Papa John’s Celebrity Endorsement Move

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on Jul 5, 2019 9:00:00 AM
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If you watch TV, it’s possible you see some celebrity endorsements just about every day. From Julia Robert’s smiling face promoting Lancome’s La Vie Est Belle Perfume to Matthew McConaughey driving a Lincoln while engaged in philosophical musings, the famous are making millions touting products and services.

But is this marketing strategy cost effective?

Papa John’s is counting on it.

Papa John’s Latest Celebrity Endorsement

This pizza chain has faced its share of shadows. When the once founder and CEO, John Schnatter, decided to enter the fray regarding football player’s kneeling during the anthem, and announced his disappointment with the NFL for allowing players to protest in this way, the backlash was severe. While there were those that supported Schnatter’s opinion, others vowed to boycott the pizza chain.

In the end, Schnatter stepped down as CEO and the pizza chain ended its NFL sponsorship deal.

Now, they’re counting on Shaquille O’Neal, the former and famous NBA center, to help reinvent, or at least overshadow, the past political faux pas, and help the company make a comeback. According to Restaurant Business, the deal comes with a price tag of around $8.5 million which includes over $4 million in cash and over 87,000 shares in their stock which is currently worth about $4.4 million.

In exchange, Shaq invested in some of their Atlanta locations and has agreed to use his social media accounts to promote the challenged chain. He’ll also be making some public appearances and has agreed to some ads that will feature Shaq and Papa John’s.

The climb out of their present fall from grace will not be an easy one. Papa John’s same-store sales saw a 7.3 percent decline in 2018. With the cost that comes with the famous, one has to wonder: Is it worth the price?

Are Celebrity Endorsements Cost Effective?

A meta-analysis of 46 studies on the effectiveness of celebrity endorsements found “a zero effect when averaging across all studies.” They also found that those with the greatest success involved “a male actor that matches the endorsed object and expresses his endorsement implicitly.”

And then, of course, there are those high-profile celebrity endorsements that have seriously backfired.

One of the most remembered in the restaurant industry is Subway’s Jared Fogle—the famous spokesperson who lost an incredible amount of weight by eating two Subway sandwiches every day and exercising more. He was a popular household name until 2015 when he was charged with having sex with minors and being in possession of child pornography. He’s now serving jail time with a possible release date in 2029.

For those of you that are willing to put your reputation on the line, there may be a cheaper, even no-charge approach to obtaining a celebrity endorsement.

It takes a little chutzpah, but for those of you with a touch of assertiveness and a little sales savvy, asking celebrities to try your fare may lead to a complimentary endorsement. An example of this was reported in Forbes which accounted how Kevin Bath, co-founder of JimJams—a company that produces healthy spreads—obtained several celebrity endorsements without paying a dime. How did he do this? On one occasion, he approached Davina McCall at the BBC Good Food Show during her book signing and shared his chocolate spread which has 83 percent less sugar than other brands. He then tweeted her the following day, asking how her children liked the spread. Her reply, which included the word, “loved it!” led to a dramatic rise in sales that same week. Others have contacted an actor’s agent to determine if they would be willing to accept a gift. A complimentary signature dish, anyone?

There is another way to obtain your share of leads from those with mass influence. Known as influencer marketing, it is today’s equivalent of a celebrity endorsement.  

A social media influencer is someone with a large following—one that trusts their recommendations and one that you can tap into when they mention your establishment. Just one post can lead to a packed house. So, just how do you find these mighty marketers? That topic is worthy of a blog unto itself, which we just happen to have here. Let’s leave you with an example, as reported in Forbes, of just what an influencer can produce for your business.

After a foodie’s Instagram account posted a picture of Springbone Kitchen’s strawberry rhubarb ice cream to its hundreds of thousands of followers, the Manhattan restaurant saw a sudden surge in new customers. This was not a synchronistic or accidental occurrence. One of the owners of Springbone, Sam Eckstein, developed his social media marketing strategy by focusing on Instagram influencers.

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Topics: Data Intelligence, marketing, Customer

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