Star names worth big bucks in digital marketplace
The Web has been called a tool celebs can use to connect with their fans and build their audience.
That’s so yesterday.
Today it’s also a cash-generating machine that puts money in their pockets via sponsored Tweets, paid endorsements for products and sales of their own licensed merchandise.
Celebrities are thinking more and more about monetizing their online audience as opposed to just building it, “which is what the first five or six years of social media was all about,” says Arnie Gullov-Singh, CEO of celebrity marketing agency Ad.ly, which launched Charlie Sheen on Twitter in March. The BevHills-based outfit says it has a stable of 1,000 celebs from Hollywood and sports who send out sponsored Twitter messages to their followers for cash from 150 advertisers, including AT&T, Microsoft, NBC and Sony.
Marketers have quickly come to realize that celebrities are magnets for corralling eyeballs in social media. In the flip of a Twitter hashtag, Ashton Kutcher, Oprah Winfrey, 50cent and Sheen each can deliver millions of followers.
“About a third of the people in America follow celebrities, and there’s a high overlap of the people who follow celebrities that follow brands as well,” says Radha Subramanyam, senior veep of media and advertising insights and analytics for Nielsen. “They tend to be the more connected people.
Celebrities’ growing online clout could ultimately shift the balance of power between them and their studios, leading to some head-butting in Hollywood.
“Today it’s taken for granted that talent will automatically give studios or record labels free publicity through their social media platforms,” says Jason Klein, co-founder of Special Ops Media and now a digital media entrepreneur. “As celebrities continue to build sizable followings and direct relationships with their fans through Facebook, Twitter, and other platforms, it’s entirely possible that one day stars with major followings will attempt to charge studios for access to their fans on social media platforms.”
One of the hottest areas where the power of celebrity is on display is the fragrance biz, where brands are cashing in with big-selling scents from Celine Dion, Tim McGraw and Sarah Jessica Parker (all with Coty), Hilary Duff (Elizabeth Arden), Paris Hilton and Queen Latifah (Parlux Fragrances) and Justin Bieber (Give Back Brands). Industry newsletter the Licensing Letter estimates that North American retail sales of licensed fragrances rose 7.1% in 2010 — an impressive increase when compared with an average 4% recession-induced decline for 32 categories within the entire licensed-merchandise business, which is defined as products carrying identification of third parties.
“Once something works for a couple of celebrities, everyone seems to pile on,” says Licensing Letter executive editor Ira Mayer.
The newsletter estimates that retail sales of all licensed merchandise based on celebrities — a subcategory within the broader licensed range that also includes sports teams and corporate trademarks — rose 4.8% despite the poor economy, driven by reality TV stars, famous chefs and actors who licensed their names to apparel, accessories (scarves, handbags), home and kitchen goods and foods — in addition to fragrances.
Royalties for celebrities are also high, averaging 10.1% of net wholesale prices, which is above the industry average of 8.6%, the Licensing Letter estimates.
Reality TV stars have an especially high sizzle-factor in cyberspace, which marketing pros credit to their ubiquity on the tube and to the fact that auds identify with their real-life travails. Plus, reality celebs such as Snooki from “Jersey Shore” and Bethenny Frankel of “The Real Housewives of New York City” are often willing to work harder than A-listers to promote themselves.
The estates of deceased celebs are also in on the social media game, their marketing agents peppering cyberspace with content to keep old fans engaged and corral a new generation of aficionados. “Without a doubt, it’s been a game changer, especially when you look at a bad-boy actor James Dean or a 50s pin-up girl Bettie Page,” says Mark Roesler, CEO of CMG Worldwide, which reps late celebrities’ estates.
There are ironic twists in all this. Dean and Lee Marvin, who also died decades ago, have websites with their names as dot-com domains. George Clooney, Steven Spielberg and other alive-and-kicking celebs do not.
Why the occasional reticence? Some celebs simply shy away from the personal limelight. Other are just not interested in selling their own branded products.
Notably, official websites for big-name Hollywood talent are not necessarily a big draw. Audience measurement firm ComScore estimates that many pull in only tens of thousands of unique visitors a month on a worldwide basis.
There are also wormholes in cyberspace, most notably imposters who occupy a famous name or else use confusingly similar names — all the while presenting photos of the celebrities in order to appear authentic. Twitter confers Verified Account status on real celebrities. Whoopi Goldberg has issued just one Twitter message: “I’m putting this up so people don’t steal my ID. Yes, this is me, but you know I’m not gonna be here often.”
Another trap: Some of the smaller consumer-goods companies that gravitate to online marketing because it’s relatively inexpensive tend to be litigious, seeking financial damages from celebrities when alliances don’t pan out. (Blue-chip companies avoid messy spats because they don’t want their well-known corporate images dragged though the mud.)
But for many, the positives outweigh the risks. “Going forward, I think it’s going to interesting to see the dynamic between Silicon Valley, with its thinking that content should be free, and the entertainment community, which has a history of monetizing content,” says Ad.ly’s Gullov-Singh. “We’re sitting right in the middle of it, and we don’t know exactly how that is going to play out.”
Various celebrities ranked by their number of Twitter followers
1. President Obama/re-election 9,425,052
2. Ashton Kutcher 7,304,414
3. Oprah Winfrey 6,882,320
4. 50cent 4,812,612
5. Charlie Sheen 4,530,743
6. Paris Hilton 4,380,791
7. Stephen Colbert 2,514,694
8. Snooki (Nicole Polizzi) 2,394,276
9. Tom Hanks 2,322,253
10. Tom Cruise 1,797,168
11. Sarah Palin 619,947
12. Bethenny Frankel 602,594
Source: Variety from Twitter postings