Are celebrity gift lounges worth it? (column)

With TIFF drawing celebrities and sponsors to the spotlight, Dina Vieira points to pitfalls in one popular strategy.

By Dina Vieira

Celebrity gift lounges were all the rage when I first started in PR. I worked some client product into major celebrity gift lounges at the Grammys and Oscars in L.A. Many marketers believe that getting noticed by celebrities will put their product on the map. And, sadly, many entrepreneurs invest in these lounges with blind faith, hoping they will become an overnight success, which is nothing but an illusion on social media.

There is no such thing as overnight success in business, and in this day and digital age everyone wants pay for play. Especially celebrities.

So, will your product be picked up by a celebrity and snapped on their Instagram? In my experience, probably not. There are some celebrities who allow photos of themselves to be taken at lounges, and some will hold up a product and smile (the money shot). But more often than not, many prefer to support brands they believe in after they have negotiated and received compensation for it in advance.

I’m not suggesting celebrity gift lounges aren’t worth it for brands with huge budgets. But if you are considering investing your marketing dollars in a celebrity gift lounge, there are a few things you should know first.

The tax dilemma

Many celebrities get paid in U.S. dollars, so that means they pay taxes to the IRS. In recent years, the IRS mandated that “gifts” received by celebrities must be declared as income on their income tax returns (the reason being that some celebrities can receive gifts in the range of tens and hundreds of thousands of dollars).

As a result, many celebrities donate their gift bags (usually worth $100,000 to $200,000) to their favourite charities for auction. The “income” received then becomes a “charitable donation” and your product may never actually get into the hands of a celebrity to be snapped next to their smiling face on Instagram.

Quality of celebrity and product

I like to practice non-judgement, but let’s face it, we do it all the time, and celebrities are no exception. We give them A-, B-, C- and D-list status. In my experience, I have never seen an A-list celebrity like a Jennifer Aniston or Hugh Jackman stroll through a gift lounge to collect goodies that, in some cases, are obscure brands and of substandard quality. Besides, many celebrities have no need to pick up freebies and send assistants instead to collect the loot bag as a gift for their hard work.

No pics allowed!

Many years ago, I was representing a client at a Grammys gift lounge and Katy Perry (before she was a big deal) came in. However, her handlers advised in advance that there would be no talking to and no snapping pics of the soon-to-be pop diva. The only recognizable celebrity that came through that day who was open to chatting and snapping was 80s pop star Taylor Dayne. She was extremely kind, funny and made her rounds to all the booths, and that’s great for marketers who find her to be a suitable influencer for their brands. But for those brands that didn’t appeal to the Taylor Dayne crowd, the benefit was minimal.

Many up-and-coming actors and celebrities with a good heart will allow pics with a product, but it is a very rare occurrence. I caution marketers (especially entrepreneurs who expect a big celebrity tie-in to their brand via the money shot) that it probably will not happen at a celebrity gift lounge unless you’re willing to pay for an endorsement and/or negotiate a working contract. That’s done through their management team ahead of time.

The ROI conundrum

Having been on the client side, I know all too well about accountability and responsibility when it comes to managing tens of millions of marketing dollars and reporting ROI to the c-suite. From a PR perspective, the only coverage you will receive for partaking in a celebrity gift lounge is a mention along with the other 10 to 30 brands that participated.

If you are willing to share the spotlight to get some print, online and broadcast coverage, then participation makes sense for your brand. And, as many seasoned marketers know, short-lived events tend to be expensive feats that produce short-term media results. Also, if your corporate mandate is to have your brand stand out in editorial, then you may want to consider other PR strategies where your brand narrative won’t be diluted due to sharing impressions earned with (possibly competing) brands.

Dina Vieira is president and CEO of dvCommunications Inc.