What are Endorsements in Marketing? Definition & Guide (2022)

Defining Endorsement Marketing and a guide to when / how to use endorsements to build your brand.

Endorsements are a large part of marketing. Purportedly 28% of Nike’s enormous marketing budget goes to athletes to secure their endorsements. We see famous faces on the ads and packaging from everything from bed sheets to cereal. And now, social media and influencers have taken it to another level; Kim Kardashian gets paid $250,000 per photo endorsing a product on her Instagram account.

But marketers and endorsers often fail to truly understand the concept of endorsement. Most do not know how to use endorsements effectively and legally. They don’t know the nature and ethics around paying influential people to steer their fans to a product or service.

So let’s back up and start from thebasics.

What is an endorsement? Often the key element in an advertisement or marketing campaign, a product endorsement is a public declaration from a person or organization in support of a product’s features, quality, benefits, and/or brand.

An endorsement can be either paid or unpaid. When we think of endorsements, most people think about athletes or celebrities paid big bucks to endorse a brand. But the vast majority of endorsements are unpaid.

Five-star product reviews on Amazon or other e-commerce or social media websites are endorsements. An endorsement can also be a positive rating from a certification organization, such as a Top Safety Pick from the IIHS for a vehicle or an AAA rating from Standard & Poors for a bond. Even someone walking down the street wearing a t-shirt with a logo is a type of endorsement!

Soliciting endorsement is an essentialtactic for building every brand. Endorsements, either paid or unpaid, need tobe part of every brand’s marketing mix.

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Endorsed Marketing

We are social creatures. We look atwhat the people around us are doing to get clues about what we should be doing.We take special notice of people we consider experts or leaders. It is encodedin our biology through evolution.

Given our social nature, it should be no surprise that endorsements are extremely useful tools when marketing a product. People are going to look to friends, experts, and influential people when it comes to what products they choose to buy, what organizations they donate to, or who they vote for. Endorsements are social proof of the usefulness of something or someone.

An endorsement of any public statementthat espouses the virtues of a product.

An endorsement is always public, meaning that potentially anyone can hear it. The person endorsing the product cant expect it to be a private statement to be an endorsement. A private comment about a product they think is valuable is called a recommendation.

The distinction between endorsements and private recommendations is critical to keep in mind because people will talk positively about things in private that they may not feel comfortable to in public.

The difference between endorsements and recommendations is especially clear in politics. People will publicly support one candidate or policy, and then say their real views in private or when they vote.

People consider their reputations when they make endorsements. If a client says something in support of your product to you, you cannot publish that as an endorsement on your website, brochure, or advertisement without their expressed consent.

An endorsement is always positive. Ifit were negative, then it would be a denouncement.

An endorsement can come from either an individual or an organized group of people. For example, Saucony has running shoes that are endorsed by both Parker Stinson, American record-holding runner, (an individual) and the APMA, American Podiatric Medical Association, (an organization).

Individuals that commonly endorse products are:

  • Celebrities or Influencers
  • Athletes
  • Experts
  • Media reviewers
  • Product Users

Groups that endorse products are:

  • Professional Associations
  • Safety Boards
  • Environmental Agencies
  • Non-Government Organizations(NGOs)

Endorsements can be either paid orunpaid.

Unpaid endorsements are pretty simple. People have freedom of speech, so they can say whatever they would like about a product whenever they want, up and until it is libelous.

But paid endorsements have legal requirements for both the advertiser and the endorser. The Federal Trade Commission (FTC) enforces the laws governing paid endorsements.

The regulations seek to limitconfusion by the end-user; the FTC wants to ensure that consumers understandthat the words of the endorser may be influenced by money and that the endorserdoesn’t overstate the benefits of the product or ignore the risks. The endorseralso has the same legal requirements that apply to the company if they weremarketed directly.

For example, Kim Kardashian-Westendorsed pills on Instagram that can help pregnant women with the symptoms ofmorning sickness. The prescription was called Diclegis from a Canadianpharmaceutical company, Duchesnay. Kim said it helped her out during herpregnancy.

Unfortunately, Kim made some mistakes in the original post that prompteda strongly worded letter from the Federal Drug Association (FDA) to Duchesnay.Her Instagram post should have listed the risks and side effects, just as anyadvertisement would. She had provided a link for her followers to a page withthe side effect, but this was insufficient. She had to amend her post.

Endorsements can be quite powerful. But you need to understand them and the legal requirements to use them effectively. We talk about the legal requirements later in this guide.

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Paid Endorsements

Paid endorsements are usually whatmarketers are referring to when they talk about endorsements.

We think of endorsement deals like Nike signed an agreement with Kevin Durant worth upwards of $300 million. There is money and an exclusive contract involved. The deal is as much to keep the prized influencer from endorsing the competition as is it to secure their endorsement.

But there are other types of paidendorsements. A person can be paid for their endorsement with money, free goodsor services, or a combination of both.

Many marketers and public relations professionals generate paid endorsements without ever sending a cheque; they send their products out to reviewers or influential people. This practice is particularly prevalent in the toy industry and the cosmetics industry because the manufacturing cost of the product is quite low relative to the profit to be made if someone with a broad reach endorses the product.

Endorsements that are motivated by free stuff are still considered paid endorsements by the Federal Trade Commission (FTC) and are still under all of the legal requirements for both endorsers and advertisers.

(Video) Endorsement in Marketing Strategy

There is an exception. The FTC do not consider it a paid endorsement consumers that choose to write a something positive of their own free will after they have received the free product as part of a sampling program available to all customers.

Celebrity Endorsements

Celebrity endorsements are the cornerstone of endorsements. They should not work logically; why would a celebrity know any better what products you should buy?

But celebrity endorsements are big business. When people see their favorite star endorsing a product, they may take a look at a product they never considered before. Endorsements also build brand associations and the personality of a brand; people naturally assign the confuse of the celebrity spokesperson with the brand they are endorsing.

Examples of Celebrity Endorsements
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Why do companies use celebrity endorsements?

Big brands use celebrity endorsements because it both promotes their products and increases a product’s conversion rate (the percentage of people who buy out of the people exposed to a product). More people get to know about the product, and those people are more likely to buy when something is endorsed by someone they respect.

Celebrity endorsements make a productmore memorable. A forgettable product is made noteworthy when you attach awell-known face to it. Our brains are tuned to pick out and remember people’sfaces easily.

Celebrities can also make anunfamiliar product more approachable with their endorsement. We are familiarwith stars; we see them on TV, read about them in articles, and follow them onsocial media. That frequency of contact makes them feel familiar, even if we havenever met them.

The familiarity of a celebrity transfers to make a product more familiar and less intimidated. This effect is particularly useful for new products or existing products entering a new market.

What are Endorsements in Marketing? Definition & Guide (11)

For example, Huawei relies on theendorsements of celebrities like Gal Gadot and Henry Cavill. Huawei has aunique challenge given its Chinese sounding name and the fact that it isrelatively new to western consumers relative to other smartphone manufacturerslike Apple, Google, Samsung, and Sony. Their use of well-known celebrities intheir advertisements makes them seem less intimidating because of a phenomenoncalled cognitive easing (a point well established on the Tech Altar YouTube channel.)

Cognitiveease is our brain’s tendency not to question things that we areexposed to often; in other words, things that we are familiar with. We approachunfamiliar things with skepticism and doubt. But add a familiar celebrity inthere, and we approach a product with far less reservation.

Now, in the social media era, celebrities have channels to customers that marketers can pass messages through… for the right price, of course.

Until recently, our contact with stars was mediated by a media company that wanted marketers to advertise against the celebrities program. For example, a Dr. Phil fan would watch CBS, a television channel.

Now, Dr. Phil and most celebrities have social media followings that add value to the brands they endorse. Marketers value the additional reach that comes with public figures that have large social media followings.

Are celebrity endorsements effective?

Yes, celebrity endorsements have been proven to be an effective marketing tactic.

That result is a little a little perplexing. We have people who sometimes have no specialized knowledge about something recommending the products for that thing. It is also an open secret that celebrity recommendations have more to do with the dollars in a contract than the effectiveness of the product.

So it is fair to ask: do celebrityendorsements increase sales and brand equity?

A study out of the Harvard BusinessSchool proved that they do, at least in the sports and athletics industry. Thestudy called “The Economic Value of Celebrity Endorsements”was performed by Anita Elberse, a professor at Harvard, and Jeroen Verleun,then an analyst for Barclays.

“[W]e find validation for the use of celebrity endorsers as an advertising strategy: a firm’s decision to enlist an athlete endorser generally has a positive pay-off in brand-level sales – in an absolute sense and relative to the firm’s competitors – and increases the firm’s stock returns.”

The Economic Value of Celebrity Endorsements by Anita Elberse and Jeroen Verleun

Elberse and Verleun studied the effectof endorsements on both sales and stock prices of 51 publically tradedcompanies that sell sports and athletic products. They used data from Nielson’sHomescan panel for sales data. They compared the sales of brands that hadendorsements with comparable brands that did not have endorsements.

They found that an endorsement didincrease sales by about 4%.

It is important to note that mostbrands, 43 of the 51, saw a positive effect from their endorsements. But a fewreceived no sales growth from their endorsements, and some brands lost sales!

So celebrity endorsements work whenthey are done smartly. The celebrity’s brand must match up with both theadvertiser brand and the values of the market.

If the endorsement comes from anathlete, then it is also important that they win! The study found betterreturns for the advertising brand when the endorser performs well in his or hersport.

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Do celebrity endorsements raise a brands sales, or a product categoriessales?

Celebrities have the power to bringattention to a product that people would otherwise ignore. But does that newattention help the brand who paid for the endorsement, or does it increase thesales of all brands in the category?

When Kate Hudson models Fabletics athleisure wear on her Instagram account, does she increase demand for Fabletics or athleisure products in general?

What are Endorsements in Marketing? Definition & Guide (12)

It is an essential question becausefor the expensive endorsement contracts to have a return on investment, thenthe benefit needs to go to the brand and not help the competition.

The Harvard study by Elberse and Verleun wereferenced earlier proves that most of the benefit goes to the endorsed brand.

“While endorsements improve sales for the focal brands, they do not move the needle for competing brands in the category.”

The Economic Value of Celebrity Endorsements by Anita Elberse and Jeroen Verleun

Paid Endorsements From Organizations

For some reason, paid endorsementsfrom individuals seem credible for customers when paid endorsements fromorganizations seem hollow and unconvincing. But they are a thing, so I have toacknowledge them.

Note that unpaid endorsements fromorganizations (like safety associations) are far more powerful, and we coverthose later in the article.

(Video) What is influencer Marketing | Influencer Marketing

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Trade Organizations

Explicit endorsements usually comefrom trade organizations. For example, Oral-B has some toothbrushed that areaccepted by the American Dental Association (ADA).

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These trade endorsements are notsimply pay-for-play. They would not endorse a wantingly deficient product. Theydo not want to lead customers to bad experiences or ruin the name of theirorganization. Both the manufacturer and the tradesperson serve the same market,so it would be foolish to ruin their relationship with those customers.

But displaying the seals of approvalor logos of the trade association requires a licensing agreement. The designsare the copyright or trademark of the organizations, and they usually make alittle money for their organization by renting out the right to display them.

More than money, what tradeorganizations are looking for is to steer product decisions by themanufacturer. They usually have a list of best practices agreed upon by themembers, and they will give their seal of approval to any product design thatcomplies.

What are Endorsements in Marketing? Definition & Guide (14)

For example, the ADA is looking foreither multilayer or diagonally cut bristles when they grant a manualtoothbrush with the ADA Seal of Acceptance. This guidance comefrom a scientific study proving the effectiveness of diagonal ormulti-layer bristles. The ADA wants to see tooth care products be aseffective as possible, rather than be as cheap as possible as the manufacturerswould prefer.

Trade organizations rarely exclusivelyendorse brands like celebrities would. An exclusive endorsement would be thebest way to make money but would be against their organizational mission tohelp out the industry their tradespeople work in.

Charities

Another type of organization thatendorses brands is non-profits. In exchange for support, some charities willpromote a brand. The promotion can be contingent on a monetary donation or adonation of products.

Usually, sponsorships of charities arepurely promotional and do not come with a clear endorsement of a brand’sproduct. The charity wants to leave the door open for donations from otherbrands.

But sometimes support does come withan exclusive endorsement. For example, I work with a dog food brand thatdonates food to shelters, and many of the shelters display a sign saying“We Feed And Recommend” the brand.

Distributors and Retailers

Sometimes the people who bring theproduct to customers will exclusively sell one brand’s products. Distributorsand retailers may sign an exclusivity agreement with one brand. This agreementmeans that they will not sell any competing brand for an agreed-upon amount oftime.

Both the retailer and the exclusive brandmarket this agreement as an endorsement to customers (“the officialproduct of…”).

But the exclusivity has more to do with business than the effectiveness of the product. In BMB’s investigation of white label products, we found many instances of retailers signing exclusive agreements with manufacturer brands if they would agree to manufacture and distribute their store brand product.

Retailers will also look to brands tosplit the cost of investments in marketing. A brand will pay some or all of thecost of a piece of signage in stores if they can co-promote their brand on thesignage. These co-promotions seem like endorsements to the customer.

For example, we have many convenience stores here in North America that have their storefront sign with a Coca-Cola. These signs are there because the Coca-Cola Company has paid for their sign in exchange for the permanent promotion of their brand in a place their customers typically purchase.

I have worked with retailers who havecustom graphics applied to their front windows, all paid for by a manufacturerwhose products they carry. It is a win-win. The store gets a great brandedstorefront, and the manufacturer brand gets their logo in front of customers asthey walk in to purchase.

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FTC Regulations for Paid Endorsements

What are Endorsements in Marketing? Definition & Guide (16)

It is essential to understand thelegal requirements if you are a brand builder who is looking to pay forendorsements.

I am not a lawyer, and this is not legal advice. If you are marketing in the US, then please read the FTC guidelines for yourself, or have your legal representative read it and counsel you accordingly. If you are outside the US or market outside the US, make sure you follow the regulations of your region.

What is considered by the FTC to be an endorsement?

The FTC considers an endorsement to be any statement from or depiction of a person/organization that would lead viewers think that the endorser believes that this product is the best.

That is an expansive definition, andintentionally so. The FTC is aware that less-than-ethical marketers willexploit endorsements otherwise.

To quote the regulations directly:

“For purposes of this part, an endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group, or institution.”

Guides Concerning the Use of Endorsements and Testimonials in Advertising, Federal Trade Commission

A public figure who appears in anadvertisement is considered by the FTC to be endorsing that product. Even ifthe celebrity doesn’t explicitly state their opinion, the viewer of the ad canreasonably infer that the star thinks the product is fantastic. Therefore, theFTC counts as an endorsement.

There is an exception for actors orhosts who read advertising provided copy from the advertiser. For example, anactor playing a character in a skit in a video ad, or a radio or podcast hostwho reads an ad. The context of the sponsored segment should make clear thatthe opinions in the ad advertisement does not reflect the personal views of thehost, and thus is not an endorsement.

I observe a lot of new mediacelebrities, hosts of podcasts and YouTube shows in particular, who adlib theirad reads. This is a mistake, as it confuses the viewer between their personalopinion and the opinions of the advertiser. The conflation of opinions createsliability for both the host and the advertiser because it crosses the line intoa paid endorsement, which is subject to additional regulations.

In another exception, the FTC does notconsider it a paid endorsement if a social media post of a product that someonegot for free through a regular consumer discount program. For example, if aperson claims a coupon for a free ice cream cone and then raves about the icecream on social media.

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Does the FTC require that paid endorsement reflect the personalopinions of the endorser?

Yes. An endorsement leads people tobelieve that the endorser likes the product, even if it is an open secret thatthey are getting paid by the advertiser.

(Video) Do I Need a Celebrity Endorsement Marketing Strategy?

“Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser.”

Guides Concerning the Use of Endorsements and Testimonials in Advertising, Federal Trade Commission
What are Endorsements in Marketing? Definition & Guide (17)

So we have to assume that Christiano Ronaldo just loves fried chicken when he endorses KFC. It seems ridiculous to me.

Marketers cannot put words in theendorser’s mouth. Marketers are not required to repeat the words of endorsementfrom the public figure verbatim. But marketers have to make a good faith effortto maintain the meaning, so it still reflects the beliefs of the endorser.

Marketers are legally required to makesure that the endorsement matches the current view of the public figure beforere-using it on pieces of marketing. Marketers have to check-in with theendorser regularly, and if new information has come to light regarding theeffectiveness of the product or a competitor’s products.

For example: if an athlete endorses a protein powder and the company reformulates their product for any reason, then the company needs to reach out to the athlete and have them express their endorsement of the reformulated product. This is the case even if the new product is objectively better in every way.

An endorser not only has the right to change their mind, but they might also have a legal requirement to retract their endorsement if the product is found to be faulty, dangerous, or misleading. The endorser is legally liable if they continue to recommend a product after a piece of information has come out that points to the product being unsafe.

FTCs own example of this:

“An ad for an acne treatment features a dermatologist who claims that the product is “clinically proven” to work. Before giving the endorsement, she received a write-up of the clinical study in question, which indicates flaws in the design and conduct of the study that are so serious that they preclude any conclusions about the efficacy of the product. The dermatologist is subject to liability for the false statements she made in the advertisement.”

Guides Concerning the Use of Endorsements and Testimonials in Advertising, Federal Trade Commission
Does the FTC care whether the endorser is a regular user of theproduct?

If the advertising or the wording ofthe endorsement states or implies that the public figure uses the product, thenthey must continue using the product as long as the endorsement is beingactively marketed.

If an ad makes it look like the endorseris a regular user, and the endorser stops using the product, then no marketingcan feature the endorser anymore.

For example, Jennifer Aniston told People Magazine that she was a userof Aveeno moisturizer before and after she was signed as their brandambassador. She has been using their products since her motherrecommended it to her at fifteen. If that ever changed, then Aveeno would needto pull their advertisements featuring her.

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What does the FTC do if the endorser overstates the benefits of theproduct?

The FTC holds both the advertiser and endorser to only state provable claims about the effectiveness and features of the product. The endorser can’t say anything that the advertiser brand can’t say directly.

The FTC is trying to make sure thatadvertisers and manufacturers are not trying to get around the rules of theirindustry by using an endorser as a cutout. Anything a paid endorser says hasthe same legal requirements as if the company said it directly.

For example, if a soccer star said his Nike cleats made him run faster in a post-game interview, and that has not been proven to be the case, then they need to retract the statement. If the statement is digital, then they need to go back and ask the media company to pull down the post or amend it.

Many marketers and PR professionalssend free products out to a network of bloggers, journalists, and mediapersonalities. As we learned, the FTC considers the complimentary product inexchange for reviews to be a paid endorsement. Thus, the marketers and PRpeople are legally required to follow up with the people they sent a product toand make sure that they did not make any embellished or misleading statementsin the course of their endorsement. If they did, then the marketers and PRpeople need to make every attempt to have the endorser amend the post wherethey made the over-the-top endorsement.

Do endorsers need to state their financial relationship with theadvertiser?

Yes. There needs to be a lineeverywhere there is a statement that is the result of a paid endorsement.

The nature of people’s reaction to a statement changes if they know that the person is getting paid for the endorsement. Some people may not take an endorsement seriously if they know it is paid. The FTC wants to make sure that these people know a paid endorsement from an unpaid endorsement so that people can make up their minds accordingly.

The moniker #ad has taken off as the symbol of a paid endorsement, but the FTC warns that it alone is not sufficient. A social media influencer needs to state, in no uncertain terms, that they are paid for their words and post.

The FTC considers both the advertiserand endorser responsible for making sure the financial relationship statementis there.

I have to make sure that I comply with this. I am, from time to time, sent business books for free in exchange for reviews on BMB: Brand Marketing Blog. I also provide links to books and products on Amazon that I can get an affiliate commission from. In both cases, I have to make sure that I state in my posts the nature of my relationship with the seller. People can take it or leave it, but at least they are informed.

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Unpaid Endorsements

Every successful brand experiences thepositive effect of endorsement, but only a small fraction of companies everypay for endorsements. So the majority power of endorsements comes from unpaidendorsements.

If a brand aligns with people’svalues, then they will proudly display themselves using the brand’s product. Ifa product is exceptionally useful or surprisingly delightful, then theproduct’s users will positively review it.

Unpaid endorsements can be bothexplicit and implicit.

Explicit endorsements are when a person or organization unambiguously speaks to the positive traits of a brand or product in public.

Examples of explicit endorsements thatare unpaid are:

  • Five-star reviews on an Amazonproduct page.
  • A glowing post about a producton Facebook.
  • Five-star reviews of a businesson Google Maps.
  • Sharing a piece of media onTwitter.
  • A plumber urging his customersto buy a specific brand of faucet.

Implicit endorsements are when a person or organization display their use of a product, which can be interpreted as an endorsement by passers-by.

Examples of implicit endorsements are:

  • Someone wearing clothing that displays a brand’s logo.
  • A shopper bringing home their products in a bag that has the store logo.
  • A celebrity driving a brand of car.
  • Public criticism of a political candidate while not criticizing the other side.
  • A brand’s fan sticking a logo of the brand on their car’s bumper.
  • A sports team whose uniform displays the logo of an apparel manufacturer.
  • An eCommerce platform that orders search results by “Featured” by default.
  • The number one result in a Google SERP.
  • A public figure speaking at a fundraising event.
  • A retailer displaying the logos of the brands that they sell on their windows or signs.
  • Co-branded products.
  • A speaker at an event whose laptop shows it’s logo to the audience.

Not every product that we use we wouldendorse. So often, people give more credit to the brand than is deserved. Butthe social proof of seeing a trusted person using a product is a powerfulinfluence on our purchasing behavior.

What are Endorsements in Marketing? Definition & Guide (19)
(Video) What is Social Media Influencer Marketing & Celebrity Endorsement [HINDI]

Supreme is a brand that has benefittedfrom the power of unpaid implicit endorsements. Supreme crossed a tipping pointwhere it was considered “cool.” After that, showy influencers startedto wear Supreme’s merchandise to help reinforce their relevancy. After that,the brand saw explosive growth.

Unpaid endorsements from friends, family and community leaders

When we think about endorsements, weimagine the one significant endorsement that will sell millions of dollarsworth of product. But the real power of endorsements comes from lots of smallendorsements.

Friends, family, everyday experts, andcommunity leaders can have far more influence on the purchases of individualpeople in their circle than a celebrity does for one of their fans. Peoplecloser to us talk to our particular needs, and not in generalities.

Here are some examples of unpaid community endorsements:

  • A colleague who wants you tobuy a FitBit so you can see each other’s progress.
  • A plumber who only uses Moenfaucets.
  • That fashionable friend who hasa Prada bag.
  • A pastor who calls out a localbusiness for their support of the church community.
  • A union which endorses apolitical candidate.

Advertising platforms understand the power of endorsements from people close to the person being marketed to. If they can, Google and Facebook will show the viewer endorsements from people within their network. The ability to pull who-you-know into marketing is part of the reason why social media advertising is valued so much more than ads in traditional media.

Google Ads has a featured called Shared Endorsements. For the feature to kickin, someone if viewing an ad and someone in their network has positivelyreviewed that product or brand. If that is the case, then the name of theperson, the star rating of the review, and the first few words of the reviewwill be displayed below the ad. This social proof makes the ad much moreeffective and builds an affinity towards the brand.

If Google using your name to helpmarket their advertisers seems creepy to you, then you can opt-out of shared endorsements.

Editors note for readers: I am unclear whether this feature is still available foradvertisers. Can someone confirm or deny? Please comment below or contactus.

Facebook uses friend recommendationsall over the place. When you are looking at a potential friend, they show allthe friends you both have in common. Promotion for any FacebookGroups and Facebook Pages highlight other people in yournetwork who have joined already. And Localin the Facebook App, the product that competes with GoogleMy Business, shows reviews from connections before reviews fromthe general public. You need to make sure your location information is filled out on your Facebook Pageto show up in Local in the Facebook App.

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Unpaid Endorsements from Organizations

As we discussed earlier, people arequite cynical when it comes to paid endorsements from groups. But unpaidendorsements are quite powerful.

Conscientious consumers look for theseals of approval of non-profit organizations. For example, the InsuranceInstitute for Highway Safety (IIHS) publishes their Top Safety Picksfor vehicles in every segment. Often the brands of the vehicles that are pickeddisplay the IIHS Top Safety Pick prominently in their advertising, like the Hyundaiexample here.

The other significant source of unpaidendorsements are reviews from media outlets. For example, Oprah’s Favorite Things is a list of productsthat are published by the Oprah Magazine every year before the holiday season.The list is not pay-to-play but does have very structuredrequirements laid out by Oprah and her producers.

Endorsements also come from aggregatedlists, like “top sellers” or “highly critically reviewed,”that are certified by media outlets.

For example:

  • Authors, publishers, and publicrelations companies work very hard to get a book onto the NewYork Times Bestsellers List because that distinction is soworthwhile.
  • Video game publishers show offwhen their games get a 4+ star rating on IGN, an aggregate reviewfrom many game journalists.
  • Movie distributors love showingoff their score on Rotten Tomatoes, which is also a reviewaggregator of both critics and regular moviegoers.

Unpaid Endorsements in Business-to-Business (B2B)

One of the most powerful applications of endorsements is in B2B. The page in a sales deck that shows the list of existing clients is usually the most convincing slide. Decision makers often go on to a company’s website or LinkedIn page to see if similar professionals have endorsed the service provider.

What are Endorsements in Marketing? Definition & Guide (21)

We like to delude ourselves into thinking that the business buying process is more rational than consumer purchase decisions. But really, business buying decisions are made emotionally, and then back filled with rationality. People make a gut decision, and then come up with all sort of reasons why it is the most rational choice.

Endorsements serve both as an emotional trigger to buy as well as provide a rational reason that a purchaser can take back to their boss or board.

People want to feel safe when making a large business purchase decision. “Nobody got fired for buying IBM” was an unofficial tag line of big blue in the 1980s. Being perceived as the safe choice was why they were so dominant for so long in the enterprise computer market.

Seeing a strong client list and endorsement makes B2B buyer feel safe because others have taken the risk before them, and are doing well. It is social proof.

Both a client list and some personal endorsements help people sell a B2B purchase within the organization. The easiest pitch for an internal person to make to their colleagues is: “everyone else is doing it.” From HR systems to cloud storage, the internal decision comes more quickly and easily if stakeholders can see that a competitor has made the move already.

How do you get endorsements for your business product or service? You ask your clients.

The best time to ask is when you receive a glowing piece of feedback from a client. You should ask if you can put that statement, or something slightly reworded on your website.

But don’t wait for clients to offer up an endorsement; they rarely will. A simple email saying: “We are tuning up our website and sales material and a positive statement from you about our work would really help us out. Would you mind sending me one?”

A lot of account managers do not solicit reviews because they worry that the client will come back saying that they don’t actually like working with the company. But that never actually happens.

The worst case scenario I have ever experienced is someone saying: “sure, but can you leave my name off of it.” I have also received back: “No problem. Write whatever you want and put my name on it.” These type of responses can be a bit demoralizing but are far from catastrophic.

More than half the time I have asked for endorsements, I have received genuinely touching ones back. And that is helpful both for endorsed marketing and personal validation.

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Conclusion. Endorsements are powerful, but you should seek them out thoughtfully.

Endorsements are powerful influences on people. Seeing people that we respect, both people close to us and public figures, endorse a product will make us more likely to buy that product in the future. We are social creatures, and endorsements will always play to our human nature.

Every brand needs endorsements, and every brand builder needs to encourage people to speak positively and publically about a brand’s product and the brand themselves. Every brand needs to solicit and encourage unpaid endorsements by following up with people they know to use their products. Paid endorsements are trickier, but make sense for more brands than currently consider them.

But there are regulations and liabilities associated with paid endorsements. There is nothing overly tricky; you can read the entirety of the FTC’s guidance in a couple of hours, as I did. The most important thing to keep in mind is that the brand and paid endorser are legally tied together; both are on the hook if the other makes misleading statements or they are omitting things that are required in their industry. So only work with endorsers who are reliable and professional.

FAQs

What are Endorsements in Marketing? Definition & Guide? ›

Endorsements are social proof of the usefulness of something or someone. An endorsement of any public statement that espouses the virtues of a product. An endorsement is always public, meaning that potentially anyone can hear it.

What are endorsements in marketing? ›

Definition: Endorsements are a form of advertising that uses famous personalities or celebrities who command a high degree of recognition, trust, respect or awareness amongst the people. Such people advertise for a product lending their names or images to promote a product or service.

What is the best definition of endorsement? ›

Definition of endorsement

1 : the act or process of endorsing. 2a : something that is written in the process of endorsing. b : a provision added to an insurance contract altering its scope or application. 3 : sanction, approval went ahead without the endorsement of his boss.

What is an endorsement and define the three types? ›

Special Endorsement – Where the endorser puts his sign and writes the name of the person who will receive the payment. Restrictive Endorsement – Which restricts further negotiation. Partial Endorsement – Which allows transferring to the endorsee a part only of the amount payable on the instrument.

What are endorsements in business? ›

In advertising, an endorsement is a public statement that someone makes in support of a specific company, product or service. Endorsements can take the form of written or verbal statements, social media posts, website content and audio or video content.

What are the four types of endorsements? ›

Four principal kinds of endorsements exist: special, blank, restrictive, and qualified. An endorsement that clearly indicates the individual to whom the instrument is payable is a special endorsement.

What are the different kinds of endorsement? ›

There are six types of endorsement.
...
Types of Endorsement
  • Blank or General Endorsement.
  • Full Endorsement or Special Endorsement.
  • Conditional Endorsement.
  • Restrictive Endorsement.
  • Partial Endorsement.
  • Facultative Endorsement.

What is the difference between endorsement and advertisement? ›

Endorsements are personal while advertisements are commercial. Something personal is not easily ignored. Personal is authentic. Personal is helpful.

What does endorsing a product mean? ›

What is an endorsement? Often the key element in an advertisement or marketing campaign, a product endorsement is a public declaration from a person or organization in support of a product's features, quality, benefits, and/or brand. An endorsement can be either paid or unpaid.

What are the 3 main endorsements? ›

There are three main types of endorsements:
  • Blank endorsement. The term "blank endorsement" can be confusing because it doesn't mean that an endorsement is, strictly speaking, blank. ...
  • Restrictive endorsement. ...
  • Endorsement in full.
May 22, 2019

What are the features of endorsement? ›

Essential of Valid Endorsement:
  • Endorsement is on the back or face of the instrument.
  • 2.It must be made by the maker or holder.
  • 3.It must be properly signed by the endorser.
  • 4.It must be for the entire Negotiable Instrument.
  • There is no specific form of words are necessary for Endorsement.
Jul 15, 2020

Why is endorsement important in business? ›

It helps to build brand equity. There exist many companies that went multibillion- dollar once they embraced celebrity product endorsement. A product endorsement creates a constant and ever-present advertisement in that whenever customers see the endorsing person, they remember his/her advertisement and the products.

How do endorsements help a business? ›

A product endorsement gives you a chance to differentiate your company and brand message from what your competitors are doing. Including someone who is well-known in an advertisement may also improve consumer ad recall, which allows you to stay at the top of their mind more often.

What are the effects of endorsement? ›

Effect of endorsement The endorsement of a negotiable instrument followed by delivery transfers to the endorsee the property therein with the right of further negotiation, but the endorsement may by express words, restrict or exclude such right, or may merely constitute the endorsee an agent to endorse the instrument, ...

What it means to be endorsed? ›

to approve, support, or sustain: to endorse a political candidate. to designate oneself as payee of (a check) by signing, usually on the reverse side of the instrument. to sign one's name on (a commercial document or other instrument). to make over (a stated amount) to another as payee by one's endorsement.

What are the rules regarding endorsement? ›

1. Signature of the endorser. The signature on the document for the purpose of endorsement must be that of the endorser or any other person who is duly authorized to endorse on his behalf. If a cheque is payable to two persons, both of them should sign their names in their own handwriting.

How would you endorse a product? ›

Tweets that endorse a product or service are likely sufficient to meet the FTC's requirements if they include either “sponsored,” “promoted,” “promotion,” or “paid ad.” Starting the tweet with “Ad:” or “#ad” is also likely sufficient. Your endorsement disclosure should be clear and conspicuous.

What is an example of a endorsement? ›

Endorsement is defined as the act of giving your approval or recommendation to something, usually in a public manner. When a famous athlete announces that he wears a certain brand of sneakers, this is an example of an endorsement for the sneaker brand.

What's the difference between endorsement and advertisement? ›

Endorsements are personal while advertisements are commercial. Something personal is not easily ignored. Personal is authentic. Personal is helpful.

What's the difference between sponsorship and endorsements? ›

Sponsorship agencies reach out to companies for potentials opportunities, but endorsements talk with the customer. Although Adidas is a main sponsor of the FIFA World Cup, doesn't mean that all the teams and players involved in the competition like or use their brand. That's when endorsement deals come into play.

What does endorsing a product mean? ›

What is an endorsement? Often the key element in an advertisement or marketing campaign, a product endorsement is a public declaration from a person or organization in support of a product's features, quality, benefits, and/or brand. An endorsement can be either paid or unpaid.

Videos

1. Celebrity Endorsements and the Business Strategy Game
(Stephen Haggard)
2. What You Need to Know About FTC’s Proposed Changes to Its Endorsement Guides
(Venable LLP)
3. The FTC's Endorsement Guides - Business Tips | Federal Trade Commission
(FTCvideos)
4. Russ Roberts — The Decisions that Define Us
(Tim Ferriss)
5. The Power of Celebrity Endorsements and Influencers
(ElizabethNickerson)
6. Marketing Minute 110: Should Influencers Disclose Endorsements? (Digital Marketing / Social Media)
(Anthony Miyazaki)

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