“So does anyone else not open Snapchat anymore? Or is it just me... ugh this is so sad.”
This was the tweet that caused Snapchat’s market value to drop $1.3 billion Thursday. Kylie Jenner, reality television star and author of the $1.3 billion tweet, was the sole impetus that triggered Snapchat’s 6 percent stock decline. That’s right — one individual tweeted her opinion and left a billion-dollar dent in a publicly traded company.
If you want Kim Kardashian to promote you via Instagram, it’s going to cost you in the neighborhood of $250,000 per post. This figure probably sounds absurd; however, upon further consideration, it starts to look like a steal.
Kardashian currently has 108 million followers on Instagram. Each post tends to get between 1 million and 3 million likes. However, this number is likely far lower than the actual reach of her posts. Nonetheless, if you conservatively assumed only 5 million people view each post, the $250,000 promotion cost would equate to about 50 cents per view.
Take this 50 cents per view and compare it with the rates for other digital marketing mediums. The average cost-per-click is $2.32 through Google AdWords and $1.72 on Facebook. This is if you go by cost-per-action, in which an advertiser pays a designated price per desired action, which often is a sale. These, logically, are more expensive, averaging $59.16 on Google and $18.68 on Facebook.
As a marketer, a consumer seeing Kardashian use your product is nowhere close to an actual transaction or sale taking place, but it’s at least a start. It is hard to put an exact price on exposure and brand recognition, the effects of which might not be measured in immediate sales or return on this particular investment.
That being said, celebrity endorsements have a unique reach and influence potential of almost immeasurable value. Nowadays, marketers have a nearly infinite source of access and influence into the pockets of consumers via mobile devices.
Recent data suggests the average U.S. consumer spends 5 hours a day on their phone. While on their phone, they are exposed to an almost infinite number of avenues through which marketers can reach them.
Why is a celebrity endorsement so influential? Because it effectively and efficiently taps into two of the three components of persuasion: pathos and ethos.
Ethos is associated with credibility. Regardless of whether it is merited, we perceive celebrities as credible sources. We’re familiar with them, and they almost feel like artificial friends or family to us. Like anyone else in our personal life, if we like them, we tend to trust them. Whether the celebrity is an expert in the field of whatever is being endorsed or simply a well-liked person with a massive following, consumers often feel a connection and form an association with the product that is built upon trust.
Pathos deals with emotions and can be incredibly powerful in persuasion/influence. If you are a fan of someone, there’s a good chance you will be open to and receptive of whatever they like. Many of us want to be like our heroes and people of interest, a habit that doesn’t necessarily leave people as they grow up. The association here is simple but potent. If someone loves Jenner, then there is a good chance those same positive emotions will become associated with the product she is endorsing.
Voila! The marketer has now harnessed part of your love for Jenner and applied it to its own product.
The obvious downside to this marketing method is that it entirely hinges upon the reputation of the celebrity. If a scandal breaks out with your celebrity, then the endorsement can have just as powerful negative effects.
Overall, it might be a steep price to pay for some companies but because of their massive reach and cultural impact, celebrity endorsements might be the single most powerful marketing tool of the future.
Andrew Hall is a UF management senior. His column focuses on entertainment.