Earlier, brands with a negative perception were often faced with resistance and were charged high fees by celebrities. But, it looks like now celebrities will opt out of such deals.
It looks like celebrities will now have to be more careful than ever before taking up endorsement deals.
Under the new Consumer Protection Bill, celebrities can be both fined and jailed for endorsing misleading ads.
According to the Bill, celebrity endorsers can be fined up to Rs 10 lakh while repeat offenders could be penalised up to Rs 50 lakh. The celebrities could also be banned for a year and repeat offenders could be banned for three years.
In such a scenario, film trade analyst Atul Mohan thinks that celebrities will think twice before taking up endorsements.
N Chandramouli, CEO, TRA Research believes, “The Bill will impact the celebrities, making them more careful and cautious than before. You might even see fewer celebrity endorsements.”
Will fewer endorsement deals mean lesser brand value for celebrities?
Chandramouli explained that “such a thing (Consumer Protection Bill) will only increase the brand value”.
“Brand value is dependent on the performance and not the number. In fact, if you go for a fewer number of brands you get the exclusivity of a premium brand. Mass is not a good thing in endorsement,” he explained further.
With celebs getting more choosy, it could also mean them asking for a premium endorsement fee. After all, the risk is more and celebrities have been blamed in the past for advertisements considered misleading by consumers.
What change will the Consumer Protection Bill bring in the endorsement space?
Chandramouli said that there will be a new set of people, who will come in to do the scrutiny and ensure that any kind of risk is averted before celebrities enter such deals.
“The risk is huge for the celebs so this move will also protect them in a certain way,” he added.
He further said, “Endorsement space will go under scrutiny. Brands will become extremely cautious. There may be an indemnity, which brands would have to give to the celebrities, saying that they will have to bear all the cost if a case comes to the table.”
Brands have always tried to communicate with people through celebrities, especially in India.
A Duff and Phelps report says that celebrity endorsement has been a key aspect of Indian marketing. The proof of this is that close to 50 percent of endorsements in India feature celebrities as compared to around 20 percent in the U.S.
Reportedly, the number of celebrity-led endorsements increased from 650 ads in 2007 to 1660 ads in 2017.
Top categories that rely mostly on celebrities for endorsements include personal care/ hygiene, food and beverages, e-commerce, auto, real estate, and smartphone segments.
The 2018 Celebrity Brand Valuation report by Duff & Phelps pointed out that celebrity brand value of the top 15 endorsers in India grew by 13 percent from $691 million in 2017 to $782.2 million in 2018.
This highlights the increased confidence placed by product brands in celebrity endorsers.
Earlier, brands with a negative perception were often faced with resistance and were charged high fees by celebrities. But, it looks like now celebrities will opt out of such deals.“You will actually see weeding out of brands which are not prolific, not transparent,” added Chandramouli.The Great Diwali Discount!
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