Celebrities as endorsers

Why advertising companies and their clients continue to use celebrities as product or service endorsers is a practice that continues to bother me?

Do people really believe that their hair will be smooth, shiny and untangled by using a shampoo being endorsed by a celebrity who obviously had her hair go through the works to achieve that look?

Are consumers that naïve to think that by using a particular brand of lotion, the beautiful, young, and mestiza actress was able to have her soft, smooth, white complexion? But that brand of lotion just came out of the market so how can she have attained her complexion using it? Now I’m confused.

It’s true that having good-looking celebrity endorsers can make one look at a billboard or the television or magazine. But to believe that the celebrity actually uses it and that it works for him or her and therefore will work for you and me?

A recent survey conducted by market research firm Synergy Business Consultancy revealed that celebrity endorsers continue to be a potent influencer in consumer purchases, with 67 percent of the respondents having bought a product or availed of a service due to a celebrity endorser.

Topping the most credible celebrity endorsers this year are Manny Pacquiao, Venus Raj and Vicky Belo.

The respondents are comprised of 1,000 males and females, aged 15-60 years old, from all socio-economic classes in Metro Manila. The study was conducted from September to October 2010.

According to the survey, this year, Filipino boxing champion Manny Pacquiao continues to extend his influence not only to professional boxing but also to consumers. Just like in Synergy’s 2009 study, 47 percent of respondents believe that he is a credible endorser.

Following Pacquiao in the list is Vicky Belo, whose credibility rose seven percent from 2009. Kris Aquino made it to the top 10 this year, with 15 percent of respondents believing the host as an endorser.

Synergy managing director Germaine Reyes has a very interesting take on the survey results. Reyes says that Belo and Aquino, who were both embroiled in a controversy, were perceived to be the aggrieved party. Moral lesson, if you are in a controversy, it pays to be the aggrieved party, since being considered the underdog may be a good boost to one’s credibility as an endorser. Championing the underdog is a very Filipino trait, Reyes said.

The same study also revealed that telenovelas prove to be a strong factor for building a credible endorser, as Angel Locsin, Gretchen Barretto, Angel Aquino, Derek Ramsey, and Cristine Reyes captured people’s attention this year. But unlike those who figured in actual controversies, consumers do not distinguish between the good guys and the villains in telenovelas when it comes to the actors/actresses credibility as endorsers.

But not all celebrities can effectively sell all products and services. In personal care products and services, only 31 percent of respondents believe that celebrities, socialites, or models make effective endorsers. Common people who have experienced using the product hold more credibility to endorse the brand compared to celebrities, according to 44 percent of respondents.

I am bothered by the last point. How do we really know that these ‘common tao’ actually experienced using the product? But I can understand how some people can see themselves in these kind of endorsers and therefore can relate to them?

Ultimately, products or services that are “recommended by professionals” and “clinically-proven or dermatologically-tested” prove most effective in endorsing personal care products and services, the survey adds.

There is therefore no single winning formula when it comes to choosing endorsers. Reyes suggests that resort to using celebrity endorsers must be understood in the context of product category, category development, and how established the brand is in that category. 

And of course, getting a consumer to try using a particular product or service is one thing. Getting him or her to stick to it is another.

A still raging controversy

Home Guaranty Corp. (HGC) president Manuel Sanchez recently wrote us about how he welcomes the Ombudsman’s decision dismissing the case filed by one Jerome Canlas against several officers of the HGC for their alleged violation of the anti-graft and corrupt practices act.

According to Sanchez, the decision validates the continuing position of HGC that it has not committed any crime nor has it been remiss in its duty as honest stewards of the government’s assets.

He said he hopes that the same decision would finally put to rest any questions or doubt regarding the legality and soundness of HGC’s act of selling two of its real properties located in the Manila Harbour Centre Industrial Area in favor of La Paz Milling Corp.

According to Canlas, HGC sold the two properties at prices much lower than market price, to the disadvantage of government.

Now let’s go to another still raging and related controversy, and that is the efforts by Reghis Romero-led R-II Builders to collect around P1.8 billion from government in connection with the Smokey Mountain project.

It is being claimed by R-II’s adversaries that the company, as early as eight years ago, had already been paid in full the P659. 3 million it had invested in the P4.7 billion project Tondo slum project.

The payment was reportedly approval signed in 2002 by HGC president Gonzalo Bongolan and National Housing Authority representative Arthur Cabantac.

Of the P659.3 million then payable to R-II, the P145.9 million advances to the contractor for the construction of permanent housing in the reclaimed 79 hectares of the Smokey Mountain dumpsite was deducted. The remaining P513.4 million was then paid R-II as follows: P255 million worth of property inside the Manila Harbor Center and P258.4 million in common shares of the Harbour Centre Port Terminal, Inc.

R-II’s adversaries are now saying that the total debt owed R-II by the Smokey Mountain Asset Pool, which had been turned over to HGC, is already zero as of June 2002, and therefore, the collection case filed by R-II against HGC before the Manila Regional Trial Court has no basis.

Based on reports, R-II wants to be paid P1.8 billion more as “residual value,” claiming that it would have earned that much more had the government not cancelled their contract.

They say that government cancelled the contract because R-II did not have the financial capability to perform its obligations under the joint venture it undertook with NHA to reclaim 79 hectares of the Smokey Mountain dumpsite in Manila on which low-cost housing for 2,600 families was supposed to be built.

This they said is also the reason why the Social Security System, Government Service Insurance System and the Overseas Workers Welfare Administration, among other government agencies, were directed to cough up the P4.1 billion in loans which HGC guaranteed.

These funds were pooled under the Smokey Mountain Asset Pool or SMAP, which then declared itself in default and turned over the responsibility to guarantor HGC when SMAP could no longer reimburse the funding sources.

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