Authors Arpita Agnihotri (Pennsylvania State University/Harrisburg) and Saurabh Bhattacharya (Newcastle University/UK) examined 149 endorsement events between 2003 and 2014, and tracked relevant details from the Indian stock market in the same timeframe.
More specifically, their research – presented in the paper The Market Value of Celebrity Endorsement: Evidence from India Reveals Factors That Can Influence Stock-Market Returns – assessed whether variables such as endorsement announcement specificity, the reputation of the endorsing celebrity, and if the endorsing company is of Indian origin are able to generate “abnormal” positive returns.
Similarly, they wanted to identify the company-level determinants of these favourable returns, as well as the celebrity-based factors that played a role.
And while the scholars expected that mainstream celebrities would be more effective spokespeople, they found that endorsements by niche celebrities actually generated more positive “abnormal” returns.
Some of the main reasons for this outcome, the paper proposed, are that “niche celebrities do not overpower the brand, and second, unlike mainstream celebrities, they are not overexposed.
“Thus, even though they may not be widely known to a large segment of the general population, their success in their field – be it photography, cooking, or modeling – makes them celebrities in that niche environment.”
An important implication for marketers: “Although brand managers invest heavily in celebrity endorsement and try to beat the competition by catching more of the customers’ attention, they need to realize that heavy investment in endorsements may lose value if a celebrity over-endorses a brand.”
'The Market Value of Celebrity Endorsement' appears as a part of a special What We Know About Celebrity Endorsement in Advertising section in the most recent edition of the Journal of Advertising Research.
Sourced from Journal of Advertising Research; additional content by WARC staff