Home >Industry >Advertising >Brand endorsement fees of celebrities may fall by up to 50%

After the masses—here comes the pay cut for celebs. Virat Kohli, Akshay Kumar, Deepika Padukone and co. are paid far too much for celebrity endorsements in the current climate, say firms polled in a survey.

As many as 64% of 110 marketers polled by the Indian Institute of Human Brands (IIHB) said they want to take a second look at the advertising strategies, including hefty celebrity endorsement fees, as the lockdown begins to pinch.

With consumer demand declining sharply, market uncertainty and the road to recovery looking long, 22% respondents said the endorsement fee of top 10 celebrities, including cricketer Virat Kohli and Bollywood stars Akshay Kumar, Deepika Padukone, Ranveer Singh and Alia Bhatt, should come down by 20-30%; another 15% felt it should be 30-40%; and 12% felt the cut should be no less than 40-50%.

According to industry estimates, Kohli is the most expensive celebrity, charging 5-5.5 crore a day to endorse a wide variety of brands such as Puma, Boost and Manyavar ethnic clothing. Alia Bhatt’s popularity is steadily increasing too—she charges 1-2 crore a day for promoting Frooti, Garnier, Vicco toothpaste and Lay’s among others. With gyms and shopping malls shut, and sporting events in a turmoil, consumer brands appear to be counting the pennies.

For the top 10-20 ‘second tier celebrities’ such as M.S. Dhoni, Rohit Sharma, Hrithik Roshan and Kangana Ranaut, 25% marketers felt that their fees should come down by 20-30%; 14% felt it should reduce by 30-40% and 12% marketers felt the reduction should be in the 40-50% range.

Even in the current contracts in force, 65% marketers felt that celebrities should reduce fees by a significant amount—a quarter of marketers wanted a 30-40% slash and that it should be offered by the brand ambassadors themselves.

Whether celebrities agree to a fee reduction remains to be seen, although ending a contract in the current economic climate isn’t seen as wise option for them.

“The most amicable solution would be to suspend the contract for the term of lockdown or simply extend it by another four to six months. The best way forward is to negotiate so that it serves both the parties," said a senior talent management executive on the condition of anonymity.

“Owing to unprecedented times that covid-19 has brought, some brands have approached us looking at an extension window or slight delay in fee payment along with contract extension by a few months," said Tuhin Mishra, managing director of Baseline Ventures.

“These requests are backed by genuine reasons and athletes understand the situation. It’s not rampant but some brands are facing challenges and we are working with them to negotiate the terms which serve both the parties," he noted.

Despite the crisis, marketers believe in the power of celebrity endorsements—54% said they would want a cricketer endorsee even if the IPL does not happen this year.

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