ialci law of luxury goods & fashion series – 22 July 2014

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Celebrity endorsement: time-tested tradition with advertisers

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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So what’s the big deal?

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Kate Moss’ coke fiend

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Luis Suarez’s biting habit

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Tiger Woods’ womanizing & subsequent messy divorce

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Are luxury & fashion brands really affected by endorsers’ misbehavior?

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Threat of a serious hit on sales volumes!

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Risk especially high in largest luxury-consuming countries

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Other reasons brands may terminate a celebrity endorsement?

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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It does not fit the bill, babe!

Ambassador’s overexposure by constant appearance &

overshadowing of the brand

Lack of coherence between the celebrity’s

personality & the brand’s value & image

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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So what can luxury & fashion brands do to avoid being affected by endorsers’ misbehavior?

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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The winning formula for an endorsement deal

CELEBRITY ENDORSEME

NT

DUE DILIGENCE

CONTRACT TERMS

INSURANCE

ONGOING MONITORING

TERMINATION RIGHTS

PRE-PLANNED “CRISIS

MANAGEMENT” MEDIA

STRATEGY

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Perform due diligence on proposed endorser

•Research whether proposed celebrity has done or said anything in the past that might harm the brand

•Detailed, professional, thorough research

•Request celebrity to disclose all incidents in the past that could affect the endorsement value

•Understand & accept the existing reputation of celebrity

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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The importance of getting the right match

•Choose celebrity endorsers who align with values represented by brand

•Choose celebrity who resonates with 2 audiences:1. Brand’s core demographic (current customers)

2. Brand’s aspirational demographic (target customers)

•Carefully selected celebrity partner + well-structured endorsement deal = massive economic benefits for any company

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Protective & thoughtful contractual terms

ENDORSEMENT CONTRACT

MORALS

CLAUSE

DISCLOSURE

NO DEFAMATION

NO PUBLIC DISREPUTE

NO OFFENCE OF PUBLIC MORALSEXCLUSIVITY CLAUSE

‘REVERSE MORALITY’ CLAUSE

GOOD CORPORATE CITIZEN

SUSPENSION

EXTENDED INJURIES

SUSPENSION BY GOVERNING BODY

‘MORAL CLAUSE’ EVENTS

TERMINATION

MISSED SCHEDULED APPEARANCES

WEARING COMPETITORS’ PRODUCTS

DISPARAGING BRANDCELEBRITY

RETIRES/ABSENTMISBEHAVIOR

CLAW BACK

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Insure yourself!

• Death, disability and disgrace insurance policies

• Emergence of several insurance products to address risks exposures

• “what-if” scenarios

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Ongoing monitoring (offline & online)• Measure the impact of traditional media and digital media • Monitor the press, social medias, blogs for quotes about endorser• Brand damage mitigation measures

Axelle Despiegelaere v L’OrealWhat to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Pre-planned ‘crisis management’ media strategy

• Gain control over how a damaging story is handled

• Establish whether or not the allegations are true

• Decide whether brand stands by the celebrity or terminate the association

Nike v Tiger Woods

Nike v Lance Armstrong

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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Conclusion

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage

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ialci law of luxury goods series @ Pullman London St Pancras:

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillageAnnabelle GaubertiFounding partnerannabelle.gauberti@crefovi.com@Crefovi on Twitter

What to do when celebrities get it all wrong? How brands can protect themselves from ‘damaged reputation’ spillage