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How much is a celebrity worth? Advertising agencies don't really know how to calculate the dollar value of star power. Hollywood talent agents are no help: They represent the star's interests. So along comes a new breed of consultants promising corporate clients that they will take away some of the mystery.
A half-dozen of these middlemen are already operating in Los Angeles, Las Vegas, and New York--among them Platinum Rye, Creative License, and Davie Brown Talent. Their pitch to marketers: All the information needed to cut the best deals is at our fingertips. The firms track market prices for the celebrities (accurate at least until the next scandal). And they offer research to determine which stars are truly influential--and which are merely celebrated. Working either on retainer or for a percentage of the total deal, the agencies negotiate everything from cameos at corporate events to appearances in national ad campaigns for brands such as Coors, Pepsi (PEP), Chevy (GM), and AT&T (T).
One advantage these small outfits offer is that they are run by people familiar with the insular movie and music industries. "Think of scenes from [the hbo show] Entourage," says John Osborn, president and chief executive of BBDO Worldwide, an ad agency owned by Omnicom Group Inc (OMC). "If I were to pick up a phone and call an agency, I have no idea if I'm getting the right price, or talking to the right person. I need someone who can navigate this world."
Most important, the firms can sometimes shift the balance of power between big stars and big brands. It can be as simple as providing anonymity: When BBDO decided it wanted Lars Ulrich and James Hetfield of the band Metallica for an America Online (TWX) advertisement, Platinum Rye initiated the negotiations without once mentioning AOL. When talent agents and managers hear the name of a prominent brand, they can start "seeing dollar signs," Osborn says. "You need someone who can play hardball."
These firms are also introducing a new twist in that familiar Hollywood staple, the bidding war: Now it's the celebrities who are doing the bidding. Molson Coors Brewing Co. is looking for a folksy song for its next ad campaign, according to people familiar with the search, but doesn't want to pay top dollar to license an existing tune by the likes of John Fogerty, Stephen Stills, or Bob Dylan. So Coors, its advertising agency DraftFCB, and Creative License are inviting major recording artists to submit a song on spec. The client gets a tune from a leading songwriter, and the artist gets a promotional boost, plus a paycheck. Which artists are considering it? John Fogerty, Stephen Stills, and Bob Dylan, to name three.
When it comes to calculating a fair price for more traditional endorsements, the agencies can tap a wealth of information about recent deals. They also collect personal information, such as which causes interest the stars. When Creative License approached Sheryl Crow to use her song Every Day is a Winding Road for Subaru last year, executives went in knowing Crow felt strongly about environmental issues. Representatives showed her Subaru's low-waste manufacturing plants and talked about its commitment to being green. She agreed to the deal.
Measuring a celebrity's influence, of course, is as much art as science. Q scores, the measure traditionally used to track stars' popularity, doesn't look at how good they are at persuading consumers to buy. Will Ferrell, for instance, is funny, and Angelina Jolie is beautiful, but a company might wonder whether anyone would take either's endorsement seriously.
Davie Brown Talent, which is also owned by Omnicom, surveys some 1,000 respondents to calculate the relative appeal and influence of more than 1,500 celebrities. (Tom Hanks and Oprah Winfrey are the two most influential.) While most people find comedian Ferrell more likable than Jolie, she is the more persuasive one, their research found. Jolie is currently earning some $12 million, plus performance incentives, to be the face of St. John Knits International Inc. (SJKI).
By Burt Helm