The number one expectation of any brand that employs endorsement is the promotion of its products or services, as well as increase in product’s conversion rate (the percentage of people who buy/use out of the people exposed to a product/service). It is expected that the more people get to know about the product, the more they are likely to buy when something is endorsed by someone they respect.

Is endorsement all about celebrities?

As mentioned earlier, while celebrities or influencers lead in endorsements, there are other categories of important and strategic people/bodies that can endorse a product or service. An endorsement of a toothpaste brand by the Nigeria Dental Association (NDA) is premium for such a product. This is why different toothpaste brands in the country boldly trump such endorsements in their advertisements and packaging. Do you think a vegetable oil brand with claims of low cholesterol will make light an endorsement by the Nigeria Heart Foundation or the Nutrition Society of Nigeria? I bet they will not. And, this why they let you know from the ads and packaging.

How are parties protected in an endorsement deal?

Exclusivity
Exclusive deals are pretty cut-and-dry in the sense that the agreement clearly spells out which other products or services cannot be activated. When a celebrity signs an exclusivity-based endorsement, they are signing on to solely represent that brand within that particular category within a stipulated period of time. For instance, Nollywood actor, Femi Adebayo has an exclusive deal with Trophy Lager. He can only represent Trophy brands, and not any competitor within that space. Music idol, Tuface Idibia and his family are signed up to promote Coca Cola. It would be a breach of contract to see them promote any competing brand.

Essentially, exclusivity deals are put into place to strengthen the relationship and to incentivize the celebrity with more money and assets to keep them loyal to that particular brand and dissuade them from engaging with competitors.

Morality clauses
Morality clauses give a party the right to terminate an endorsement contract if it would be hazardous for that party’s reputation or image to remain bound to the contract. This has historically been a way for a brand to escape their relationship with a celebrity who has come under fire for a PR nightmare (accusations of infidelity, bad public image, criminal accusations, etc.). And it has been activated time and time again with contract language in place to protect organisations from being guilty by association.

While influencers and celebrities don’t necessarily need to have a squeaky-clean personality and lifestyle to earn and maintain an endorsement, they should know that reckless and controversial actions may impact negatively on the brands they represent or cause them to lose such deals.

If an influencer scandal truly damages company reputation or grossly misaligns with company values, then ending that relationship is an obvious choice. Transparency, quick thinking, understanding company values and aligning those values with brand messaging are crucial to managing unexpected controversies that come with celebrity and influencer endorsements. We remember how Nollywood actress, Funke Akindele lost an endorsement deal with Dettol antiseptic in the wake of her being called out and arrest for holding a party in contravention of the Covid 19 lockdown restrictions imposed by Lagos state government. No brand would associate with someone whose action jeopardised the safety of other people.

It is important to add that while brands are quick to drop endorsers when scandal hits, some companies have stood by their partners, in times of controversy. Despite all the crises that golfer, Tiger Woods faced, the iconic sport and lifestyle brand, Nike maintained its relationship with the golfer for years. American football star, Colin Kaepernick’s activism against racial injustice did not deter Nike from putting his face on billboards in New York’s Times Square.
If someone asks: “what if a celebrity or an influencer wants to distance themselves from the bad image/public relations nightmare that a brand has created?”

This question stems from brands generating bad publicity from extreme political stances, unfair working environments for their employees, and lack of support for social causes. The answer is simple; influencers can pull the plug on an endorsement deal if they believe their values or position no longer align with the company’s actions. Let me add that the legal implications of such a move must be considered too.

Examples endorsement fails

Tiwa Savage
In 2021, Nigerian singer, Tiwa Savage, on a radio programme, hinted that she was being blackmailed over a privately recorded video that inadvertently got into wrong hands. Eventually, the video allegedly featuring the music diva having sex was leaked and it went viral. The controversy over the leaked tape eventually cost the singer an endorsement deal with Globacomm, as the telecom giant cancelled its deal with her.

Ronaldinho
A classic case of breaching an exclusivity-based contract. In 2012, Ronaldinho, the world-famous Brazilian footballer lost a $750,000 Coke sponsorship because he showed up to a press-conference nonchalantly drinking a Pepsi. Losing nearly a million dollars because of a drink that cost less than a dollar a couple of bucks.

Charlize Theron
Charlize Theron found herself in an even sticker situation when she substituted her endorsed product for a competitor’s. Designer Raymond Weil paid the model and actress for rights to her wrists for two years, so she could wear only his watches. Theron did not play by the rules though, and went to a press conference wearing a Dior watch. Gasp. That didn’t go down too well with Weil, who went onto seek £12 million in compensation.

Maria Sharapova
In March 2016, Maria Sharapova — then highest-paid female athlete in the world for more than a decade — shocked the tennis world when she failed a drug test after taking a banned substance. TAG Heuer, Porsche and Nike immediately terminated relations with Sharapova, who would eventually be suspended from playing for two years.

Tiger Woods
At least 90% of the $1.4 billion Tiger Woods has earned since his pro debut in 1996 came from endorsements. In 2010, a highly publicized affair along with a car crash and, eventually, a $100 million divorce led to all but one of his major blue-chip sponsors dropping him.

Finally

Despite the enormous benefits of celebrity and influencer endorsements, companies face equally great risks to partnering their brand or product with an individual. Scandal and controversy are difficult to predict and can damage a company’s reputation and sales. Transparency, quick thinking, understanding company values and aligning those values with brand messaging are crucial to managing unexpected controversies that come with celebrity and influencer endorsements.