Why celebs should not be punished when brands go wrong – and vice versa
When personal fame is used to manufacture brand reputation, it is a two-way street and there are cases that show that both the celebrity and the brand can suffer if the other fails .analysis Updated: May 04, 2016 21:31 IST
You are familiar with that line: “Mutual funds are subject to market risks. Please read the offer documents carefully before investing.”
Now imagine your favourite cricketer or Bollywood actor sporting a T-shirt in an ad with the fine print: “Celebrity endorsements are subject to corporate fulfilment risks. Please read the product manual carefully before buying”
This might seem bizarre, but there might come a day in the not-so-distant future when brand ambassadors are blamed for what the people hired them for do. It is time to clarify what they really stand for so that celebrity endorsements do not become a theatre of the absurd.
Last month, ace cricketer Mahendra Singh Dhoni pulled out as brand ambassador for real estate builder Amrapali group after angry customers upset over delays in the handover of flats they had paid for hounded him on social media. It was a triumph for customer power, but what followed was bizarre.
The parliamentary panel on consumer affairs has proposed that if ads that show celebrities are found to be misleading, its brand ambassadors can be fined as much as Rs 50 lakh – or even be jailed for five years.
The logic does not wash for two principal reasons.
First, as those hiring brand ambassadors point out, this will only result in celebrities taking indemnity from such legal action by writing it into their contracts. This might result in ads with fine-print warnings that would save brand ambassadors from being drawn into unseemly controversies.
Secondly, it is important to know that when a product fails customers, it has a backlash effect on the brand ambassador, which may be punishment enough.
This needs some explanation. What happens when a product or brand is endorsed by a celebrity? It is usually a process by which the glamour, fame and goodwill of the celebrity is made to rub off on the brand in exchange for money. When that happens, there is a shared risk. In that sense, personal fame is used to manufacture brand reputation through a joint endeavour. This is a two-way street and there are cases that show that both the celebrity and the brand can suffer if the other fails.
More important, from the point of view of corporate liability, the celebrity is just a service provider and is not directly liable for the brand’s manufacturing faults.
Where then is the need for regulators or governments to step in?
When Tiger Woods was involved in a sex scandal, world’s leading were hit. One study showed shareholders of Nike, Gatorade and other sponsors who paid Tiger Woods lost at least $5 billion in the wake of his extramarital affairs.
When cycling legend Lance Armstrong was shamed in a doping scandal, Nike and Anheuser-Busch pulled his contracts, and moved to ensure some of the eggs that came towards his face did not smear their own reputation. As AdWeek noted, brands and celebrities can hurt each other.
When Cadbury’s brand was hit by worms being found in its chocolates in India, it leaned on the reputation of Amitabh Bachchan to seek rescue. However, he was at the receiving end a decade later when Maggi noodles faced food safety concerns. Bachchan even faced threats of arrest after a court directed police to register an FIR against Maggi maker Neslte and its brand ambassadors including Bachchan and Madhuri Dixit.
As it happens, we in India have had court cases being filed against celebrities, usually movie stars, because (as some argue) it is also a way for those who file cases to become celebrities themselves. Every major movie these days faces some case or protest before its release – and we can never figure out if it is a spanner in the works thrown by rivals or a stunt blessed by producers to gain some cheap publicity.
The fact is that the rise of social media, civil society activism and public interest litigation (PIL) in India has given rise to a welter of cottage industries that thrive on either making or breaking reputations. Celebrities could do with some insurance – not just from angry consumers but also from sundry do-gooders and interlocutors who try to get their own 15 minutes of fame.