In the business of advertising and selling luxury brands, high brand equity is key. 
After all, a brand’s equity is ultimately derived from consumers- what they say about the brand, how they act towards the brand, their purchase and usage habits, etc. The notion of building brand equity seems simple enough: establish a credible brand that people like and will pay for. A more credible brand often lends itself to higher equity. 

The traditional, tried and true way of establishing said brand credibility is through the placement of advertisements through traditional media- broadcast, print, and Internet ads. Added credibility comes in other ways, frequently through the use of celebrity endorsements. Let’s face it, whether we use these brands or not, we all know how much Jennifer Aniston loves her Smart Water and that Eva Longoria’s hair has a healthy, vibrant shine from her L’Oreal hair color.

Yet, however beneficial celebrity endorsements may be when it comes to adding brand credibility and equity, they are also pretty risky. In dealing with public figures, you run the risk of being associated with any of their dirty laundry that could be dug up and put on display. Case in point, the Tiger Woods scandal a little over a year ago. After news broke of his extramarital affairs, many of his sponsors and the brands he endorsed were quick to part ways with him. 

In today’s market, you don’t necessarily need an A-list celebrity to lend credibility to your brand. Facebook, Twitter and other social media sites are quickly becoming a way for average, everyday consumers to share information, ultimately making them brand ambassadors in their own right. By “liking” a brand’s Facebook page, or following a brand on Twitter, consumers are endorsing products. They are willingly announcing to their entire network of friends and peers that they are users of a particular brand. Maybe they’ll share stories and post pictures that might entice others to go out and try the product or service for themselves. Their stories resonate with their surrounding audience of “friends,” thus making their favorite brands more credible and essentially increasing equity for those brands. Nevertheless, these social media sites can be a double-edged sword. Companies must be careful to monitor their social media pages and sites, as bad news travels just as quickly, if not more quickly, as good news. These everyday consumers have the power to destroy your brand equity just as easily as they can help skyrocket it.