Brands expect celebrities to drop endorsement fees
There has been overwhelming negative news on the business and economic front for the last three months. Retail has been shuttered; consumer buying has come to a screeching standstill; television has faced a complete drought because of non-availability of fresh content; Work From Home has meant that everyone is home and not indulging in shopping for clothes, cosmetics, etc.
Brands have seriously been impacted, and the outlook in most categories continues to be tepid. As such, many brand managers have been talking in hushed tones about “sharing the load” with not just agency partners, media houses, content agencies, but also their celebrity endorsers.
To quantify the expectations of brand owners, the Indian Institute of Human Brands (IIHB) conducted a survey, reaching out to 110 clients to figure out what they expect in terms of celebrity compensation, going forward.
The survey reveals 64% clients said celebrity endorsement fee should come down; 15% clients felt the fees will not come down despite the inclement business conditions; 22% had no opinion.
Of the clients that felt that the endorsement fee should head southwards for top 10 celebrities like Virat Kohli, Akshay Kumar, Deepika, Ranveer, Ranbir, Alia and the like, 22% felt it should come down by 20-30%; 15% felt it should reduce by 30-40%; 12% felt it should reduce by 40-50%; just 11% felt that the downward revision should be 10-20%. Four percent clients went as far as to say that celebrity endorsement fee should come down by 50% or more.
For the Top 10-20, second tier celebrities like MS Dhoni, Rohit Sharma, Hrithik Roshan, Kangana Ranaut and similar, 25% clients felt that the fees for such celebrities should come down by 20-30%; 14% clients felt celebrity fees should reduce by 30-40% while 12% clients felt the reduction should be in the 40-50% range. Despite wanting major concessions and reductions, the good news for celebrities is that the faith of clients in brand ambassadors has not really ebbed despite the downturn. When asked if the value of the Bollywood celebrity would diminish if movies start to release only on Netflix/OTT, 54% said it did not impact their selection. Fifty-five per cent clients said they would continue to hire a celebrity ambassador despite the sluggish economy.