, the majority of celebrities and influencers will look keenly at deals being offered.
“If you are a celebrity, it is unheard of that you wouldn’t have a brand endorsement, and these partnerships will represent a substantial chunk of their income. So there are always ways to try and keep partnerships on track – as long as you don’t expect celebrities to do everything you’re expecting,” says McDonnell. “The key,” he concludes, “is getting a celebrity to want to work with your brand and to continue working, for the right fee and the right level of services”