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So You Want to be a Star?

The advantages, and potential pitfalls, of serving as pitchman-in-chief depend on your brand—and on you.

The voice of corporate authority isn't as melodious, or commanding, as it once was. Over the past decade the credibility of American business and its executive suites has taken a series of body blows, at least in part due to a cascade of scandals, from Enron's public spectacle of fraud to AIG's stunning display of arrogance and greed, all of which contributed to the worst global economic meltdown since the Great Depression.

The top executives of companies have been put on the defensive, both by shareholders and the public. Some are responding by coming out of the boardroom and into the public's front rooms by appearing in ad campaigns. The goal can be inspiring confidence or exerting damage control—or, in the case of General Motors Chairman Edward R. Whitacre Jr., both.

But does that personal executive touch actually change hearts and minds to inspire credibility? According to a poll of company executives conducted by LinkedIn for AdWeek the short answer is: not much.

Overall, 49 percent of respondents said that using CEOs made no difference in an ad's credibility. A little more than a third, 36 percent, said it made the ad more credible, while a significant 14 percent considered the ad less credible.

When breaking down the responses by age, the level of distrust is fairly consistent: 13 percent for those 18 to 24; 14 percent for the 25-to-34 group; 15 percent for 35- to-54s; and 18 percent for those over 55. But perhaps the most telling statistics come from looking at a breakdown of the respondents' job titles: While 12 percent of company owners and 20 percent of Clevel execs found ads headlined by CEOs less credible, 40 percent of C-level execs found the ads more credible, revealing an intriguing perceptual rift. (See chart.)

Marketing and advertising executives are equally split on the issue, largely because successfully using a CEO in ads depends on a number of shifting variables. These include whether the executive founded the company or is a hired gun, how long they have been with the company, the public's perception of the company, the public's perception of the CEO, the general financial health of the company, and its recent history. Then there are personality and demeanor— does the CEO come across as likable, believable and accessibly down-to-earth? Or suspiciously slick?

For Emergencies Only

Perhaps the most famous CEO campaign was Lee Iacocca's in the early 1980s. Suit and tie notwithstanding, he managed to convey blue collar scrappiness and rehabilitate the Chrysler brand by taking his case directly to the American public. In bringing the company back from the brink of bankruptcy, Iacocca became the poster boy for corporate integrity and trustworthiness. Chrysler's turnaround spurred other top executives to get out from behind their desks and step in front of the camera. But few matched Iacocca's success.

"It's not a given that CEO presence alone would move the needle on impressions," observes Kaan Yigit, president of Solutions Research Group. "It's important that the image the CEO portrays is in tune with the image of the brand and company," he notes.

And used sparingly.

CEOs are not "groomed to be telegenic, or funny, or pitchmen, so putting them in ads is a bit of a force fit," points out Rich Vancil, vice president of IDC's Executive Advisory Group. "The CEO should be in advertising primarily when the weight of the message demands it," he adds, citing the 1982 Tylenol poison pill scare and Chairman Whitacre's efforts to jump-start GM as examples. "In ordinary times, the gravitas of the CEO is probably not warranted."

Last year was anything but ordinary for GMs. Bob Lutz, GM's former vice chairman of marketing and communications, felt that extraordinary times called for extraordinary advertising measures. Confident their cars can compete with any import in fuel economy, quality, safety and design, GM created the "May the Best Car Win" campaign and the 60-day Customer Satisfaction Guarantee.

Chairman Whitacre was recruited "because he brought the credibility of an outsider," explains Lutz. "He was able to communicate that when he came to GM, he was surprised by the quality and performance of GM products." Lutz adds that there is no "hard and fast rule for the use of a top executive in an ad campaign. Every situation is different." In that situation at that time, he believed Whitacre would effectively "convey the message that it is not business as usual at GM."

GM was pleased enough with the campaign to send Whitacre back on screen in April to report on the company's repayment of loans to U.S. and Canadian governments and acknowledge the public's anti-bailout anger. "I can respect that," he says, inviting viewers to check out the "new GM."

Even so, not everyone is sure that Whitacre was the best choice. Al Ries, co-founder of marketing consulting firm Ries & Ries, argues that the effectiveness of executives in ads depends on how well known they are. "For example, few people have ever heard of Ed Whitacre," he says. "That in itself would make him a poor choice for a spokesperson. On the other hand, Charles Schwab was a well-known and credible person before he appeared in Charles Schwab advertisements. He had generated a lot of favorable publicity as the man who invented the discount- brokerage idea."

Name recognition and reputation indeed figure heavily in a CEO's suitability as a spokesperson, agrees Andrew Benett, CEO of Boston-based ad agency Arnold Worldwide. He played a key role in the successful 2008 Charles Schwab campaign produced in the wake of the economic crash (see "Success for Schwab," at right). "Personality, integrity and track record are all essential," says Benett. "If the agency and client team don’t have complete confidence in the CEO—that he or she will behave in an admirable way, stay with the company for a significant period and resonate with consumers in a positive way—it would be foolhardy to even consider using him or her in ads."

Strategy or Ego?

How much should the CEO be involved in the decision to become a spokesperson? While Lutz believes "lead executives— whether they be the CEO or chairman—need to set the general direction for the company," he also stresses that "the actual execution of messages to support the corporate strategies must be developed and executed by the marketing, advertising and communications professionals."

It's that balance that leads some marketing executives to question if it's ever appropriate for a CEO involved with the marketing strategy to inject himself into an ad, because the line between strengthening the brand and indulging the ego can be blurry. Ries, for one, believes "that decision should be made by [the CEOs] staff and his advertising or marketing consultants. It's an accepted principle that if an executive has a personal involvement in a decision, he should recuse himself."

"Marketing really has two components: strategy and tactics," Ries explains. "Both are important, but strategy is by far the most important component. A good strategy can win with bad tactics. A bad strategy can't win even though the tactics are good. The CEO—or other high-level executives—are invariably involved in strategy decisions. They don't, however, usually get involved in the tactics."

Whether CEOs should even be involved in marketing strategy decisions is also under debate. "Most are almost totally ignorant about good marketing strategy," says Ries. "Look at the problems of the automobile industry, the airline industry and the banking industry. It's a disgrace. GM is dying because it failed to use good marketing strategies to build any one of its eight brands. Consumers don't just buy transportation. They buy brands, which is why Mercedes-Benz, BMW and Lexus outsell Cadillac by a wide margin."

IDC's Vancil takes a different view. "Advertising should further long- and short-term goals, so a CEO who is not reviewing or okaying the advertising themes and messages to make sure they're consistent with the company mission is not doing his or her job."Whether the top executive should get involved in tactics "depends on the seriousness of the situation: the more serious equals more involvement," which "shows that company is committed from the very top."

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