Matching with the Stars: What Determines Celebrity Endorsement Contract Formation?

Cesar Zamudio
2014 Social Science Research Network  
Celebrity endorsement research studies how the characteristics of firms and celebrities featured in promotional campaigns influence consumer attitudes and firm value. Before these campaigns are launched, firms and celebrities first negotiate at length to sign a celebrity endorsement contract. Current research has not investigated what determines the formation of these contractsthus, firms lack advice as to their chances of landing a contract with their ideal celebrity. This article fills this
more » ... p in the literature. Using two-sided matching theory, I conceptualize the celebrity endorsement negotiation process as a two-sided matching market, and develop an empirical model of endorsement partner selection that allows extant theoretical models -the match-up hypothesis, and meaning transfer theory-to be tested in the context of firms' and celebrities' mutual choices. The model is estimated using a dataset of 120 endorsement contracts in the beauty industry. Findings suggest that brand personality is a major driver of endorsement partnerships and that recognition -celebrities' presence in the entertainment industry-moderates how appealing different contracts may be. The results of this article serve as a blueprint for firms to determine their likelihood of landing a contract with different types of celebrities.
doi:10.2139/ssrn.2417731 fatcat:p5dkkwavvfg3nnsfna42peswiy