Coronavirus took its toll on an unlikely human endeavour – it shrunk the brand value of India’s top celebrities in 2020.
According to Aviral Jain, Managing Director, Duff & Phelps, the country’s top 20 household names, for the first time in about four years, saw a drop in their brand value.
"Because of COVID-19, there was a situation of confusion, chaos. This was a period where everything came to a standstill, as there were no photo shoots or campaigns. It was difficult for even A-list celebrities to find new endorsement. This is the first time in last four years we saw a drop in total number of endorsements for the top 20 celebrities," he said.
Celebrity power weakens
According to Jain, before the Coronavirus outbreak, the number of endorsements were increasing year-on-year by 15-16 percent. "From 200 brands, we saw the number of brands going to 370 for top 20 celebrities in the last four years. However, last year this number dropped to 350," he stated.
According to Celebrity Brand Valuation Study 2020, titled 'Embracing the New Normal', the overall brand value of top 20 superstars in the year saw a decline of about five percent, coming down from USD 1.1 billion in 2019 to USD 1 billion in 2020.
Even the biggest name of them all, cricket superstar, Virat Kohli, did not see any significant increase in his brand value in 2020, as compared to 2019.
Kohli, who had a brand value of USD 237.5 in 2019, saw a marginal rise to USD 237.7 million last year.
However, Jain also pointed out that while the top 20 celebrities saw a five percent drop in value, Kohli was still able to see an increase, which was a positive sign.
COVID-19 chaos
The big way in which COVID-19 impacted endorsement space, is simple. Any endorsement deal traditionally focuses on in-person offline appearances at launch events, shoots, fan engagements and shows. And these constitute about 80 percent of the earnings. Pandemic restrictions ensured that none of it was possible in 2020.
A celebrity’s deliverables remain restricted mostly to digital, especially during lockdown, which constitutes up to five percent of the total fee, the Celebrity Brand Valuation Study explained.
Road to recovery
Yet, Jain believes that the average endorsement fees of the top 20 personalities did not undergo any significant change last year. "Some celebrities did see a drop in their endorsement fees, but it was in the initial months of the pandemic. But if you look at latest endorsement deals, it is coming back to pre-COVID levels. The impact was more on adding new endorsement than endorsement fees," he averred.
He added that recovery has been good and for 2021, he expects valuation to go beyond pre-COVID levels.
In terms of categories, education-technology (ed-tech) firms contributed significantly to the celebrity endorsement pie.
The report points out that top 12 ed-tech companies spent more than USD 27 million on advertising in the first half of 2020 and are estimated to have spent another USD 40.5 million during the second half of the year. Several such companies signed on celebrities as brand ambassadors to attract consumers and increase brand awareness.
Emerging stars and sports shine
While brands partially shifted their focus from top celebrities, they put more emphasis on new age biggies.
In the initial six months of the COVID-19 impact, Jain said that emerging celebrities were getting more endorsements, in particular movie stars like Ayushmann Khurrana, who expanded his portfolio from 17 brands in 2019 to 27 brands last year.
No surprise then that Khurrana's brand value saw a significant increase from USD 40.3 million in 2019 to USD 48 million in 2020.
"Marketing budgets came down, but at the same time social media platforms became the place where endorsements were happening. So, all this worked in favour of new age celebrities as return on investment matters in the COVID-19 times. This trend will continue this year," predicted Jain.
Along with emerging stars, sports celebrities too caught the imagination of advertisers.
"Sporting celebrities did well thanks to the Indian Premier League (Season 13). Take Rohit Sharma's example who expanded his portfolio from 15 brands in 2019 to 24 brands in 2020," he noted.
Jain said that online gaming as a business vertical in the overall sports industry, picked up in 2020. "They wanted instant recognition and acceptance. So, they got on board sports celebrities," he said.
Indian fantasy sports platforms like Dream11 had signed Rohit Sharma and My11Circle roped in Sourav Ganguly as brand ambassadors last year.
It's all about followers
Another noticeable aspect in the celebrity endorsement space in 2020 was the increased focus on social media.
As brands are aggressively leveraging social media platforms, celebrities themselves are putting more emphasis on social media networks, along with their followers.
In 2020, Kareena Kapoor Khan joined Instagram to connect with her fans as well as advertisers. The actress, within 42 weeks of her joining the social networking platform, registered 5.5 million followers.
Jain said that "even established celebrities became more active on social media last year. Top stars are realizing that they need to continuously reinvent." The power of the social media is spreading its tentacles in all directions.
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