“He who represents himself has a fool for a client” – Abraham Lincoln
President Lincoln’s quote is true in a court of law, yet is it true in the marketing world with celebrities?
Many marketing executives believe it is as easy as calling an agent and negotiating a deal similar to any other project they might work on. Unfortunately, this mind set is hazardous to a marketing budget and hiring the celebrity a brand wants.
If you or your brand is involved in litigation with thousands or millions of dollars at stake, do you represent yourself, or do you hire a litigation attorney who specializes? When your company seeks a new senior executive, does it scan the want ads or hire an executive search firm who specializes in your industry?
Even when companies work on specific projects, expert consultants are frequently used. With any celebrity endorsement, how many companies have essential inside information on competitive conflicts, other contract fees, and their fair market value?
The answers are obvious, so why do brand marketers continue to personally negotiate celebrity contracts?
In many cases, the lure to negotiate and ultimately befriend a star is irresistible. Sometimes this “star-blinded” marketer assumes negotiating with an agent should be straight forward and even is some cases, easy.
Negotiating directly with celebrity agents without knowing the fair market value and estimated fees for other current contracts grossly exposes marketers to serious problems, especially overpaying. The money issue then turns into the question of perceived value versus actual value, not a very good point to be at in the decision-making process.
Why would it cost me more money to negotiate with a celebrity directly?
Let me answer with the following real example:
One ex-NFL Pro Bowl quarterback was paid $500,000 for a one-year campaign by an ad agency representing a new client eager to break into the sports industry. Why did the client overpay by up to $375,00.00? Because the agent played hardball and gave them a take-it-or-leave-it ultimatum and the client was afraid that all similar names would be as expensive. Unfortunately for the client, the athlete had signed another spokesperson deal within the year for $375,000 less less than what the eager company paid.
Not knowing fair market value is dangerous and could even cost a brand its first choice. No one should settle for second, third or even fifth choice and risk not meeting brand objectives.
So what is the best way to proceed?
With billions of dollars spent on celebrity endorsements annually, it will remain a fixture in mainstream advertising. Yet, even as the task becomes more daunting with ad budgets and sales revenues at stake, many marketers continue to blindly negotiate with celebrity agents. To avoid this trap, many brands use an expert to step up to the plate.