Have you signed up for a Chase Bank credit card solely because comedian Kevin Hart endorsed doing so? Bought a bag of Tostitos because you saw a commercial featuring Dan Levy holding a bag? Let Danny Devito’s appearances in Jersey Mike’s ads be the sole motivator for your lunch selection?
Yeah, you aren’t alone in answering no to those questions. Consumer research has consistently shown that celebrity endorsements of products and services make little if any difference in actual behavior. Regardless, businesses like real-money online casinos continue to throw money at the strategy like the problem is that the dead horse hasn’t been beaten enough yet.
Recently, regulators in Canada’s most populous province have done something about that, which governing bodies in various United States jurisdictions should at least consider. In review of how often celebrity relationships with brands do more harm than good, regulators would effectively be saving gambling companies from themselves.
What the surveys say about the impact of celebrity endorsements
The message to businesses from researchers on the effectiveness of celebrity endorsements on actual spending patterns has been clear and consistent; it’s a waste of resources.
Research does show that incorporating celebrities into advertising can make such advertising memorable. However, there is a significant disconnect between being familiar with advertising materials and actually acting upon the message therein.
A 2014 paper from Ace Metrix showed that television commercials that did not feature celebrities performed better than those with celebrity faces plastered on them. A 2020 study by WP Engine revealed that survey respondents couldn’t care less about celebrity endorsements of products or services.
The big reason behind why such marketing strategies fail to generate sales is pretty clear in a 2014 Nielsen survey. They do not produce value commensurate with the investment necessary because consumers tend to believe the celebrities are only acting as endorsers because they are paid to do so.
Consumers instead want actual authority and expertise relevant to a particular product or service. Incorporating those elements of authority and expertise into advertising for gambling creates some potential issues.
Why using trusted voices in gambling ads is complicated
To get a better return on their investment, the data say that gambling companies should feature people who are known to have authority and expertise in the field of gambling to endorse their brands. There are some issues that arise, however.
First off, the number of people who are successful gamblers is quite small. Secondly, the number of people who both possess some level of fame and success in online gambling is even smaller.
Furthermore, there are responsible gambling issues to consider. Even if a gambling company was to identify someone who has both some level of fame and expertise in gambling, there are ethical issues in broadcasting that. It could convey highly problematic messages of gambling being a realistic way to make money or characterize the games as that of skill rather than pure dumb luck.
Thus, it’s easier for gambling companies to just partner with a well-known face and hope for the best. Ontario gaming regulators have decided that isn’t in anyone’s best interest recently.
Ontario bans celebrity gambling advertisements
Last month, the Alcohol and Gaming Commission of Ontario published new rules for licensed gambling operators in the province.
According to Heather Fletcher of Bonus.com, the new rules apply to more than just athletes. The rules ban ads that feature essentially anyone with a level of notoriety that regulators deem significant. The stated motivation was that “children and youth are heavily influenced by the athletes and celebrities they look up to.”
To date, regulators across the US have not seriously considered such rules. It could be a good thing if they did, though.
Regulation protects gambling companies from themselves
The lesson of “just because you can doesn’t mean you should” is one that US online gambling companies have shown time and again they still need to learn in many ways. The recent “Never Forget” promotion from DraftKings, turning 9/11 memorialization into a sports betting ad, is a good recent example.
While likely not getting a return on the investment it takes to land a celebrity spokesperson is a lesson gambling companies should have already learned, that lesson becomes more painful if those celebrities actually do more harm than good to their associated brands.
For instance, take Betr’s marriage with Jake Paul.
Betr as a case study for bad celebrity relationships
While Betr has insisted that Paul’s participation in marketing its sportsbook is its path to success, the reality represents a stark contrast from that investment pitch. Despite Paul’s social media following, the data show he is failing to convert those followers into Betr customers.
Paul has recently gained some negative press by stumping on social media for US presidential candidate Vivek Ramaswamy. Among the tenets of the Ramaswamy brand are deporting US citizens whose parents are undocumented immigrants, presenting climate change as a hoax, and supporting Russia’s armed invasion of Ukraine.
In August, Betr accounted for just five 10,000ths of a percent of the amount of money that Bay Staters wagered on sporting events online in Massachusetts. The three physical sportsbooks in Massachusetts won more money during the month than Betr took in.
Massachusetts is no outlier, either. In July, Betr accounted for 0.001% of the online sports wagering dollars in Ohio. These data suggest that whatever Betr is giving Paul for the use of his person, it would be better off using those resources elsewhere.
The litany of celebrities who have been a deadweight for brands goes far beyond Paul. The history of celebrity endorsements is resplendent with such examples. When you consider that research also shows the best companies can hope for in using a celebrity spokesperson is a marginal bump, the payout simply isn’t worth the stake.
For whatever reason, gambling companies continue to be mesmerized into making bad plays despite the odds. That’s why regulators banning the use of celebrities in advertising would be anything but a limitation for such brands. It would actually free them up to make better use of their marketing budgets.