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Ever since actress Lillie Langtry appeared on a pack of Pears soap in 1893, stars have lent their faces and names to the promotion of branded products, and firms have fallen over themselves to pay for the privilege.

There are two strategies that can be applied to the role of celebrities as marketing tool: with a celebrity licence, the individual affixes their likeness or logo to a product, while with celebrity endorsements, the star lends their name to someone else's product. It is these endorsements which, although risky, are the more relevant for marketers.

Companies spend millions to get their products endorsed, and according to Uche Okonkwo, a business strategist in Paris, one in four TV advertisements now use celebrities, compared with one in eight 10 years ago.

David Beckham, who has deals with brands from Gillette and Coty to Adidas and Police sunglasses, is now worth about £60m through endorsements and advertising alone, according to Bailey Beeken, show director of the Licensing International in New York. Industry speculation estimates that Nike spent $192m on its celebrity endorsement campaign in 2004.

Even comparatively smaller brands are using personalities to promote their products; consider the effect models Twiggy, Erin O'Connor, Laura Bailey and Noemie Lenoir have had on Marks & Spencer's womenswear sales. Elsewhere, there is watch brand Tag Heuer's link with Brad Pitt, L'Oreal and its host of 'worth it' girls - from Jennifer Aniston to Desperate Housewives' Eva Longoria - Richard Branson and Samsonite luggage, and even Trinny and Susannah with Nescafe.

'Celebrities can build, refresh and add new dimensions to brands,' says Rick Isaacson, vice-president at IMG, a US licensing agency specialising in sports, entertainment and media, who is also chairing a seminar at the Licensing International 2006 exhibition in New York (see box, page 36). 'What celebrities stand for enhances the brand, and marketers save valuable time in creating the credibility their client needs to build its brands,' he adds. 'When consumers see a credible celebrity endorsing a product, they think that it must be OK.'

This is all very well - until the celebrity loses credibility. As supermodel Kate Moss proved not long ago, endorsement can cause grief if the personality gets into trouble. Moss was the face of four cosmetic and fashion groups when the so-called 'Cocaine Kate' scandal broke. The intense criticism that ensued in the media tarnished both her image and potentially that of the brands she endorsed, which led some of them to drop her.

As well as inappropriate behaviour, there is a danger that a celebrity's profile can be so big that it overshadows the brands they endorse. When Pepsi ditched singers Beyonce Knowles and Britney Spears from its advertising, it did so because the soft-drink giant decided the celebrities were getting more publicity from the campaign than its brand. It consequently decided to concentrate its efforts on its brand proposition without endorsement, as did car marque Chrysler when it dumped Celine Dion from its ad campaign because, say insiders, 'the Dion commercials produced great sales for the singer, not the car'.

But such instances are rare. When Moss fell from grace last year, the use of celebrity endorsement was not questioned; the only moot point was who would be suitable to take her place. And the fact that the supermodel recently signed lucrative deals with several fashion houses, including Calvin Klein, which led to her being renamed 'Comeback Kate', suggests that not even scandal can get in the way of some celebrities.

However, it can, for a number of reasons, be tough to choose a suitable star. While many make a decision based on gut feeling, Ian Downes, founder of Start Licensing, believes brand owners should consider the appropriateness of the association, its potential for their brand and how the association might develop.

'Key questions for the brand should be about the fit as well as risk assessment,' he says. 'This can include a number of criteria, ranging from the celebrity's ongoing profile - whether they will remain in the spotlight - through to the likelihood of their private lives harming the brand. Brand owners must also understand how the celebrity sees their equity being developed - one concern must be that they are not overused commercially.'

Walkers, which recently signed Charlotte Church to feature alongside frontman Gary Lineker in its Sensations crisp campaign, chooses its endorsers carefully, according to a spokeswoman. 'We work with our agencies to assess a celebrity's suitability for the brand and whether they fit with the creative concept.' She adds that the Welsh singer was chosen because 'she is a real woman with a luxury lifestyle, which we felt fitted perfectly with the Sensations brand'.

Church, who reportedly pocketed a £100,000 fee for the spot, is the latest in a long line of stars to appear alongside the former England footballer during the course of his relationship with Walkers. Victoria Beckham, Kate Winslet, Tara Palmer-Tomkinson and model Helena Christensen, not to mention fellow sportsmen Bobby Robson, Terry Venables, Paul Gascoigne and Steve Redgrave, are just some of the celebrities who have lined up with him since 2005.

Experts agree that credibility and attractiveness play an important role in creating effective endorsement communications. They are also vital in determining how well a celebrity might work for a brand.

Another key factor is whether they are easy to work with.

Once a brand finds an appropriate frontman, it should begin to plan how it will develop a long-term relationship in order to make real money from the partnership; payback, say industry experts, can only be maximised from using that celebrity regularly over a long period of time.

Lineker's 11-year relationship with Walkers reveals how repetition can strengthen the association for consumers who are already aware of the endorsement, as well as increase the number of consumers who begin to link the brand and the celebrity, and thus boost the bottom line. According to an Institute of Practitioners in Advertising submission in 2002, Lineker's endorsement was delivering 'an immediate return on investment of £1.70, building to £5.10 in the long-term'.

While relatively few brands can lay claim to the longevity of this relationship - or such a return - celebrity endorsement shows little sign of waning.

In fact, licensing commentators agree that it is growing at pace because for the majority of marketers, the reward is clearly worth the risk.

LICENSING INTERNATIONAL 2006

Date: June 20-22

Venue: Javits Convention Centre, New York.

The show Football legend Pele, who represents brands as diverse as Coca-Cola, MasterCard and Viagra, will be at the Licensing International 2006 looking for more endorsement opportunities. Also represented at the show will be Princess Diana's former butler Paul Burrell, who has launched a line of dinnerware and is hoping other manufacturers might want to license his name and image.

Both will be joining more than 525 leading licensors and agents, representing nearly 5700 properties and brands to more than 23,000 anticipated visitors.

Organised by Advanstar, Licensing International 2006 is the annual meeting place for anyone involved in the £100bn industry. UK properties and companies exhibiting include Manchester United, Granada, BBC Worldwide, Royal Ascot, Champneys, Paddington Bear, Beatrix Potter and Peter Rabbit.

This year's event sees the expansion of categories including corporate brands, food and beverage, home furnishings and consumer electronics.

The programme will include a session on 'The ins and outs of celebrity licensing', chaired by Rick Isaacson, senior vice-president of IMG.

CASE STUDY: KELLY HOLMES/SAINSBURY'S

At a recent conference, Sainsbury's chief executive Justin King is reported to have claimed that his supermarket's 'Active Kids' initiative was 'the most successful of its kind in the UK'.

The schools-equipment scheme, which is fronted by Dame Kelly Holmes, is still ongoing, so results for this year are not yet in. However, following its launch last year, it signed up 86% of the UK's schools, tripling their average annual PE budgets and generating £17m worth of sports equipment for schools.

It also delivered a substantial uplift in sales for Sainsbury's - when 'Active Kids' ran in the second quarter last year, it was responsible for 75% of that quarter's uplift, according to Robert Crumbie, Sainsbury's sponsorship manager for Active Kids.

'We can't isolate her influence, but anecdotal evidence shows Kelly has made a powerful contribution,' says Nicole McDonnell, group account director at Dynamo, the agency behind the scheme.

'Kelly is the ideal person to be the Active Kids ambassador,' adds Crumbie.

'Her message is for kids to keep on trying until they find what activity suits them.'