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Wednesday, November 23, 2011

Twitter changes business of celebrity endorsements

Rapper Snoop Dogg gave props on Twitter to an ad for the Toyota Sienna minivan. Actress Tori Spelling linked to a website for rental cars. And reality TV star Khloe Kardashian soliloquized about the brand of jeans that accentuates the famous Kardashian derriere.

"Want to know how Old Navy makes your butt look scary good? Ask a Kardashian," the reality TV star tweeted.

These celebs aren't just writing about family cars and fashion choices for the heck of it. Stars can get paid big bucks to pontificate about clothes, cars and movies in the 140 characters or less allowed per tweet. That adds up to about $71 per character.

Twitter, which in its five-year existence has reshaped how people shop, vote and start revolutions, is now changing the business of celeb endorsements. A growing number of firms are hooking up companies with stars who get paid to praise products to their thousands -- sometimes millions -- of Twitter followers.

The endorsements range from subtle to blatant; the celeb pairings from sensible to downright odd.

Singer Ray J urged his 600,000-plus Twitter followers to see the horror movie "Saw 3D." Lamar Odom, L.A. Lakers forward, tweeted to his nearly 2 million followers about hip-hop artist and entrepreneur Jay-Z's book "Decoded": "My man Jay-Z ... only rapper to rewrite history without a pen. Until now."

Of course, anything on Twitter is short-lived and reaches only a small, self-selecting audience: Research firm eMarketer estimates that only 11% of U.S. adult Internet users are on the site. And even though some celebs have faithful followers, it can be hard to measure whether their tweets lead people to spend.

Still, celeb tweets can be a way to grab an audience. And paying a celeb to tweet is much cheaper than a traditional advertising campaign. Want a tweet from Khloe Kardashian? That will cost about $8,000, according to social media marketer Izea. Looking for a cheaper option? Ray J is about $2,300.

Companies like Izea, and twtMob usually pair products with celebs through a combination of software algorithms and Hollywood instinct. The companies say they use many metrics to gauge the effectiveness of a paid tweet, such as the number of times it gets reposted by others.

When got Charlie Sheen to tweet for in March, the actor was getting fired from his sitcom "Two and a Half Men." Within an hour of Sheen's first post, got more than 95,000 clicks.

"I'm looking to hire a #winning INTERN with #TigerBlood," tweeted Sheen, who had just recently signed up for Twitter and now has more than 5 million followers.

Dan Smith, vice president of marketing for website CampusLIVE, which helps advertisers connect with college students, hired Izea to help him get a celebrity to tweet about his company.

Smith polled his interns and they picked Lindsay Lohan, the actress most famous for her run-ins with the law. According to Smith, CampusLIVE paid Lohan about $3,500 for one tweet: "These challenges for college kids on #CampusLIVE are SO addicting!"

The post to Lohan's 2.6 million fans drove about 4,500 clicks to the website, Smith said. But he also said he wasn't sure if he'd use her again -- because he's already tapped her fan base.

For her part, Lohan on her own time tweets about topics like fulfilling her community service sentence. But she has also posted comments for Izea on a few occasions, the company says. Her tweets about wind energy ("While saving the world ... save money! I love it!") and about a gold mining company ("R ur savings safe? Think again!") were paid endorsements, according to Izea.

Those posts, along with the CampusLIVE tweet, included the characters "#ad" at the end, which indicates that a post is a paid endorsement. But Lohan's publicist, Steve Honig, says that Lohan does not sell her tweets: "She uses Twitter to communicate with her fans and let them know what she's up to."

Like any endorsement, celeb tweets come with the risk that a star's behavior will not coincide with the company's image. And of course, there's a science to picking the right one: Will consumers buy that their favorite rapper drives a minivan?

Twitter generally allows the paid tweets, as long as they're posted manually and not automated by a computer program. The Federal Trade Commission suggests endorsers end their tweets with the # symbol, called a hash tag, and the letters "ad" or "spon," short for "sponsored by," to clarify that they're ads.