What's the ROI on Red Carpet Product Placement?

Michelle Markelz
Marketing News Weekly
Current average rating    
Key Takeaways

​What? The Oscars provide great visibility but little short-term return for fashion houses.

So what? The value in making a red carpet appearance can take a decade to be realized as brands build relevance and maintain aspirational appeal.

Now what? Aspirtational brands need to find ambassadors to a millennial audience whose purchasing power will come to fruition in the next 10-20 years.​

Fashion houses likely won’t see a surge in short-term sales, but celebrity endorsements build long-term brand relevance and maintain aspirational status  

Few venues match the undivided attention to fashion offered by the Academy Awards red carpet. On paper, hordes of celebrities modeling the fashion’s most prominent designers to an engaged audience of more than 20 million sounds like the perfect campaign. But the Oscars are not as lucrative for designers, at least in the short term, as they may seem.

“We know that there is an engagement level of a fan that drives sales,” says Stacy Jones, CEO of El Segundo, California-based entertainment marketing agency Hollywood Branded Inc. Jones’ agency conducted a survey last year, which found that consumers are 43% more likely to purchase clothing products worn and used by their favorite celebrities. 

"The question though is, there is a very small percentage of the world that can afford these designers. But it’s important for these brands to have this word-of-mouth appeal to keep them aspirational,” Jones says. Walk into Bergdorf Goodman, and it’s unlikely you’ll fetch an evening gown for less than $7,000—you might spend as much as $32,000—but red carpet dresses are often custom and won’t be found on the rack anyway.

“Celebrities help keep brands and these designers seen as the luxury level that one wants to get to. … Whether at end of the day [a red carpet appearance] is driving immediate sales, it’s more about the lifetime of the brand. Is it driving aspiration for the brand?”

Fashion source Racked.com took a quantitative look at the payoff for designers who dress celebrities on red carpets. This site found mixed correlations between the number of times a fashion house was featured on a red carpet and sales in the corresponding year. For example, Valentino, one of the most-worn designers, dressed 11 celebrities in 2013 and saw revenues nearly double in the same year. In 2015, however, after dressing only two celebs, the fashion house still turned a 36% increase in revenue.

Related Content

The strategy behind which celebrities fashion houses align themselves with is changing to maintain relevance to the millennial generation, says Jones. “You see the Kardashians on the runways of Paris, and years ago that would have been unheard of,” she offers as an example. “Times have changed. Designers know that the younger millennial celebrity is a massive influence on a market that, again, they’re not looking at necessarily tomorrow, but they’re looking at a decade down the line that they’re going to need to be in partnership with, appreciated by and in aspiration to.”

The Business of Bling

Celebrities usually wear gowns and garments on-loan from designers for red carpets, but jewels and watches are a different kind of exchange. “Celebrities, and more so their agents, have gotten savvier,” Jones says. "They don’t want to run risk of a celeb wearing [jewelry or a watch] by one designer and closing out the opportunity to potentially be paid by another designer for a much larger campaign.”

Those campaigns can be 12-36 month partnerships in which a celebrity can become the face of a brand. But even getting a watch on the wrist of an a-list celebrity for a single evening can fetch anywhere from $50,000-$250,000.

Author Bio:

Michelle Markelz
Michelle Markelz is a staff writer for the AMA’s magazines and e-newsletters. She can be reached at mmarkelz@ama.org.
Add A Comment :

Become a Member
Access our innovative members-only resources and tools to further your marketing practice.