Why do big businesses use testimonials for ads?

At least I know better when I hear a testimonial of a product. How many of you out there believe testimonials? Is it because it is given by someone you know and trust? Or are you sceptical of these products's testimonials . The giver of the testimonial is always a paid actor /actress. Why is it big business greed always takes center stage when it comes to advertising.

I believe, for some, there will be truthful and sincere testimonials but the tactic of using testimonials to brand a product is often abused. Either wrong information or too ideal results are mistakenly being conveyed to consumers.

Testimonial ads is a form of marketing - to create brand awarness for products and increase sales. If such method works in penetrating into consumers, obviously producers/companies would want to execute such tactic.

Afterall, whether to purchase a product very much depends on individual. If one is really swayed to buy the product due to the testimonial ads, it just proves that the company had chosen the right marketing plan.

The reason that advertising firms keep using this tactic is because there are still enough stupid people out there who buy into it. They see some celebrity up there on TV hawking some useless product and they think....Hey good enough for them then I should be gettin me one of those too....Advertising is all about greed....

Re advertising endorsement - Well its partly because its based upon recognition (recognise the star and then recognise the product). And partly on the fact that it often works.

Guess it also to put some human dimension to the company, cos so many are faceless leviathians!

testimonials are a promotional tool in advertising that exploit the recognition which consumers give to role models in advertising.
it helps to stimulate trials of the product at least, merely because a role model has used and endorses the product. the consumers trust the judgement of role models and its therefore easier to move them from the 'awareness of the product' stage, through being informed about the product, to the stage where they want to 'try' the product and finally where their experience of the product matches their expectations, they adopt and continue purchasing and using the product.
testimonials thererfore are a promotional tool to help move consumers along that continum from 'awareness' through 'information' to 'trial' of a product.

To associate qualities of the endorser with features of the product/service. For example, the guy from law and order who conveys credibility and trust is an excellent endorser for particular brand financial management services where people look for credible and trusty institution to manage their finances.
After # number of repetitions, viewers involuntarily start to associate the brand with the qualities.
Association is the main reason why endorsers 'sell' their image. btw, in some cases the advertisement is both leveraging for the product/service and for the endorser.