BOSTON ( MainStreet) -- For as long as there have been celebrities, there have been celebrity endorsements. Milton Berle introduced America to the mighty men of Texaco (working pumps from "Maine to Mexico"). Mean Joe Greene's spot for Coca-Cola ( KO) is considered a classic. O.J. Simpson dashed through airports for Hertz ( HTZ) long before he made a run for the border in a white Bronco. Using celebrities has been an effective tool for advertising and marketing efforts. Though perhaps naively so, consumers have tended to trust these familiar faces and transfer likability to things associated with them. In recent years, however, celebrity endorsements have become even more manipulative and, one could argue, sleazy. When it comes to taking shopping or financial cues from the rich and famous, buyer beware. The Federal Trade Commission cracked down on "mommy bloggers" who failed to disclose the free swag they collected for their glowing reviews. But, despite general guidelines for what crosses the line, celebrity tweets haven't been nearly as scrutinized by that agency or other official watchdogs. When 50 Cent hyped a headphone company, H&H Imports, on Twitter, what his 3.8 million followers didn't know is that it had more to do with his stock portfolio than the product. The penny stock's price spike earned him nearly $10 million, on paper at least. The Kardashian clan's Twitter feed is a steady stream of paid-for name dropping. Ashton Kutcher has been in hot water twice because of his promotional acumen. CBS slapped him on the wrist (ever so gently) when logo stickers for tech companies he invests in were stuck on a laptop and thereby prominent throughout a scene on his sitcom Two and a Half Men. When Details magazine had him "guest edit" an issue, he used the opportunity to pimp some of those same companies -- among them FlipBoard and Foursquare. The FTC was prompted to issue a statement (a tweet, actually) to tell critics they had no intention of looking into the matter. Sleazy, by definition, describes an endorsement deal made by pop star Ke$ha: For her "Get Sleazy" tour, she inked a deal with LifeStyles Condoms and the company went so far as to make a promotional line with her face on the wrapper (something that, with apologies to Woody Allen, might help more than thinking about baseball). Bob Eubanks, who used to host the The Newlywed Game, was in an pickle back in the '90s when his paid testimonial for a 900-number dating service was used to help bilk millions from investors (he was never blamed directly by investigators). Cybill Shepherd heeded the advice "take the money and run" when she took a paid gig as spokeswoman for the Beef Industry Council in 1987. It was later revealed that she was actually a vegetarian.
The problem with celebrity endorsements is twofold. First, companies can mask their own dubious propositions by letting a popular, trusted personality do the dirty work for them. The other issue is that reputable companies can't control their celebrity mouthpieces outside the soundstage. Tiger Woods' infidelity was a disaster for all involved with his "brand." Regardless of final legal dispositions, sports heroes Ben Roethlisberger and Kobe Bryant were still accused rapists, bad news for those banking on them at the time of allegations.
When it comes to commercials and endorsements, not all celebrities are created equal. A study released last year by advertising analysts at Ace Metrix, Celebrity Advertisements: Exposing a Myth of Advertising Effectiveness, tested more than 2,600 television ads over the course of 2010 and found less than 12% of ads using celebrities "exceeded a 10% lift versus average industry norms" -- in other words, benefited from the association -- and nearly 20% of celebrity ads yielded "negative lift scores." "This research proves unequivocally that, contrary to popular belief, the investment in a celebrity in TV advertising is very rarely worthwhile," CEO Peter Daboll said. The underperforming celebrities that year included Tiger Woods (23% less effective than average), Lance Armstrong, Kenny Mayne, Dale Earnhardt Jr. and Donald Trump. Celebrities who created the most "life" included, as one might expect, Oprah Winfrey and, more surprising, filmmaker Ed Burns and former Rocky nemesis Carl Weathers. Despite those findings, companies still flock to celebrities to help put a shine on their products and services, and the famous are often quite mercenary in their approach -- willing to risk reputation if the price is right. Here are 10 examples of celebrity endorsements that raised eyebrows, if not came across as flat-out sleazy.
|Pushing debit cards, gold coins and fried, fatty foods (as does Paula Deen, a recently revealed diabetic) is how some celebrities pay the bills.|
Even fans of conservative talk show host and author Glenn Beck would probably concede that he can be -- to put it mildly -- a bit of an alarmist. Among his many conspiracy theories and doomsday scenarios is a prediction of a total economic collapse, precipitated by the collapse of the U.S. dollar and hyperinflation that would put the billion-dollar bills of Zimbabwe to shame. But owning gold bullion isn't enough to save you. On multiple occasions, Beck warned his audience that the government, thanks to an order dating back to FDR, had the power to seize most gold from you if it so desired. Exempt from its clutches, however, are antique and collectible coins, he explained. So any survivalist worth their year's supply of Spam and bottled water knows only gold coins are worth stockpiling. Beck's talking points match up almost word-for-word with the sales pitch used by one of his ongoing sponsors, Goldline International, a company that also uses him as a paid endorser. On Nov. 1, Goldline executives and salespeople were charged with 19 criminal counts by the Santa Monica, Calif., City Attorney's Office, which worked with the Los Angeles County District Attorney's Office on the case. Founded in 1960, Goldline is based in Santa Monica and has more than 400 employees and annual sales exceeding $500 million. The complaint charged that "Goldline runs a bait-and-switch operation in which customers, seeking to invest in gold bullion, are switched to highly overpriced coins by using false and misleading claims." Among the tactics cited by investigators is "training salespeople to induce in customers fear of government confiscation of bullion and to tell customers that the overpriced coins were exempt from such confiscation." Sound familiar? (In fairness, there was a Depression-era order intended to stabilize the dollar and prevent a run on banks; only one prosecution ever resulted and it is debatable it could still be enforced, given the end of the gold standard). Among the alleged acts of false advertising: "stating that the European coins they were promoting could be 'liquidated privately'; offering gold bullion for sale, in commercials and on Goldline's Web site, with no intention of selling it; stating that bullion could be 'purchased online' with a button on
TV cooking show queen Paula Deen is renowned for her love of all things deep-fried and pushes unhealthy recipes soaked with butter and sugar, but kept her own battle with Type 2 diabetes a secret -- at least until drug company Novo Nordisk ( NVO) cut a big enough check for her to break her silence. That the revelation coincided with a deal to shill for the injectable prescription drug Victoza opened her up to criticism about the "unhealthy" fare she has cooked, served and taught throughout her career as a restaurateur and media personality. For those so bent out of shape, we might be inclined to offer two words: "portion control." Just because someone on television cooks with caloric abandon doesn't mean you have to eat it, and certainly not in excess. After all, Deen is a TV star, not a doctor. That's what we might have said, anyway, until it was revealed she was diagnosed three years ago. We, of course, don't know what Deen was thinking when she decided to accept the Victoza deal. But here's how it looks: She kept slinging bad-for-you food for years, despite knowing firsthand the potential folly of such a diet, and only decided to go public when a big enough check was written. The delay meant no distractions from her lucrative brand by being recast as a kale-eating, soy-drinking sellout. Let's make a comparison: The host of a TV show, well-known for being a heavy smoker, is diagnosed with lung cancer, but hides that fact and continues to keep promoting tobacco products. Then a drug company pays him handsomely to be the face of a new cancer drug and offer online advice, including "Don't worry, its fine to smoke just a few a day" as long as you use our product. From a PR perspective, Deen's deal has been a recipe for disaster.
There's a famous exchange, though probably apocryphal, attributed to Winston Churchill: "Madam, would you sleep with me for 5 million pounds?" he allegedly asked a socialite, who initially seemed to rather like the idea. Then he changed the offer to a mere five pound note. "What kind of woman do you think I am?" she snapped. "Madam, we've already established that," was the response. "Now we are haggling about the price." Regarding celebrities Will.i.am, P. Diddy, Lil John, Alicia Keys, Chris Brown, Kanye West, The Game, Mary J. Blige, Kim Kardashian, Macy Gray and Jamie Foxx, we may now understand that, for them, it was also about the price. In December, in the days before government officials pulled the plug on file-sharing service Megaupload on charges it facilitated piracy, the company released a promotional video with testimonials from these and other celebrities. In fairness, it is not known if they were paid, or how much. Amid spin control (after record labels were able to temporarily pull the video from YouTube) there were claims that not all of the featured performers authorized their inclusion. Barring editing trickery, the entertainers are certainly on camera, mentioning Megaupload by name. One wonders why they would think it was a good idea to align themselves with Kim Schmitz, the slobbish sleazebag whose disposable identities have included the name "Kim Dotcom." More importantly, how much did it cost to have them betray their colleagues in the entertainment industry? What did they think Megaupload was being used for? Fortune 500 companies using it to share documents among global offices? Far more likely is that traffic was split between people sharing porn and stealing media. Even if you argue that SOPA and other anti-piracy efforts go too far, think of it from the celebrity perspective. Every song or movie shared illegally takes money out of not only their pockets, but the pockets of many others in their industry. Maybe A-listers are rich enough not to care, but couldn't they be bothered to think about their colleagues?
When he hosted a talk show bearing his name in the 1990s, Montel William had a reputation for being a blunt, no-nonsense kind of guy. A Navy veteran, he portrayed himself as a man of honor and advocated for the oppressed, especially when it came to issues facing youths. He remains a popular motivational speaker and author, and post-talk show, Williams has lent his name to some admirable causes, including the Partnership for Prescription Assistance, an organization spearheaded by leading pharmaceutical companies that helps financially strapped patients get free or heavily discounted medications. Less laudable is his TV commercial appearances and Web site endorsements for businesses such as Money Mutual, a Las Vegas-based "payday" loan facilitator that works with more than 60 lenders throughout the country. On its Web site, there is a section called "Why is Montel Williams endorsing this site?" "Montel Williams has endorsed MoneyMutual to provide access to short-term cash loans to people who have no other alternatives," it says. "Montel takes pride in being able to provide people with information to help them live better physically, spiritually, financially and emotionally. Montel understands that people have unexpected and needed expenses ... sometimes difficult to pay due to lack of funds or credit. Rather than bounce a check, or receive late-payment penalties, Montel believes that a short-term loan from MoneyMutual's network of participating lenders can provide the immediate assistance to avoid costly fees." There are of course some who can responsibly take advantage of payday loans and understand the risk and costs associated with them. They can be a helpful financial tool. MoneyMutual, however, avoids stating directly what borrowers can expect to pay in fees and interest. "Since MoneyMutual is not a lender, we are not able to provide or advertise the actual terms, rates, annual percentage rates or fees associated with the loan you may receive," its site says. "The reason for this is that the terms, rates, APRs and fees vary from lender to lender." That could lead to a not-so-pleasant surprise for borrowers. The advocacy group Consumers Union, parent of Consumer Reports, has warned that short-term loans of this type have been found to require as much as $17.50 in fees for every $100 borrowed and the interest rates can amount as much as 911% for a one-week loan. Not all lenders may gouge to that degree, and many states have imposed caps and restrictions. Williams, as someone familiar with the daytime TV demographic, certainly knows that many of those targeted by the MoneyMutual ads are probably not home by choice. Out of work, ill or elderly, they are the folks most likely to be looking for an emergency fix for their finances and the ones most likely to dig even more of a deep, expensive hole. It is all the more more craven given that the inspirational, you-can-do-it message Williams has built a career on is now used to push a fast-money strategy that could do long-term damage if not used responsibly.
As a football coach -- especially as the brash, good ol' boy who led the Miami Hurricanes and Dallas Cowboys -- Jimmy Johnson was never shy about voicing his opinions. As a Fox ( NWS) Network football analyst, he continues to be an opinionated, polarizing figure. Apparently, what allows him to be so colorful is a lack of shame. How else to explain his endorsement deal with ExtenZe, an herbal supplement billed as "natural male enhancement." The ads use various euphemisms to get around actually saying "larger penis." That might have something to do with a 2006 fine of $300,000 levied by the Orange County, Calif., District Attorney's Office for false advertising, notable an inability to support claims it could grow the appendage in question by nearly a third its size. Even an ingredient known to botanists as "horny goat weed" may not be able to live up to that promise. Despite the occasional class-action suit and the embarrassment most of us would feel to be telling America we are a proud user of such a supplement, Johnson seems at ease with his role. He has described himself as an ""an unabashed user" and, in one commercial boasts: "Most men want to perform the best they can in just about everything ... Go long with ExtenZe. I do." Some things just cannot be unseen or unheard.
When they are not pimping out their tweets, the Kardashian family is apparently always on the hunt for unique business opportunities to fit their brand. So, of course, they turned to the financial services industry. The late 2010 launch of the Kardashian Kard, a prepaid debit card bearing the image of the three reality-show sisters, was a disaster from the start and a move even these sirens of sleaze should have been smart enough to avoid. Produced by Minnesota-based University National Bank, the card was notable for having an upfront fee of $59.95 for six months and $99.95 for a dozen. After that there would be a $7.95 monthly fee and a host of other charges (a $1 fee to check the balance, $1.50 to speak with customer service, $6 to cancel the card). "The family is marketing a dangerous financial fantasy," Connecticut Attorney General Richard Blumenthal (now a U.S. senator) said in a statement at the time of the card's launch. "Ironically, the Kardashian Kard will distance consumers from the financial abundance key to the Kardashian's lifestyle. Consumers lose money before they can use it with this card." The Kardashians were shocked, shocked, I tell ya. As negative news stories mounted, their lawyer drafted the following bit of spin to terminate the whole arrangement (surely disappointing the whole 250 people who'd actually signed up by that time): "The Kardashians have worked extremely long and hard to create a positive public persona that appeals to everyone, particularly young adults," he wrote in a letter to the bank that was conveniently copied to Blumenthal. "They have been successful in doing so because they are recognized as honest, ethical and fun-loving individuals who are kind and caring to others. Unfortunately, the negative spotlight turned on the Kardashians as a result of the attorney general's comments and actions threatens everything for which they have worked." So, to recap, the girls and their "people" jump on a chance at a quick buck, take heat, renege on that agreement and then can't resist a final sarcastic dig at a public official for having ... OMG ... the audacity to point out their name was on a product ripping people off with fees more than 10 times the national average.
Hulk Hogan, perhaps the most famous pro wrestler of all time, has an undeniable blue-collar appeal. Ditto for his co-star in recent Rent-A-Center commercials, Troy Aikman, former quarterback of the Dallas Cowboys. We are not going to pretend athletes -- real or make-believe -- should be held up as having particularly altruistic motivations. But still we have to wonder why, given all the endorsement opportunities they might have, they aren't more picky about the businesses they are associated with. Rent-A-Center is hardly a fly-by-night operation. In business since 1986, it owns and operates more than 3,000 stores in 50 states, Washington, D.C., Canada, and Puerto Rico. What gets the goat of many consumer advocates, however, is that its business model -- get that TV, computer or sofa you want for easy weekly payments -- encourages people to impulse-buy their way to a very bad loan, one with a triple-digit APR. That big-screen TV could end up costing you twice as much at the end of a contract, and that's not even including depreciation and the fact that better, less-expensive models may hit shelves before it's paid off. If it gets paid off. The company's own data show only one-fourth of customers actually complete a purchase. Last year, Rent-A-Center agreed to a settlement with the attorney general of Washington state over its collection tactics. The company denied the state's allegations but agreed to a list of restrictions on its practices. Among the accusations were "cussing at customers, pounding on doors, peering in windows and threatening arrest." The state presented testimony from customers who said employees seeking to collect on debt went so far as to attempt to kick in the door of a couple's home and told an 11-year-old autistic girl being baby-sat that her mom could be jailed for theft. If you need a couch for two weeks between moves, great. But the rent-to-own options are financially reckless and targeted to a low-income audience. And that's something Hogan and Aikman, successful businessmen, should know better than to push on their fan base.
Most people wouldn't want their doctor to prescribe a medication in which they have a financial interest. Sure, the doctor may have faith in that particular pill and be concerned only about your well-being, but the appearance of a conflict of interest is troubling. That, in a nutshell, is why so many folks are lambasting personal finance expert/author/TV personality Suze Orman. Orman is another celebrity promoting a prepaid debit card. The product, The Approved Prepaid MasterCard ( MA), does, in her defense, have lower fees than many competitors -- $3 initially, $3 a month, $2 to use ATMs and roughly $3.50 to reload it via Western Union ( WU) or a similar service. Included is "unlimited free online access" to TransUnion credit scores, reports and monitoring for one year. There is also something called "The Credit Project" -- the ability to anonymously share transaction information with TransUnion ( TRUN) so "they may help us understand whether including this data in your credit report would impact your access to credit products." What that means, exactly, for cardholders is fairly vague. "It is my hope that this data sharing will show that responsible use of The Approved Card can help predict those who deserve credit for managing their money well and spending responsibly," Orman says. The marketing materials make this whole offering seem downright magical. "The Approved Card isn't just another financial product or a normal prepaid card," a press release reads, with oppressive use of the shift key and caps lock. "It's the start of a financial revolution to enable Americans to empower themselves. Orman, the longtime financial crusader, is inviting consumers to join her 'PEOPLE FIRST' movement with her Approved Card. Suze didn't just endorse this card -- SHE CREATED IT from the ground up to change the way people think about and use their cash." Forgetting, perhaps, that there are these things called "savings accounts," the card is also touted as an ideal way to create an emergency fund. So back to that doctor analogy. The card seems fair enough, really, as such things go. Not a great deal, but not a horrible one either. It just seems wrong for a person so many people look to for financial advice to profit by joining forces with a credit card company and selling a branded financial product. The touted benefits -- alternating between vagueness and hyperbole -- do little to reduce the bad taste.
Burt Bacharach's occasional songbird helped secure a place in history for two of the sleaziest business trends in modern times: pay-per-minute phone lines and late-night infomercials. Warwick was the original face of The Psychic Friends Network throughout most of the 1990s. For about $3.99 a minute, callers to a "1-900" line were connected to purportedly genuine psychics available to offer them answers, advice and affirmation. Two predictions that the team of soothsayers seem to have missed: that her cousin, Whitney Houston, should be kept away from any and all things related to either Bobby Brown and crack; and that by 1998 the company would go bankrupt. That bankruptcy came after its owner, Inphomation Communications, racked up $26 million in liabilities compared with a mere $1.2 million in assets. The service is now back, but without Warwick. Focused more on online conferencing than traditional phone lines, the new ownership had initially tapped actress Vivica A. Fox as its celebrity endorser. But, in a move its prognosticators also failed to see coming, Fox later claimed that use of all those commercials, testimonials and headshots she shot, many of which had already aired, were not "authorized." Perhaps a crystal ball revealed that the gig was a credibility-shredding way to grab a paycheck. Perhaps, back in the day, Warwick really was a true believer and not just an accomplice to the hundreds of dollars conned out of naive, desperate callers. The new site does, after all, promise that, "All of our psychics undergo a rigid screening to identify those who really have the psychic gift, as well as to find those psychics who truly care for the well-being of the clients, for whom they do their readings." Our guess, however, is that it was bank statements, not minds, that were typically being read.
No offense to Lil Wayne, but if we are skeptical of a debit card offered by Suze Orman there's little chance we'll plunk our cash into the one he peddles. His Young Money Card, issued by MetaBank, includes a variety of interesting features: direct deposit, online bill pay, online budgeting tools, the ability to reload at retail locations throughout the nation, a cash-back partnership with the Ebates Web site; and, perhaps appropriate given Lil Wayne's drug-related troubles with the law, a "prescription, imaging and lab test savings card." A portion of every card sold will benefit nonprofit organizations such as Lil Wayne's One Family Foundation. Ah yes, there are also fees. The card's purchase price is $6.95 with a $3.95 monthly maintenance fee. ATM withdrawals cost $2 and the reload fee is $4.95. This week, Comedian George Lopez announced that he too has a debit card deal: a partnership with Mango Financial's Mango Prepaid Card. "This is not only an opportunity to promote a great company with great products, but also a chance to make a difference in people's lives," Lopez says in a statement. "My grandparents, a factory worker and construction worker, who raised me, taught me the importance of hard work and financial discipline to reach my goals. I'm proud to support a company that has made it easy and affordable for people to manage and save their money to help them realize their goals." The problem with Lil Wayne, and we'll add in Lopez and Orman as well, is that celebrities seem intent on selling fee-loaded debit cards and making it sound like they are doing society a favor. For Lil Wayne especially, his card is aimed squarely at people who otherwise lack credit or, perhaps, even a bank account. Making money at their expense, under the pretense of helping them, is as hypocritical as it is sleazy. By the way, if you ever run into hip-hop mogul, philanthropist and founder of the RushCard Russell Simmons, don't call him a "celebrity endorser." In an "open letter" issued to the financial press last month, he took umbrage to such a description. "In recent weeks, coverage of prepaid debit cards launched by Suze Orman and Lil Wayne has repeatedly portrayed me as a 'celebrity endorser,' he wrote. "Some of these stories have gone so far as to depict my RushCard business in the same light as the ill-fated Kardasian Kard. The truth is, eight years ago I invested millions of dollars, putting my reputation on the line to found UniRush LLC. I created the first prepaid debit card account, requiring no linkages whatsoever to a consumer checking account ... I created this industry because my customers had been left behind by the banking industry." "What did I do to earn the title of 'celebrity endorser'?" he asked. "Richard Branson endlessly and lovingly promotes his airline's cellphones, cable channels and spaceships, as he once did his retail and music empires; is he a 'celebrity endorser'? How about Mark Zuckerberg, the 'celebrity endorser' of Facebook? Success certainly breeds celebrity, as it has for Branson and Zuckerberg. Yet neither of these astute businessmen is categorized as a celebrity endorser. I submit this is because each is an innovator and a creator, having taken thousands of risks and enduring the pitfalls that trailblazers brazenly face. Just as I did, when I created an industry with an uncertain business model and no path to earning a reasonable return." -- Written by Joe Mont in Boston. >To contact the writer of this article, click here: Joe Mont. >To follow the writer on Twitter, go to http://twitter.com/josephmont. >To submit a news tip, email: email@example.com.
Twitter and become a fan on Facebook.