When Scandal Engulfs a Celebrity Endorser

Description

Research has shown that firms tend to suffer financially when a celebrity endorser becomes mired in a scandal, but the literature to date has offered little practical guidance. A new study, involving 128 incidents that generated negative publicity, finds that firms taking no action after an event--the path most follow--generally do poorly. Its authors also discovered a surprise: Companies that engage with a situation and handle it well don't just stanch the bleeding but come out ahead. The study identifies four factors that play a significant role in public reaction to celebrity misbehavior and provides several clear takeaways for endorsers and firms alike.

Keywords

Advertising campaigns Crisis management Marketing Public opinion Public relations Scandals Shareholder relations