Business

Celebs love this local company because it’s making them rich(er)

Gisele Bundchen

From her Back Bay offices overlooking Boston Common, Janet Comenos has a lovely perch from which to people watch. But the busy executive rarely has time to get a glimpse of the high-profile types that might be wandering Newbury Street below.

Fortunately, she has team of people to do that for her.

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Comenos is the founder and chief executive of Spotted Media, an online advertising platform that seeks to solve a unique problem in our digital age. Each day, thousands of photos are taken of celebrities going about their daily routines — toting pricey handbags, wearing couture labels, and wandering into hot spots beyond the reach of mere mortals.

While the public consumes these images with a rabid fascination, paparazzi photos have long proved a dilemma for corporate brands. Companies are thrilled when they see a picture of a willowy actress sporting one of their designs, but unless they’ve already set up an endorsement deal with the celeb, they can’t do anything with the image — under federal law, a celebrity’s likeness or name can’t be used to promote a product without their express permission.

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Spotted attempts to solve this marketing problem by identifying the products and locations featured in paparazzi photos, and then brokering licensing deals between the photographers, celebrities, and brands. Comenos says she’s created a new marketplace for celebrity shots, and a legitimate alternative to “influencer” marketing campaigns, where brands orchestrate deals directly with celebs to promote products on social media, often by providing them with free goods or other forms of payment. The deals have recently faced increased scrutiny from the Federal Trade Commission.

“The FTC is cracking down on influencers for not disclosing the paid relationships between them and brands,” Comenos said. “With Spotted, that’s not an issue — we’re using real photos in an unsolicited fashion.”

But some skeptics wonder whether Spotted is further blurring the line between reality and marketing.

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So-called “right of publicity” issues arose recently during the NBA playoffs, when LeBron James jokingly grabbed a beer from a fan at courtside. But when Great Lakes Brewing Company spotted their bottle and tweeted the photo, toasting his choice of beverage, the basketball superstar threatened a lawsuit.

In 2014, actress Katherine Heigl sued the drug store chain Duane Reade after the company posted an image of Heigl carrying a shopping bag from the company on its Twitter feed. The case was dismissed after Duane Reade gave a donation to a charity Heigl supported.

Rights issues can also arise even when celebrities flout licensing laws. In April, for example, Khloe Kardashian was sued by a paparazzi photographer after she posted one of his images to her own Instagram account without his permission.

To sidestep these legal troubles, Comenos employs a team of “spotters” — fashion students, mostly — to scour the daily firehose of images distributed by the licensing agencies that paparazzi use to sell their work. As they peer at pictures of Beyonce eating breakfast or Reese Witherspoon strolling SoHo, the spotters tag the brands the celebrities are wearing, the restaurants where they’re eating, and the cars they’re dashing into.

The company, which launched in 2016 and has raised $4.75 million, now tracks 7,500 brands associated with the 5,000 most famous celebs worldwide, and says it has worked out paid deals with about 500 celebrities.

After obtaining the right to use the photos from the photographers and celebrities, Spotted snapshots appear as ads for the brands in the Facebook or Instagram feeds of people who have identified themselves as fans of the celebrity.

So, for example, when a Justin Timberlake groupie scrolls through Facebook, they might now encounter a sponsored Spotted post saying that “Timberlake was spotted in New York City sporting Nike workout gear.”

Many of the posts don’t even link out to the company’s website, as many brands use the ads only to build awareness, the same way they might put up a billboard in Times Square.

Using Spotted, brands can pay anywhere from a few thousand to tens of thousands of dollars per photo depending on the celeb’s profile. A top-tier celebrity like Gisele Bundchen might earn as much as $128,000 from a brand just for waking up in the morning and putting on something hanging in her closet.

In addition to brokering licensing deals, Spotted is also selling access to its massive trove of data about stars’ fashion choices that brands can use to better understand the marketplace. When combined with sales data provided by the brand, “we can see ahead of a trend whether a brand is going to become popular,” Comenos said, as celebrities are “predictors of everyday consumer behavior.”

Companies such as New Balance, UGGs, and John Varvatos are now using Spotted for their digital media campaigns.

“We recognize that many celebrities wear our brand,” Sarah Stahlnecker, global marketing analytics manager at Boston-based New Balance said in an e-mail. Spotted provides a “unique space within the celebrity/influencer segment of social advertising ... to maximize our spend, authentically reach our consumers and ultimately drive sales,” she said.

Comenos says brands have been eager to adopt a new marketing model. For years, they’ve used back-channel methods like L.A.-based seeding agencies — companies that promise get their goods into the hands of celebrity stylists.

The idea was that a celeb would like the clothing, a paparazzi photographer would shoot them wearing it, and a magazine or blog might run a photo of the product. It was largely a game of chance.

For many brands, social media — and the rise of influencer marketing campaigns — once seemed like a more direct way to reach potential customers than conventional advertising. But now, consumers are getting savvier and more skeptical of the scripted nature of these product placements. And the FTC recently sent 90 “educational” letters to influencers and brands, reminding them that any endorsement relationship should be clearly disclosed by prominently using the hashtag #ad.

“There are so many dark corners to the social space and to the influencers’ space,” Comenos said, “and the relationships between the paparazzi, the celebrities, and the brands in the past has also been a very shady, opaque space.”

Fran Hauser, former president of digital at Time Inc. and a paid adviser to Spotted, says it’s been successful “getting out ahead” of government oversight of influencer marketing. “I do think the FTC is going to continue to crack down,” she said. “This is giving brands a platform where they know that they’re not going to run into these issues.”

But ad-watchers are also turning a skeptical eye toward Spotted.

“They’re taking what could be generally be categorized as non-commercial speech and transforming that into commercial speech,” said Bonnie Patten, the executive director of Truth In Advertising, an advocacy group that has been tracking influencer campaigns on Instagram. While acknowledging that Spotted fills a niche for many marketers looking for authenticity, Patten worries that creating a new marketplace might inspire celebs to consciously wear clothing or use other brand name merchandise in the hopes that they might get a check in the mail from the manufacturer.

Celebrities know that their identities have commercial value, she said, “this is them taking that one step further, and monetizing their everyday life.”

Legally, the Spotted model appears to meet the standards set forth in the country’s right of publicity laws, said Stacey Dogan, a Boston University law professor who specializes in intellectual property.

“It seems to be a plausible business model that is taking advantage of the fact that celebrities really do have the ability to control the use of their image in this way,” she said. But while legally sound, Dogan said, she finds it “troubling, from a cultural perspective ... It just makes the celebrities take profit into account every time they make any decision about what they buy or what they wear.”

Comenos admits that celebrities could game the system, and says some agents already have started notifying the Spotted team when a famous person they work with wears a new brand. But she says that’s the nature of advertising, and celebrities have long known that they’re a “mechanism” for getting the world to care — and ultimately buy — products.

“We have some celebrities who are obsessed with the platform. It’s probably the easiest thing the celebrity can do to make money,” she said. “It requires nothing other than giving us the permission.”

Janelle Nanos can be reached at janelle.nanos@globe.com. Follow her on Twitter @janellenanos.
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