Numbers are not everything when it comes to celebrity endorsements and influencer marketing. According to a new study from data-driven research firm Spotted, of the $206 billion spent on advertising in the U.S. each year, “fashion and retail is the largest-spending industry at 22 percent or $43 billion per year.” Of that $43 billion figure, “a large portion is allocated towards celebrity partnerships and campaigns,” which come with real risk factors for brands, per Spotted.
The Spotted study not only calls attention to the serious risks that brands subject themselves to when bringing a famous face on board to promote their products, it ranks some of the world’s most famous figures in terms of “riskiness.” Spotted assigns a “risk score” to celebrities by considering their track record of offensive behavior/public scandals, their political views, and the time frame for which the individual was able to bounce back from instances of bad publicity.
With this in mind, Kim Kardashian, with her 115 million-plus Instagram followers, is the “riskiest” name on Spotted’s list. The Boston-based firm cites the reality star-slash-beauty entrepreneur’s “multiple social media controversies, including her defense of makeup vlogger Jeffree Star’s racist comments in 2017 and the sexy Instagram photo Kardashian recently shared that was snapped by her five-year-old daughter, North West,” as constituting “inappropriate public behavior,” according to the New York Post.
Spotted also name-checks Kendall Jenner and model Hailey Baldwin as ranking among the top 5 “riskiest” celebrity endorsers, as well as Italian fashion brand Versace. Fashionista notes that “Versace’s celebrity strategy is considered the worst, according to Spotted, due to a number of ‘very weak partnerships.’”
Add to this Spotted’s finding that “Versace’s partnerships are characterized by high levels of risk, with their highest endorsement risk deal being in the 88th percentile.”
While fashion brands and most consumer goods brands, more generally, are loathe to remove famous figures from their ad efforts, the rising risk associated with famous ambassadors has not been lost on brands’ legal teams. On the heels of scandals involving big-name creative directors, Hollywood stars, and digitally native influencers, and in light of the ever-rising risk that comes with social media and the speed with which information can be spread in the digital age, brands are going to great lengths to protect themselves by way of stringent contract clauses that enable them to swiftly and cost-effectively ties with their ambassadors should things go south for reasons tied to the individual’s behavior.
Read up on these important contractual provisions – called morals clauses – right here.