Endorsers work harder to earn their super fees

Endorsers work harder to earn their super fees
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First Published: Tue, Mar 10 2009. 10 31 PM IST

Star power: As a slowdown forces companies to review ad budgets, marketers are asking celebrity endorsers to do more than just appear in ad frames or pose next to the product to validate their hefty e
Star power: As a slowdown forces companies to review ad budgets, marketers are asking celebrity endorsers to do more than just appear in ad frames or pose next to the product to validate their hefty e
Updated: Tue, Mar 10 2009. 10 31 PM IST
Mumbai: Unusually for a Bollywood actor, Priyanka Chopra left god, her parents and fans out of the thank you speech she delivered after accepting her award that night. The award wasn’t for a movie role, though; Chopra was being feted as “best brand ambassador-female” at the NDTV Profit Car and Bike Awards 2009.
“I feel great receiving the award… This award means a lot to me as the brand (Hero Honda Motors Ltd’s scooter brand Pleasure) is youthful, zesty and vivacious, which describe my personality too and it is a perfect brand fit,” Chopra said.
Star power: As a slowdown forces companies to review ad budgets, marketers are asking celebrity endorsers to do more than just appear in ad frames or pose next to the product to validate their hefty endorsement fees.
That marketing pitch, delivered on 20 February, would have cost an advertiser anywhere between Rs30-40 lakh. This one, however, came for free—a rare occurrence in the high-fee world of endorsement branding.
As an economic downturn forces companies to review their advertising budgets, marketers are asking celebrity endorsers to do more than just appear in ad frames or pose next to the product to validate their hefty endorsement fees.
Advertisers are expecting their celebrity endorsers to bring more to the table, whether it’s attending industry events such as an awards night or a trade show, renewing contracts at old rates, accepting deals that link business performance of the company to payouts, or squeezing more into each working day, say talent management companies.
A-list stars such as Shah Rukh Khan and Aamir Khan could charge anywhere between Rs8-10 crore for five-six working days per year as part of an endorsement deal.
Actor Saif Ali Khan, who was also present at the NDTV awards nite, won the “best brand ambassador-male” award for his endorsement of the Chevrolet, made by General Motors India. While his acceptance speech talked about his association with the brand—his mother used to own a Chevrolet Impala—he earned his stripes later that evening by refusing to be interviewed in front of a parked Mercedes.
He also declined an invitation to present the ‘Car of the Year’ award unless the organizers could confirm that a General Motors car was winning it, said his manager Anirban Das Blah, chief executive officer for Globosport India Pvt. Ltd. He adds that the star’s appearance that night was “free of cost”, and something that “was good for the brand” as his client was up against other star brand ambassadors in the auto sector, namely Shah Rukh Khan, Hrithik Roshan and Farhan Akhtar.
“Brands have become ruthless…they need to see value or they will just drop you,” says Blah of Globosport, explaining that brands needed to see commitment from their endorser during these times. “Even though the contract specifies six (working) days a year, you can’t say ‘that’s it’… it’s a two-way street if you want a long-term relationship with the brand.”
While this may not be the first time a celebrity is going that extra mile for a brand, marketers are looking for innovative ways to get maximum bang for their buck, experts say. When a brand spends money to get a celebrity, they get a bank of days which is usually used to shoot new ad campaigns and television commercials. So brands that may no longer have the budget to shoot or air new ad campaigns could look at using their celebrity brand ambassador in innovative ways that could increase consumer interaction with the brand.
“Innovation is the key to using talent beyond ad campaigns,” says Vinita Bangard, chief operating officer, Percept Talent Management, an arm of Percept Holdings Pvt Ltd, who maintains that innovations such as speaker engagements and public forums could help create a more loyal customer base. “Anything that can derive that extra pop (for the brand).”
Afsar Abbas Zaidi, director, Carving Dreams Entertainment Pvt Ltd, similarly says that brands are going back to the drawing board and thinking of new ways to communicate their relationship with the star. These could range from public relations and digital endeavours to on-ground activities.
For example, Saif Ali Khan’s sister Soha Ali Khan has been attending store openings for furniture brand Rosebys London. This allows the brand to use such events to impress its top clientele.
Kareena Kapoor and beau Saif Ali Khan, both ambassadors for Airtel, were seen attending the Airtel Half Marathon in Delhi early this year. They also shot a commercial for Airtel DTH, a direct-to-home television service, later that day. Their appearance at the marathon was paid for and fell under the number of days committed to the brand. However, they effectively completed two days of work in one, which is what the brand was billed for.
Recently, Nokia, which was the title sponsor at the 15th Annual Star Screen Awards, got its brand ambassador—Priyanka Chopra again—to give away an award at the ceremony.
Up against declines in their own industries, celebrities are more willing to re-negotiate deals or sit down with their brands to see how they can bring more value, during this time. “Celebrities realize… they see the market conditions and are willing to re-negotiate,” says Bangard, who maintains that a number of celebrities could be looking to reduce their commitment in terms of time, to bring down rates for advertisers.
So a star who may have committed six days to a brand annually may cut the time as well as price to make it more economically viable for the brand. Some talent managers are also allowing brands that cannot use all their inventory of time with the star to carry forward unused time for the next year.
Interestingly, some brands are using this opportunity to offer performance-linked deals and payouts, where the star stands to make money only if the company does. Here, the star may come on at a discounted rate with a promise of substantially higher–payouts, typically 15-20% higher than normal escalation, as and when the company does well, says Zaidi of Carving Dreams, which manages stars such as Hrithik Roshan and Bipasha Basu. Others look at it as an opportunity to beat down celebrity prices that may have risen by up to 400% in a very short period of time.
However, some maintain that celebrity endorsement fees are not likely to be adversely affected. “At a time when capital markets are down around 60% and the economy is in a slowdown, no industry is recession-proof. That said, the business of celebrity endorsements will be among the last hit. And there’s a sound business logic for this,” says Vivek Kamath of Matrix India Entertainment Consultants Pvt., who manages Kareena Kapoor’s endorsements.
He explains that celebrities help brands achieve magnified impact even on a reduced media budget. “Say a brand’s media budget is Rs100 and they are slashing it to Rs60. If they invest Rs2.50 in a celebrity, and use the celebrity intelligently, the media spend could end up looking like Rs80. That’s the reason celebrities continue to do well in a downturn. They are a scarcity product and a safe hedge in an environment of lower media spends.”
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First Published: Tue, Mar 10 2009. 10 31 PM IST