What to remember when working with celebrities and KOLs with their own product lines

Rapper Kanye West is no stranger to making headlines for his controversial outspoken views.

Last week, West made headlines when he decided to part ways with Gap ahead of the contractual agreement ending in 2030 due to issues ranging from poor communications and deciding on price points. Gap wasn’t the only brand West had issues with. Adidas also made headlines as the rapper criticised the brand for leaving him out of meetings.

While celebrity and brand partnerships are not new in the marketing world, in recent times, the relationship has changed quite a bit with celebrities and key opinion leaders (KOLs) now going beyond just advocating for products to creating their own brands.

For example, like West, his former partner Kim Kardashian is known for the multitude of products she’s created from shapewear to skincare products. Most recently she dropped her line SKNN line and her three year old shapewear business Skims is already worth US$3.2 billion, according to Bloomberg.

Other celebrities who have entered the route of entrepreneurship include Gwyneth Paltrow started her own brand Goop and Jessica Alba who co-founded eco-friendly consumer-goods business Honest Co. Ryan Reynolds, who is no stranger to the marketing world, also co-owns his own alcohol brand Aviation American Gin.

As such, the dynamic for brands looking to collaborate with stars who have their own collections is a far different one than that of simply brand advocacy.

For one, when entering such collaborations, it would do companies well to remember that every brand has a unique personality and that’s why they all appeal to different audience segment or customers, said Samir Dixit, a partner with DIA Brands. Brands must be clear on why the end goal and what gaps are needed to be filled by the collaboration that would otherwise not be possible.

The right collaborations, explained Dixit, go way beyond the time frame of the partnership. “Brand partnerships must be done for the right reason and that reason must be thoroughly examined for the desired and positive benefit for your own brand and audience. It should not be a situation where once the partnership is over, the sales plummet instantly,” said Dixit. 

Dixit also added that surprisingly, brands that don’t have prior celebrity association experience miss out on some of the basic contractual aspects while signing a celebrity. Very importantly, a contract with the celebrity must have compensation clauses that would protect a brand in a mishap situation and provide the brand with an exit against a celebrity contract. There should also be room for compensation from a celebrity and allowance to make a public statement clarifying the brand’s position and distance from a controversy that the celebrity is involved in.

“Brands should consult a good IP lawyer when signing a celebrity or when getting into any sponsorship or partnership association,” Dixit further added. “Prevention is better than cure so do your homework thoroughly on the celebrity before signing on.”

Jay Milliken, senior partner at Prophet, added that when a brand chooses to establish a partnership with a celebrity or influencer who is known to be outspoken, then they should already assume the risk that something unexpected could happen.

In these cases, the fact that the person is opinionated and outspoken is likely part of what initially attracted the brand to the relationship.

“It is usually situations where a mainstream celebrity does something controversial and out of character that causes bigger issues for brands,” he added. In the case of adidas, Gap, and West, Milliken has the view that the benefits were clearer for adidas than for Gap. “Gap’s celebrity collaborations were primarily through advertising. Gap was a struggling brand trying to find relevancy through a partnership with an edgy and relevant celebrity. Adidas as a sports brand is used to collaborations with sports stars and other celebrities,” he shared.

At the end of the day, alignment around a shared purpose or cause as well as values is critical for successful partnerships or brand collaborations, said Dom Mason, managing director at Sedgwick Richardson SEA. “From our experience strategising across the region, brands are addressing consumer demands by putting more focus on sustainability. For example, West's partnership with Gap and Balenciaga is, in fact, a great example of how brand collaborations can take the sustainability agenda forward—which is worth celebrating.”

He added that West, in himself is a personal brand as well as a product brand.

So, there are three brands to account for in this discussion and they should all be respected, and their needs addressed accordingly, to drive shared brand value.

Will brands stay clear of celebs like West?

Mason also added that whether a brand works with an opinionated entrepreneur/celebrity like West depends on commonalities. In any partnership it is important to identify commonalities and state them prior to collaboration.

“A lot of good could be said about the Ye-Gap-Adidas situation as it provided something fresh for the market while driving the sustainability agenda and providing new opportunities for sustainable consumption in the market,” he shared.

Some key reasons brands still work with opinionated leaders such as West include capitalising on the appeal of each other’s brands in the markets in unreachable segments, increase short-term sales in key markets, provide complementary products, fast track access to a new market through an established brand in the market, amongst many others. As such, this isn’t a first and one of its kind incident, shared Dixit.

“Celebrity and brands have both collaborated and collided for decades,” he said. “Unless Kanye’s followers decide to disown him and such incidents impact his popularity negatively, there would always be brands willing to associate themselves with West and his brand,” Dixit shared.

In terms of damage control, Dixit added that for adidas, there isn’t really any damage done to the brand in the short to medium term.

However, in the case of Gap, given there is an early end to the contractual agreement and severe statement made on copying of designs by West, serious action and request for a public apology could be demanded.

Adding to the point, Milliken also pointed out that West’s Nike collaboration also ended after a royalty dispute. “I’m pretty sure that there are many brands, both established and up-and-coming, that would be interested in working with a proven celebrity collaborator like West despite the potential risk, Milliken shared.

Meanwhile as the dust settles, Milliken has the view that the brands are doing right in remaining mum. “There is no benefit for either Gap or adidas to respond to the statements by West. Celebrity news cycles are short and fast, so the best situation for these brands is that attention is shifted elsewhere. Responding will only prolong the time they are in the headlines.”

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