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Celebrity Endorsements

November 26, 2008

Companies frequently sign celebrities to help endorse their products, and MLM companies are no exception. When I was in the business, Amway used to sell a product called the Shaq Bar, a snack bar with the image of Shaquille O’Neal on the box. At the time, he played for the Orlando Magic which is owned to this day by the DeVos family (founders of Amway). I’d like to think the Shaq bar was discontinued because it tasted so bad, but it’s probably because Shaq left to play for the Lakers.

Lately, Amway has signed on more celebrities to assist in its marketing efforts: Ronaldinho and the AC Milan soccer team for Nutrilite, Sandra Bullock for Artistry, and most recently, John Tesh and Connie Selleca. In addition, they are sponoring a number of high-profile events such as the Tina Turner tour, as well as pumping millions of dollars into print, web, and television advertising. I was always told that the IBOs were such good marketers that Amway didn’t need to market through traditional means, so why the big change all of the sudden? On the MonaVie front, the purple juice is being hawked by the Boston Red Sox and the Cannondale Bike Racing Team.

What does each party get out of the deal? For celebrities, signing an endorsement deal can mean big money, not to mention free products for the lifetime of their contract. The company gets the big-name with which it can use to say, “Hey, so-and-so uses our products, so you should too!”

Does the fact that your favorite television, movie, or sports star endorses a company legitimize that company in your eyes and make you more likely to buy from the its products? Supporters of Amway are quick to say that if Amway were a scam, why is it that they have the support of the business community and celebrities?

At the end of the day, I think it’s about money, pure and simple. “You help me, and I’ll help you,” is the way many of these deals work. As long as each party doesn’t get into trouble, they’ll continue the relationship. Sometimes, however, these business deals go bad. When celebrities get into trouble with the law, companies are quick to cut the deal, as we’ve seen with Michael Vick and Marion Jones. It works in reverse too. This past week, GM/Buick announced that they were cancelling the endorsement deal with Tiger Woods. I wonder if the cancellation was actually initiated on Woods’ behalf, seeing that the automotive industry is in such dire straits.

As for Amway, I recall them having a deal with MCI and even starting up a deal with Enron in the late 90s. Diamonds would say on stage how one day you would be able to get all of your utilities through Amway: gas, electric, phone, and Internet. Then, without much warning or explanation, the Enron deal was cancelled. For Amway, that was probably a very good move, as we all know how the Enron saga eventually turned out.

What are your thoughts on celebrity endorsements?

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8 Comments leave one →
  1. Joecool permalink
    November 26, 2008 12:56 pm

    I believe the big difference is that companies such as Gatorade, or Nikes, pay guys like Michael Jordan or Tiger Woods, because they want their audience to drink gatorade or buy Nike golf equipment.

    Quixtar’s situation is different because their product is not sold in stores. Thus their paid endorsements serve a twofold effect. I believe Quixtar wants customers to buy their stuff, but the majority of quixtar customers are IBOs, who don’t need to be convinced. But then you have the IBOs talking about how so and so endorses Nutrilite or Quixtar so the quixtar business must be a good opprtunity!

    So the endorsement, while it may be great for quixtar, doesn’t do much for ibofightback enterprises, or whatever an IBO calls their business.

  2. November 26, 2008 6:20 pm

    It tries to lend respectability to a scheme obviously. I know that Amway was very disappointed about the poor showing of their paid athletes in the recent Olympics. Just as I predicted, they didn’t get much mileage out of that bad situation. Every time they get brought up they get a black eye. Of course, IBO fight back would probably eat peanuts out of their pooh if he could find get at it?

  3. November 26, 2008 6:55 pm

    Enron? I don’t recall Amway being in negotiations with Enron. Amthrax, would you mind directing me to your source on this? Thanks!

  4. November 26, 2008 7:21 pm

    Bridgett – The proposed Enron deal happened during my time in Amway, so that would be between 1997 and 1999. I did a quick search on Google and found the following links tying the two companies together then:

    http://tinyurl.com/5p7kbn

    http://tinyurl.com/6xw6rk

    http://www.pur.com/pubs/2953.cfm

    http://tinyurl.com/5ucm4z

    My personal recollection is that this was discussed on at least one occasion during a Major Conference. I’m sure there are other former IBOs from that time which can corroborate my experience.

  5. November 26, 2008 10:10 pm

    Thanks Amthrax.

    Two things:

    1) Are there any mainstream news sources which talk about these negotitations? Wondering how close they were to an agreement, or was it more speculation.

    2) When you say “major conference”, was this an event organized and sponsored by Amway Corporation?

    Thanks! 🙂

  6. November 27, 2008 12:42 am

    1) At the time, energy was undergoing deregulation in California, so there were lots of articles about companies like Enron coming in to provide utilities services. I don’t recall reading anything about Amway and Enron in the newspaper, however. I would think that the two companies were close to an agreement or had signed something, since the Diamonds were talking about it on stage.

    2) Major conference = INA (my LOS). I never attended any corporate-sponsored event (we were never told of these in fact). An Amway representative might have been present, however, to provide information at the INA conference.

  7. November 27, 2008 10:37 am

    Amthrax…

    It’s kind of harder to debunk the truth isn’t it. Amway has so many bad affiliations regardless. They were funneling political contributions to now exposed sexual deviant Mark Foley. They also pushed for the the US invasion of Iraq while a blackwater relative made a killing off of that development. Amway is the people’s Enron. A vast pyramid scheme known as the American Scam world wide.

    Bridgett, aren’t you an Amway apologist? What about the financial holocaust girl? For you to advocate such a scheme as being a good opportunity is conspiracy to defraud isn’t it? Legitimate business? Hardly.

  8. Joecool permalink
    November 28, 2008 10:15 am

    It is interesting when IBOs speak of affiliates and parter stores, they either don’t know or conveniently forget that Amway had ties to Enron and Worldcom (formerly MCI).

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