Negative Spokesperson Publicity: Comparing the Reactions of Investors and Firms

Abstract

Despite the increased cost of using a well-known personality as an endorser in an advertising or marketing campaign, the number of celebrity spokespeople has significantly increased over the past few decades. According to recent studies of world’s second largest market research organization Mill ward Brown (2006), one out of four commercials in the United States draws on celebrity power. Previous studies have shown a multitude of positive effects that can be exploited by using celebrity spokespeople. The majority of research deals with theories or presents empirical evidence regarding how celebrity endorsement positively affects attitudes and intentions of consumers as well as firm value (e.g., Agrawal and Kamakura 1995; Dean and Biswas 2001; Mathur et al. 1997).