How has the celebrity endorsement game changed in India, in the wake of the pandemic, and going forward what could it look like? The Drum speaks to Aviral Jain, managing director of global advisory firm Duff & Phelps to find more
Across the globe, the celebrity endorsement industry has been one of the most fashionable, high-decibel, and lucrative categories, until it got hit by the pandemic. According to a KPMG report, “A Year Off Script,” the Indian M&E sector is expected to contract by 20% in FY21 to INR 1,402 bn, with segments like TV, print and film impacted the most.
This paradigm shift has also impacted the bustling celebrity endorsement space in a big way. As per the report, after reduced advertising and marketing budgets, the Indian celebrity endorsement space is likely to see a reduction of 15% to 20% in overall valuation.
The Drum speaks to Aviral Jain, managing director, Duff & Phelps a global advisory firm that has recently launched the sixth edition of its ‘Celebrity Brand Valuation Study 2020’ for the Indian market to get behind the intricate celebrity endorsement market. Jain calls out some of the major shifts being seen in this high-profile industry and also puts forth some key learnings that marketers can deploy to harness the celebrity-power better.
From a valuation perspective, 2020 was the first year where the total number of brand endorsements reduced by 3-4% for the top 20 celebrities in India. In the recent past, the number of endorsements had been growing at an annual growth rate of 15-16%.
“Covid-19 has been like a Black Swan event for the Indian entertainment industry, causing significant disruption across the spectrum. With production houses shut, no traditional content was being made in the initial quarters, forcing brands to look at alternate ways of promotion," he explains.
Further, there were instances where existing endorsement contracts were mutually extended without any additional consideration. Overall, this has led to a decline in the brand values of the top 20 celebrities in India by about 5%.
Here are some key shifts were seen in this high-profile industry.
The needle moves: from traditional media choices to social media cohort
The year 2020 marked many changes in the way media was consumed. Consumption patterns of the audience changed with soaring internet screen times as people added a significant number of hours on social media, often looking up to experts for their advice during this period of confusion and chaos, says Jain.
Brands and marketers took up this challenge well by getting the celebrities on-board on a different medium, “Celebrities moved away from their traditional approach and were seen frequently interacting with their fans through social media handles. Brands too experimented, and with the lower marketing budgets they engaged with the new and emerging celebrities more often.”
Many celebrities, OTT stars, and influencers together shared the spotlight for the digital-only campaigns, which is a new trend observed this year.
Increased influence of influencers
Even as the pandemic made a major dent in the overall marketing budgets for the companies, it also came with the realization that to stay visible and remain relevant, the ‘one size fits all’ campaign would no longer work.
“Even as certain A-list celebrities would continue to be roped in for the larger mass-reach, it is the rise and growth of the influencer marketing that would become a strong component in the overall marketing strategy by itself," he says.
Association with social media influencers not only ensures appropriate visibility to the product but also comes at a much lesser cost when compared to that of a typical A-list or mid-tier ‘celebrity’. Besides, influencer marketing can also be leveraged to amplify the reach and the number of touchpoints with the targeted audience, while the message becomes more authentic coming from an endorser who is considered as an expert in his or her area, adds Jain.
Thus, a cosmetics product would benefit through a tie-up with a beauty/ lifestyle blogger, while a gadget company would typically benefit from an association with a gamer/tech blogger.
As per a global report issued by Kroll, a division of Duff & Phelps, more than a fifth (22%) of marketers at FMCG companies spend $1.1-5m on influencer marketing. The survey found that nearly half (46%) of respondents expect to spend 31%-50% of their total marketing budget on influencers by 2021. This reflects an increase of more than 20% compared to the average advertising spend on influencers in 2018-2020, indicating the influence of a strong online presence.
Influencer marketing in the APAC region
Not just in India but influencer marketing is picking up pace in the APAC region too, with marketers looking for influencers whose brand image is best aligned with the product. The interesting trend, according to Jain, is that it may not matter whether the influencer is a celebrity or an industry specialist, or a blogger, what is going to be crucial is that they truly represent the message which the brand carries and creates the desired impact.