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In this tough economic environment, it's no surprise that big brands are thinking more carefully about celebrity endorsements.

After all, celebrity endorsements don't come cheap, they don't always deliver and, as we've seen recently, sometimes celebrities' bad decisions put them at odds with the values of the brands they're paid millions to represent.

According to David Reeder of GreenLight, L.A., only 7% of the television ads that were shown at this year's Grammy Awards contained celebrity endorsements. 13% did in 2007 and 21% did in 2008. An obvious correlation: stock prices. When the US market was peaking in 2007, it was easier for many brands to spend big bucks acquiring star promotional power.

Today, Reeder says that brands are being extra cautious and are turning to the group of "tried-and-true" names that have managed to avoid scandal and shame over a longer period of time. This type of reliability is truly what's golden, as the recent Michael Phelps incident demonstrates.

But brands are also moving away from celebrities altogether in some cases. Some are turning to up-and-comers who aren't currently well-known to the public. A lot has been made in recent years about 'internet celebrity' and many have suggested that brands can build their own celebrities, often using their own employee advocates. Certainly that's a more cost-effective option in today's economy and I suspect more brands will consider creative ways to build compelling endorsers that don't cost them an arm and a leg, even though, as Reed notes, there's still a lot of value that a good celebrity endorsement can provide.

But I think the larger issue for brands to consider is that it never makes sense to overdo the sizzle. Brands have to deliver the steak - especially when consumers can't afford to pay 5-course prices for a 1-course meal.

And that's where I think many brands have lost it over the years. Most internet entrepreneurs and small businesses can't afford celebrity endorsements. So most have to focus on creating great products. If they don't, they die.

In my opinion, too many brands have used celebrity endorsements as a crutch; as a way to boost their products without actually boosting the products themselves. It's smart marketing for sure - when you have the money.

Hopefully as more brands lose that ability, they'll get back to basics. Because, in reality, most of us never cared about what Michael Phelps was endorsing as much as we seem to care about what he's smoking.

Patricio Robles

Published 18 February, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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