We have all been privy to the effects of coronavirus and its consequent economic impact. Brands and companies have been struggling with keeping up operations amid the crisis with business operations disrupted and strict social distancing norms imposed by governments. The global lockdown has resulted in falling revenues and budget cuts by brands. Naturally, this is trickling down to how much these brands are willing to spend on celebrity endorsements.
The Indian Institute of Human Brands (IIHB) recently conducted a survey of 110 companies. It released a report to better understand the impact of lockdown on brands as they have been pushed to relook at their marketing strategies, including celebrity endorsements. The report states that majority of marketers (64%) said that celebrity endorsement fee should come down post pandemic. This sentiment has resulted from a sharp decline in consumer demand, market downturn and an uncertain road to recovery.
The report stated that many respondents said the top 10 celebrities, including the likes of Virat Kohli, Akshay Kumar, Deepika Padukone, Ranveer Singh and Alia Bhatt, should cut down their endorsement fee by 20-30%.
Currently, Virat Kohli is the most expensive celebrity (according to industry estimates) with brand endorsements like Puma, Boost and Manyavar and charges almost ₹5-₹5.5 crore a day. Likewise, Alia Bhatt, who charges ₹1-₹2 crore a day, is a popular choice with brand endorsements like Frooti, Garnier, Vicco and Lay’s. These are followed by the next leg of celebrities like MS Dhoni, Hritik Roshan, Kangana Ranaut and Rohit Sharma.
Marketers strongly feel that celebrities and brand ambassadors should volunteer to offer fee reductions given the current market conditions. In another scenario, celebrities could also look at extending their tenure of contracts in case a fee cut is improbable.
“The survey findings are interesting at two levels. They indicate continued trust and faith in celebrities by brand owners. The possibility of almost no cricket, and the diminishing of the aura of filmstars sans cinema releases, does not seem to be impacting clients in any negative way. However, given that the entire business and economy are in big trouble, brand owners expect celebrities to also take a hit in incomes, and also show visible concern by giving extensions in current contracts because of the hiatus of the past 100+ days that all businesses have suffered,” says Dr. Sandeep Goyal, Chief Mentor of IIHB.
On the parallel, IIHB conducted a separate survey in which it interviewed 550 consumers and 110 corporate customers and asked them to rate the performance of celebrities during the lockdown. Interestingly, Sonu Sood topped the list showing that consumers have developed a positive image of the Bollywood actor due to his efforts for migrant workers. Resultantly, a large number of marketers said they would consider Sonu Sood as a potential brand ambassador for their brand, especially in case of products targeted towards non-metro cities. Akshay Kumar and Amitabh Bachchan followed in the next 2 positions due to their donations and public service campaigns.