In the midst of the current crypto crash, many people are a bit mad at celebrities who bought this stuff. Gwyneth Paltrow, Tom Brady, Reese Witherspoon and even Larry David have all been happy to help mainstream cryptocurrency over the past few months, not to mention now that things have gotten a little tough. For Matt Damon, ‘fortune smiles on the brave’… who apparently aren’t brave enough to say it might have been a little oops to get ordinary people to gamble their hard-earned money on hyper-assets – speculative.
If crypto was so sure to make you money to some degree, why would it need so many high profile celebrities? After all, money is the most famous celebrity out there.
Here’s the thing: Famous people endorse and support financial products and services all the time — products and services that fall within the sketchy spectrum. If you get mad at LeBron James for appearing in a Crypto.com ad, you should probably also be annoyed by those Tom Selleck reverse mortgage ads, or the places William Devane talks about buying gold, or the litany of A-listers entering SPACs. In the 1990s, Whoopi Goldberg was a spokesperson for Flooz, the cyber currency of the time that was eventually destroyed by crime and fraud.
It might seem a bit obvious to point out – celebrities are always making mentions – but I think they do, especially when it comes to money, it’s worth thinking about. Personal finance and investing should be a bit unsexy; the way you map your 401(k) isn’t particularly cool. Today, marketers, advertisers and the wider culture have managed to make it a hobby and a way of life. Trust in traditional financial institutions has declined so much. People might think Bear Stearns wasn’t doing great in the 2000s, so why not take a chance now on what Floyd Mayweather thought was a good idea now? Companies are able to maneuver this institutional mistrust by replacing cold, dodgy, faceless banks with lovable celebrities, to whom consumers may be more receptive.
Banks left customers “dry” after the global financial crisis of 2008, explains Ana Andjelic, brand manager and business sociology expert. “What is that trust replaced by? she says. “With brands, with celebrities. †
Yes, famous people are often rich, but not because they participated in a get-rich-quick scheme or made a smart investment in some obscure product. They often have financial advisors who help them manage and grow their wealth – and those advisors don’t tell them to get into dogecoin.
Celebrities = $$$
Companies use famous people to sell their products because they know it can work. According to a 2012 study by the Harvard Business School, athletes’ followers lead to a 4% increase in sales. Several studies have shown that celebrity advertising drives up stock prices.
Particularly when it comes to finances, the rich and famous are not the most influential in consumers’ lives, but they do make a difference. A 2021 Morning Consult poll found that 20% of investors and 45% of cryptocurrency owners would invest in cryptocurrency if famous people endorsed it (although still behind financial advisors, relatives or friends and trade journalists). Younger consumers may also be more influenced by fame – CreditCards.com found that 28% of Generation Zers and 24% of Millennials said they seek financial advice from social media and influencers.
As people no longer slump in front of Friday night network TV, the captive audience of ads, brands are increasingly relying on celebrities and influencers to connect with consumers, explains Shiv Gupta, digital marketing expert and director of the consultancy Quantum Sight. † “The channels are getting narrower,” he said. A celebrity can catapult your product to consumers through their existing audiences and spheres of influence. You can see how it fared with crypto. “You had the nerdsphere or the geeksphere pushing the concept of crypto as something that has potential,” Gupta said. “The next step was Larry David and everyone else who came in and started talking about crypto. It was more like saying, ‘You see, it happens a lot. †
The generalization of a financial product makes it more comfortable for consumers, giving them the impression that it is normal to try it. It can also make them forget about the bet, even in high stake rooms.
“Celebrities supporting brands is nothing new, we’ve seen that for decades. Selling crypto and NFT is of course much more complex and I would say it requires more professional responsibility than selling typical consumer goods,” said Anindya Ghose, a professor of business administration at NYU. “If you approve chips and energy drinks, that’s something else. †
If you bought a bag of chips because an actor said so and it got dirty, it doesn’t matter. But if you’ve taken out a reverse mortgage, which regulators warned about in advertisements, and you accidentally lost your house because Tom Selleck said so, that’s not so good. The focus is now on young people and crypto, but no generation is immune.
“There are people who say, ‘Well, I like Tom Selleck, I grew up with Tom Selleck, he seems like a famous man. After all, he fought crime Magnum IP Gupta said. “It’s a generation issue, he gets a little older with you.”
Probably don’t listen to celebrities talking about money
If you had asked me in 2004 if I had listened to the husband of CO or the husband of Good Will Hunting what to do with my money i hope i didn’t say it too but i probably would have said: Good Will Hunting dude. Turns out in 2004 I would have been wrong. You really shouldn’t listen to either one Good Will Hunting Guys, because Ben Affleck likes sports betting, which often isn’t ideal for the end user’s wallet either.
In the end maybe I should have said CO Husband, Ben McKenzie. He has a few comments about listening to famous people about money and crypto in particular… which you shouldn’t. McKenzie called celebrities pumping crypto a “moral disaster” in a 2021 article for Slate alongside journalist Jacob Silverman. “These rich and famous performers might as well ask for payday loans or seat their audience at a rigged blackjack table,” they wrote. (To be fair, McKenzie has something to gain here, too — he and Silverman are currently writing a book about crypto scams they’re probably getting paid for, and he’s made himself an anti-crypto celebrity.)
Celebrities may not have their fans’ best financial interests in mind. I love Reese Witherspoon, but his crypto tweet, at least for now, feels pretty irresponsible. “In the end, it’s all about the money,” Andjelic said.
It’s not just that celebrities encourage unnecessary risk. Kim Kardashian and Floyd Mayweather may have recently been part of a cryptopump and dump scheme. The boxer is no stranger to scandals in the crypto space: In 2018, he and music producer DJ Khaled settled the SEC’s charges for failing to disclose that they were paid to launch the initial coin offering, or ICO, such a dubious trend. promote. that you rarely hear. more about it. Actor Steven Seagal also got into trouble for something similar.
It’s easy and tempting to dismiss a lot of this – of course, celebrities shouldn’t be a reliable source of financial information. And regulators have a say in consumer protection here — the reinforcers are expected to be honest about their compensation. But famous people often creep into our way of thinking about money in a somewhat awkward way. If you think about it for a second, celebrities who associate themselves with even mainstream names in finance are a bit, well. Jennifer Garner looks good, but isn’t rich just because she’s super handy with her Capital One card.
Celebrities and financial brands team up to sell people a lifestyle, a pursuit of wealth that may not be realistic. The famous lend their reputation to products that can be questionable. They often do this without acknowledging their own financial interests – Tom Brady is not only a spokesperson for crypto exchange FTX, he is an investor in the company – or while ignoring that they can take risks, the average person might not. must do. And the downside risk of lending their reputation, if a project starts at the grassroots, may not be significant.
“It’s not like oh Tom Brady stopped doing something and now he’s just a crypto guy, you know? Andjelic said. “People do care.”
Except of course the people who lost.
We live in a world that constantly tries to deceive and fool us, where we are always surrounded by scams, big and small. It may seem impossible to navigate. Every two weeks, join Emily Stewart to look at all the little ways our economic systems control and manipulate the average person. welcome to The big pressure†
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