Brands expect celebrities to drop fees by 20-30%

Brands expect celebrities to drop fees by 20-30% the Indian Institute of Human Brands' (IIHB) Celebrity Compensation Report has revealed.

Of the clients that felt that the endorsement fee should reduce for the Top 10 celebrities like Virat Kohli, Akshay Kumar, Deepika, Ranveer, Ranbir, Alia and the like, 22% felt it should come down by 20-30%

Due to the Covid-19 pandemic there has been continuous pressure on businesses and the economy in the second financial quarter. As a result brands have taken a serious financial hit and the outlook in most categories continues to be gloomy. As such, many brand managers have been talking in hushed tones about “sharing the load” with not just agency partners, media houses, content agencies but also their celebrity endorsers.

To quantify the expectations of brand owners, the IIHB conducted a survey, reaching out to 110 clients to figure out what they expect in terms of celebrity compensation, going forward.

• 64% of clients said celebrity endorsement fee should come down
• 15% of clients felt the fees will not come down despite the inclement business conditions
• 22% had no opinion

Of the clients that felt that the endorsement fee should reduce, for Top 10 celebrities such as Virat Kohli, Akshay Kumar, Deepika, Ranveer, Ranbir, and Alia..

• 22% felt it should come down by 20-30%
• 15% felt it should reduce by 30-40%
• 12% felt it should reduce by 40-50%
• 11% felt that the downward revision should be 10-20%.
• 4% clients went as far as to say that celebrity endorsement fee should come down by 50% or more.

For the Top 10-20, second tier celebrities including MS Dhoni, Rohit Sharma, Hrithik Roshan, and Kangana Ranaut…

• 25% clients felt that the fees for such celebrities should come down by 20-30%
• 14% clients felt celebrity fees should reduce by 30-40% while 12% clients felt the reduction should be in the 40-50% range

Even for current contracts…

• 65% clients felt that the celebrity should reduce their fee by a significant amount
• 25% clients said a 30-40% reduction should be offered voluntarily by the brand ambassadors
• 19% clients said the reduction should be a minimum of 20-30%

On the same subject…

• 64% clients felt that the celebrities should offer to extend the tenure of current contracts
• 41% clients felt that the extension in tenure should be 3 months or more
• 21% clients felt that a minimum 3 months extension would be fair to both parties
• 36% clients wanted both a reduction in fees, and an extension in tenure of contracts

Despite wanting major concessions and reductions, the good news for celebrities is that the faith of clients in brand ambassadors has not really ebbed despite the downturn

• 54% clients said that even if the IPL does not happen this year, they would still want a cricket endorsee
• 51% clients said that even if India does not play internationally this year, they would still want a cricketer as an endorser
• 55% clients said they would continue to hire a celebrity ambassador despite the sluggish economy

Dr. Sandeep Goyal, Chief Mentor of IIHB said:

“The survey findings are interesting at two levels. They indicate continued trust and faith in celebrities by brand owners. The possibility of almost no cricket, and the diminishing of the aura of film stars without cinema releases, does not seem to be impacting clients in any negative way. However, given that the entire business and economy are in big trouble, brand owners expect celebrities to also take a hit in incomes, and also show visible concern by giving extensions in current contracts because of the hiatus of the past 100+ days that all businesses have suffered,” says

The IIHB survey also covered the perceived performance of celebrities during the lockdowns. The survey results will be released separately.

John Stephenson

john@cricketinvestor.co.uk

#Cricketnews #IIHB #Brandambassadors