Report: How to respond when a celebrity endorser missteps

There is a benefit to acting quickly, but severing the relationship isn’t always the best option. Consider these insights from a study examining 230 crises.

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At last, the data supports what PR pros have known all along: A quick crisis response is essential in preserving support for your organization.

It can feel like there is little in the way of real, substantive data to support or dispute what many consider to be crisis management best practices. That’s why this particular piece of research stands out from the Institute for Operations Research and the Management Sciences (INFORMS).

In a piece for INFORMS journal Management Science, researchers took an in-depth look at 128 events of negative publicity tied to a celebrity endorser between 1988 and 2016. These events affected sponsors in 230 actual cases.

The exciting part of this case study is that it evaluated the effectiveness of company responses to celebrity endorsers’ misbehaviors using those companies’ daily abnormal stock returns. If a brand encountered a celebrity endorser crisis, as Nike did when Tiger Woods made news over his notorious marital problems, the study authors measured the negative publicity’s impact on the company’s stock price.

The research was able to analyze the way companies responded and how those responses influenced stock returns in the following weeks.

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