Factors, Influences, and Pricing in Celebrity Deals

• Author: Weston Anson
• Pages: 203-213

203

Factors, Influences, and

Pricing in Celebrity Deals

Everyone reading this book knows that pricing can vary widely from one celebrity deal

to another—for example, from a $10,000 payment for a Heidi Montag personal appear-

ance to $100,000 for Paris Hilton to do the same thing. Why? What are the key factors

that influence these pricing disparities? Well, the answers are obvious, and the ones

that are most obvious are, first, celebrity status (A-list, B-list, C-list, or D-list celebrity).

Second is notoriety, and notoriety can be both of the positive kind and the less positive,

as Paris Hilton and others have proven. Third is compatibility: compatibility with the

brand and product. Finally, as we pointed out earlier, celebrities understand that they

too are brands, and while we tire of hearing of the name Kardashian, there’s no better

example of emerging celebrities who have turned themselves into brands.

The first key thought about an ROP endorsement deal is that it is the union of two

brands. One can almost think of it like a marriage. Therefore, compatibility between the

two brands is critical—compatibility in the sense of consumer attitudes toward the two

brands, and consumer expectations from the two brands. This is because the third party

to this marriage between the celebrity brand and the brand that is being endorsed is

the consumer. The final key factor is that the celebrity not continuously engage in neg-

ative publicity. Although today’s society will tolerate a one-time sex tape scandal from

a Paris Hilton, or a punch-up between a photographer and Brad Pitt, multiple incidents

like these will over the near term cause substantial problems for the celebrity and can

grossly affect deal terms and pricing.

I. Celebrity Research

The second key thought is: What are the mileposts for pricing structures? For example,

in golf, does winning the Masters bring a guarantee of a $25 million deal? The answer

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