 "Shooting the messenger")
A few years ago, when global beverage giant Coke found itself in the middle of a controversy alleging the use of pesticide in its products in India, it turned to actor Aamir Khan to clean up its image.
Similarly, Cadbury (now under Mondelez) brought superstar Amitabh Bachchan to vouch for its brand after some Dairy Milk bars were found infested with maggots.
All that could change as a new set of rules come in to play, holding ambassadors responsible for the brands they lend their name to. It could also push endorsers to become more selective about the brands they choose and hike their fees to ensure exclusivity.
The Group of Ministers (GoM) headed by Finance Minister Arun Jaitley, declared that celebrities appearing in misleading ads would be fined Rs 10 lakh for a first offence. Make the same mistake twice, the penalty shoots up to Rs 50 lakh and comes with a ban for three years.
The new rules will have a big impact on celebrity-brand relationships and it is not just a handful of movie stars that will be impacted. Sportspersons, chefs, authors and musicians, all part of the burgeoning endorsement industry will all come under the scanner. A report by global valuations agency, Duff and Phelps says “celebrities are believed to feature in close to 50 per cent of all commercial ads aired in India, compared to only 20 per cent in the US. The top sectors using celebrity endorsers are personal care, food and beverages, automobiles, e-commerce and jewellery.
The committee that looked into the endorser-brand relationships in the country was set up after Food and Consumer Affairs Minister Ram Vilas Paswan’s ministry initiated the matter through the Consumer Protection Bill, 2015. It was a fallout of the controversy that Nestle found itself in over its instant noodles brand Maggi. Actors Madhuri Dixit, Amitabh Bachchan and Preity Zinta were targeted for endorsing the brand. The decision to fine celebrities has been met with mixed reactions. Jagdip Kapoor of Samsika feels that it’s a win-win situation. “Celebrities will now become more conscious, responsible and more importantly, discerning while taking on brand endorsement projects. It won’t be about how long a brand has been around, but about the pedigree and credibility of the brand.”
Kapoor adds that brands will be conscious, too, about making tall claims in their ads and the consumer will benefit, ultimately. The move may push up endorsement fees, though. Kapoor says that celebrities will become more selective and make up for the loss in volumes by charging higher fees.
Neerav Tomar of IoS, a sports marketing and celebrity management agency, however, feels there may not be an immediate impact. “I don’t think there will be a major impact on the number of brands endorsed or the rates. What will happen is that lawyers will have to get into the details to include indemnity and damage clauses in the contracts,” he explains.
Brand and celebrity managers agree that celebrities need to be protected, for instances, when circumstances are beyond their control. Actor Shah Rukh Khan had hinted as much in a television interview, a couple of months ago where he said that celebrities must be conscious of practices like employment of child labour, but cannot be held responsible for manufacturing flaws. Celebrities are not best equipped to understand the core business of the brand and, hence, can’t be held responsible.
A counter argument, however, can be made about the accountability of the celebrities towards brands. There is so far no rule that penalises a celebrity for a controversy that could harm the brand he or she is endorsing for example, Aamir Khan and Snapdeal. Will companies now add yet another clause to the contract?
