Nothing sells like scandal. Seems like Moss gave them just that.  

What I feel is when something scandalous happens with a celebrity in between the endorsement period, customers take that event in isolation and don't associate it with the brand the celebrity endorses. Hence,as soon as the scandal breaks out, the marketing company should stop all the communication messages which contain that celebrity as a mode of communication. This can help in preventing any damage which otherwise would have happened to the brand. 

But this begs an important question: if a consumer actually believes Tiger Wood drives a Buick, do you really want to count this brain-dead prospect as a member of your target audience? Thankfully, I believe the numbers are dwindling, and that fewer Americans are falling for this nonsense. (Though I admit this trend doesn't apply to youth marketing for cereals and toys, nor may it ever affect the creepy deification of logo-laden racecar drivers by NASCAR Nation. But I digress.)

In short, I think people today are savvier consumers than ever before, and so the chasm between celebrity testimonials and credibility is widening. With that in mind, Kate Moss's recent de facto testimonial for nose candy, and the p.r. firestorm it created, inflicted far less damage on her brand roster than it would have even a decade ago, as consumers are slowly waking up to the truth: celebrities have nothing in common with us, and their testimonials are a sham. With no accountability exerted on the famous for their actions (see also: Barry Bonds, Hugh Grant, and the rapper of your choice), the brands that the rich-n-famous are paid to love are merely winning free press -- and reinforcing what we already knew: dirty laundry sells, and consequences are minor.

Now, do I encourage H&M to run to Winona Ryder as a Moss replacement? No, but anything short of murder these days seems tantamount to being 'cool' or at least 'rebellious' in the eyes of consumers and their growing indifference to immorality, and worse, classlessness.

Good news, bad news, no news -- with the message-barrage consumers endure daily, these three are more alike than ever, practically neutering the decisions made (good or bad) by anyone on a brand payroll in the court of public opinion. 

The behaviour by a celebrity does affect the brand... Negative or positive depends on the nature of behaviour. Behaviour which signifies rebellious attitude could be positve for a brand if the brand stands for such behaviour. Kate Moss snorting cocaine could be seen as such a behaviour; but on the other hand a boxer raping someone under the influence of alcohol or drugs would negatively affect the brand he is endorsing. A celebrity driving fast on a higway and getting a ticket for the same could be good for an auto/fuel/tyre brand he/she endorses but at the same time killing someone in the highway because of overspeeding can jeopardise the brand to a great extent.

The issue at the end is not about the celebrity or their actions but is about the way those actions are percieved and the extent of damage these actions would cause.Tommy Lee and Pamela's sex video could do wonders for a brand like Playboy but a video showing Tommy beating Pamela could hit the brand below the belt. The answers lies in what is acceptable to the target audience for the endorsing brand.