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SpendSmart Gets BeBiebered

Adam Rust's picture

Posted April 15, 2013

When a comment by Justin Bieber veered beyond the comfort of mainstream taste last week, it demonstrated the risks that any company takes when its aligns its brand with a celebrity. In hiring Justin Bieber, SpendSmart is leading with the sizzle but hiding the steak.

Over the weekend, Bieber made a joke about Anne Frank. While the

comment was probably said with the best of intentions, it is public perception that matters and the reaction was not good.

To review: on Thursday, a small company pays a star $3.75 million. On Monday, said spokesperson says the wrong thing about a heroic victim of the Holocaust.

Celebrity endorsements have become common place in the under-banked space. Witness the role played by folks like Magic Johnson, Suze Orman, George Lopez, Montel Williams, Kim Kardashian and Russel Simmons.

The logic is built around affinity marketing, where businesses hope that people will transfer their trust and good will from a celebrity across to their product. For instance, a person might say "You know, I'm just like Kim Kardashian. Since she endorses the Kardashian Kard, its probably a good card for me."

As just about everyone is currently all-too-prone to say: "Really?"

Spend Smart is spending millions of dollars to sign up Justin Bieber as a Brand Ambassador. That is a lot of money for a firm that lost $3.5 million during the last three months in 2012. Granted, Spend Smart is in a period of rapid growth (revenues increased tenfold year-over-year) but it still represents one of their largest investments. Putting it a different way, Bieber is going to be earn $3.75 million for his involvement, but SpendSmart only paid $1.27 million in salaries over the last nine months of fiscal year 2012.


Aligning with Bieber does make sense. Bieber is a superstar within the world of post-teeny bop music, and SpendSmart is a card targeted at kids and their parents.

Moreover, for a brief moment it seemed like SpendSmart had spent their money smartly. More than a few people emailed stories to me about the Bieber contract. You could say that SpendSmart was trending.

But at this point, the question that SpendSmart hoped millions of parents would ask themselves  - "is my son is a lot like Justin Bieber?" - is suddenly a very different proposition.