Marketing mania

Most of us know that when we endorse the back of a cheque, we assume responsibility for that amount, validating it.

If the transfer for some reason is invalid, the name on the back assumes liability.

The endorsement of a product in Canada has become commonplace, although, of course, unlike the endorsement of a cheque, the endorsement does not entail any liability as long as there is no wrongdoing involved.

It has been estimated that sponsors spent nearly $2 billion last year. They assume (hope) that this will be a testimony to the reliability of the product, a form of marketing mania. Celebrities are paid enormous sums in the belief that endorsements will boost sales. Usually, entertainers and sports heroes are corralled to be sponsors.

Advertisers spend money to make the public aware, supposedly, of a connection to a sponsor. Agencies handle both sides of these transactions. There is a constant effort to develop endorsements, particularly after Stanley Cup playoffs and the Olympic Games. Players are prominent in the news at those moments.

One study revealed that about 11 per cent of total advertising budgets are allocated to endorsements. The dollars devoted to endorsements, however, on average did not lead to a good return on the investment. Yet Nokia believes that endorsements provided a very substantial boost to sales volume. Most advertisers remain confident that endorsements work to a company’s benefit.

Evaluating the effectiveness of endorsements must be nebulous, still it seems to this columnist that logically they are not an effective marketing tool. For instance, if a tennis star wore shoes of a particular brand, would that help others who use that product? A movie actress lends her name to a perfume of dubious allure to others.

Wearing a suit with the Calvin Klein label can be expensive. Is that sensible inasmuch as Calvin Klein had about as much influence on the outfit’s design as the man on the moon?

Sponsors every year devote tens of thousands of dollars for a survey of the value of an endorsement. Still, how can one determine if using money for a sponsorship indeed were the motivating factor in sales? Concerts, music festivals or museums enlist sponsors. These goodwill gestures may not lead to bigger audiences, but the sponsor may derive some satisfaction by helping a worthy cause.

Then too, the effect on sponsors of large sums of the use of their names may be a corrupting influence.

Evaluating the effectiveness of sponsorship is a tricky question. Perhaps one may state that they are over-valued and over-used.



Bruce Whitestone