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Last Updated : Jul 02, 2020 08:10 PM IST | Source: Moneycontrol.com

COVID-19 impact | Celebrity endorsements may drop by 50%; Sonu Sood favourite of advertisers

This year, earnings from live events, show appearances are now zilch, said Rahul Khanna, Founder, BARCODE Entertainment.

Actor Sonu Sood (Image: Facebook)
Actor Sonu Sood (Image: Facebook)
 
 
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For brands, getting a celebrity on board is an investment to reach a wider audience. But investments by brands on marketing has reduced significantly due to the COVID-19-led disruption in the economy.

According to Indian Institute of Human Brands’ (IIHB) recent report on Celebrity Compensation, celebrity endorsement fees is likely to come down by 20 percent to 30 percent.

But experts feel it could be more.

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“Celebrity endorsement fees across mediums, digital and physical are set to crash. Expect at best a 30 percent cut to a worst-case 50 percent depending on star value. This goes across cricket and Bollywood. Remember both sets of celebrities don’t have running new content. There is no new cricket match. There is no new movie on the sets being shot or released,” Harish Bijoor, Brand Guru and founder, Harish Bijoor Consults Inc, told Moneycontrol.

Rahul Khanna, Founder, BARCODE Entertainment, an experiential marketing agency also estimates a haircut of up to 45 percent in celebrity endorsement fees. He said that this year much of the earnings from live events, show appearances have gone to zero.

“The current scenario might take a year to see recovery trends popping in,” he said.

Digital small, but important

Product launches got delayed due to the pandemic, there is no certainty around Indian Premier League and big on-ground campaigns are not happening. And in any endorsement deal with celebrities, offline deliverables are major chunk and digital is only a small part.

Also Read | From Priyanka Chopra to Virat Kohli: Star power is waning for fairness cream endorsements and more

“Out of the entire fee structure of a celebrity, about 3-5 percent of the total fee is a contributor from digital endorsements,” said Khanna.

He also suggested that in the current times the deal structure needs to be very lean. “For example, if a celebrity used to charge Rs 25 lakh for an offline show, now for digital presence he/she might need to charge anywhere between Rs 8-9 lakh.”

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Digital may be less lucrative for celebrities in terms of revenue, at present the medium is the only way to stay relevant.

Hence, many celebrities including Kareena Kapoor, Karan Johar, Ayushmann Khurrana, Rohit Sharma, Radhika Apte have done digital campaigns.

In fact, Khurrana was recently roped in as the brand ambassador for Tide, a fabric care brand from P&G.

“We saw Kareena Kapoor Khan in Lizol’s brand campaign, Akshay Kumar in Lodha’s Apna Ghar Apna Desh campaign and Shahrukh Khan in BYJU’S Ghar Ghar Ki Kahaani campaign. And all these campaigns were during lockdown,” said Khanna.

Karan Johar was recently seen doing a short video ad on Instagram for Godrej Expert Rich Crème hair colour.

Similarly, ed-tech firm upGrad had roped in Radhika Apte and other celebrities like Rohit Raj, Karan Tacker and Abish Mathew for their campaign #AageKiSoch. The campaign had received 30 million views.

While brands have cut spending on marketing, there are few categories that is upbeat thanks to the increased traction these brands are seeing amid consumers.

Categories like FMCG, OTT, ed-tech, gaming, BFSI and fitness space are actively spending on advertising.

Last month, IIFL Finance got cricketer Rohit Sharma on board as their brand ambassador for their campaign #SeedhiBaat with Sharma, a message advising people to follow safety guidelines to fight COVID-19.

“In such unprecedented times, celebrities and their management teams should establish digital channels of communication and keep their fan base engaged by innovating with content,” said Khanna.

He also pointed out that brands from their existing contracts are trying to get maximum leverage with celebrity management agencies so that celebs can perform on digitally assisted channels.

However, I don’t see many new contracts happening, he added.

Adding to this, Sandeep Goyal, brand expert and chief mentor of IIHB also pointed out that in the current situation when entire business and economy are in big trouble, brand owners expect celebrities to extend the tenure of current contract at least by three months because of the hiatus of the past 100+ days that all businesses have suffered.

Advertisers will continue working with celebrities

While new contracts with celebrities may be on hold, brands still look to collaborate with celebrities.

According to the IIHB report, 55 percent of corporates would continue to hire a celebrity ambassador despite the sluggish economy.

So, what are the top names in the minds of the advertisers currently?

According to a recent survey by IIHB, advertisers are more interested in celebrities like Sonu Sood, Akshay Kumar, Amitabh Bachchan, among others.

For the survey, 110 corporates and 550 consumers were interviewed.

Amid advertisers, Sood got the highest positive rating at 79 percent, followed by Akshay Kumar at 68 percent, Amitabh Bachchan at 59 percent, Ayushmann Khurrana at 45 percent and Taapsee Pannu at 39 percent.

Sood, Kumar and Bachchan are favourites amid consumers as well with positive rating at 86 percent, 79 percent and 65 percent respectively.

According to the survey, many corporates think that Sood would surely be on their consideration list as a potential brand ambassador, especially with products targeted at non-metro markets.

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First Published on Jul 2, 2020 08:03 pm
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