Even rockin’ rebels can be enticed to make money from gear endorsements.

Almost everyone I know claims they choose their instruments for sound and playability. Some of us will even allow that we also think they should look cool. However, I find that few players will come right out and cop to being influenced by a celebrity endorsement. So why are magazines and websites full of endorsement advertising? It’s a complex issue, and when you scratch the surface, it reveals a myriad of cause-and-effect scenarios. Some might surprise you.

Endorsements are as old as commerce itself. They precede print advertising by going back to kings’ clothiers and medieval blacksmiths who promoted their prowess with wealthy client associations. The implied message? If it’s good enough for them, it’s good enough for you.

Marketers know endorsements can be a powerful tool. Whether you love or hate the concept, it drives much of the guitar industry one way or another. When you see a pro guitarist promoting a product, are you turned off or do you afford that brand more credibility? Does your reaction depend on what you think of the endorser’s music? Are you skeptical of the artist’s intentions or are you tempted to consider what they are hawking? Regardless—even if you avoid products from companies that actively publicize their artist associations—you’re still being manipulated by the whole exercise.

Research published by financial analyst Jeroen Verleun and Harvard Business School professor Anita Elberse shows that companies often witness both a bump in sales and stock-price increases with the very announcement of a major-celebrity endorsement deal. So, theoretically, the data is on the side of using successful guitarists as spokespeople. The tricky part is how that promotion is accomplished.

Let’s review the terminology before we go much further. The company whose product is being endorsed is referred to as the endorsee, whereas the artist is called the endorser. This is because artists lend their name (often for compensation) to the company and its product—just as you would endorse a check. There is transaction in any human interaction, and both parties in this scenario feel they have something to gain.

It might be as simple as artists feeling that being associated with a major company will help their careers, but sometimes these endorsers misuse the nomenclature and say something like “I’m being endorsed by XYZ guitars.” At the entry level, most (but not all) companies simply offer to sell products to the musician at a reduced cost in exchange for use of the artist’s name on a list. This is no burden whatsoever to an equipment company that uses the dealer cost as the artist’s “accommodation” price. In effect, only the dealer is cut out of the profit, and the company justifies this as promotion for all involved.

I’ve witnessed endorsers abusing this by reselling guitars at a profit—one of many scams in the endorsement world.

The B level is the next rung up on the endorsement ladder. This might be a band member whose celebrity is on the rise. These lucky ducks may receive one or more instruments in exchange for the agreement to use their names and likeness in advertising. Furthermore, this rank of artists can often buy additional equipment at accommodation prices. I’ve witnessed endorsers abusing this by reselling guitars at a profit—one of many scams in the endorsement world.

At the top of the food chain resides the A-list endorser—a guitarist who either has enough celebrity visibility to create mass awareness of the company’s product, or sufficient musical clout to sway geek opinion. At this level, signature-model instruments can provide a royalty payment revenue stream for the artist. Sometimes a yearly retainer fee can be agreed upon, which is rarely a matter of just writing a check to the musician. For example, a contract can stipulate that the artist must be available for a minimum number of days for trade shows or dealer clinics, and the yearly total of all of this (appearance fees, cost of travel, and instruments supplied) will be the final figure presented to the artist’s management as the value of the endorsement. Clearly, the musician is absolutely a paid spokesperson of the company in this kind of arrangement. These scenarios are by no means the only way that endorsements are structured, because not every musician is concerned just about the bottom line.

In today’s shifting musical climate, artists can no longer rely upon record sales for income. Touring is expensive and merchandise sales barely fuel a tour van, so saving or even making money from endorsements is attractive. But the situation is becoming sensitive as the ethics and legality of endorsement advertising comes under increasing scrutiny. The internet has created a Wild West of product shills who are paid to post positive remarks or reviews, and government agencies are keen to stay on top of all this.

The Federal Trade Commission publishes guidelines for both advertisers and endorsers that, in effect, underline the idea that the words of an endorser are not just opinion, but the statement of a paid partner of the marketer. These guidelines say that if there is monetary or quid pro quo exchange for endorsement, the ad is misleading unless the connection is made clear. These guidelines are not only for print, web, and television advertising, but for blogs as well. Eventually, we may start seeing disclaimers in ads.

As an observer, it’s sometimes hard to determine if a piece of gear is being endorsed for its merit or because the deal was sweet. To me, the best endorsement is when I see and hear the artist using something live onstage or in the studio. I also enjoy video rig rundowns because in those candid moments, you can usually tell where the real allegiances are and what stuff actually gets used. We’re all interested in getting great sound or versatility, and hearing is usually believing.

But I can still be swayed by a cool look. Is that wrong?