American Marketing Association interviewed Hollywood Branded’s CEO Stacy Jones on celebrity red carpet brand partnerships, and what the value truly is.
What’s the ROI on Red Carpet Product Placement?
What? The Oscars provide great visibility but little short-term return for fashion houses.
So what? The value in making a red carpet appearance can take a decade to be realized as brands build relevance and maintain aspirational appeal.
Now what? Aspirtational brands need to find ambassadors to a millennial audience whose purchasing power will come to fruition in the next 10-20 years.
Fashion houses likely won’t see a surge in short-term sales, but celebrity endorsements build long-term brand relevance and maintain aspirational status
“The question though is, there is a very small percentage of the world that can afford these designers. But it’s important for these brands to have this word-of-mouth appeal to keep them aspirational,” Jones says. Walk into Bergdorf Goodman, and it’s unlikely you’ll fetch an evening gown for less than $7,000—you might spend as much as $32,000—but red carpet dresses are often custom and won’t be found on the rack anyway.
Fashion source Racked.com took a quantitative look at the payoff for designers who dress celebrities on red carpets. This site found mixed correlations between the number of times a fashion house was featured on a red carpet and sales in the corresponding year. For example, Valentino, one of the most-worn designers, dressed 11 celebrities in 2013 and saw revenues nearly double in the same year. In 2015, however, after dressing only two celebs, the fashion house still turned a 36% increase in revenue.
The strategy behind which celebrities fashion houses align themselves with is changing to maintain relevance to the millennial generation, says Jones. “You see the Kardashians on the runways of Paris, and years ago that would have been unheard of,” she offers as an example. “Times have changed. Designers know that the younger millennial celebrity is a massive influence on a market that, again, they’re not looking at necessarily tomorrow, but they’re looking at a decade down the line that they’re going to need to be in partnership with, appreciated by and in aspiration to.”
The Business of Bling
Those campaigns can be 12-36 month partnerships in which a celebrity can become the face of a brand. But even getting a watch on the wrist of an a-list celebrity for a single evening can fetch anywhere from $50,000-$250,000.