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Celeb hardsell

Question the clutter as much as you may, but the figures tell their own story about celebrity endorsements of brands. The recent endorsement tie-ups by MS Dhoni, John Abraham and leading actors such as Aamir Khan, riding on highly attractive deals, certainly make you sit up and take note.

business Updated: Aug 16, 2010 16:41 IST
Anita Sharan

Question the clutter as much as you may, but the figures tell their own story about celebrity endorsements of brands. The recent endorsement tie-ups by MS Dhoni, John Abraham and leading actors such as Aamir Khan, riding on highly attractive deals, certainly make you sit up and take note.

The fact that the celebrity endorsement pie is growing every year surely indicates that this route of brand communication is nowhere near saturation level. Darshana Bhalla, CEO, MATES, the celebrity management practice of Madison World, said: “Celebrity-brand association is a huge field and a lot remains to be achieved. We in India have not touched the tip of the iceberg, compared to Hollywood.”

While brand owners, talent management companies and celebrities either get amnesia or cite confidentiality clauses when asked about endorsement deal sizes in terms of money, officially announced figures and professional estimates still point to a lot of money.

The celebrity endorsement market is estimated broadly at Rs 830-850 crore per year though Rajnish Sahay, CEO, Percept Talent Management, cited a more conservative Rs 650 crore for advertising alone and an additional Rs 50-80 crore for brand appearances, events and the like. “The celebrity endorsement business is growing at around 25-30 per cent per year,” he added.

Dhoni’s three-year deal with the Rhiti Sports Management-Mindscape One combine for Rs 210 crore is the biggest ever in sports celebrity management in India. John Abraham’s three-year deal with Madison MATES for Rs 100 crore, the latter said, is the biggest Bollywood-agency deal in celebrity management. Aamir Khan recently signed a two-year deal with UAE telecom major Etisalat, reportedly for a whopping Rs 35 crore.

Top celebrities, as TAM AdEx data shows, endorse anywhere between 10 and 26 brands a year. Industry estimates and media reports suggest that a brand deal can range between Rs 2.5 crore and Rs 8 crore a year, in rarer cases going up to around Rs 15 crore.

On the large deals signed by Dhoni or John Abraham, some industry experts said they would surely include more than ads. Bhalla agreed: “It is about the commercial exploitation of a celebrity status. This could include avenues beyond advertising, such as licensing, merchandising, appearances and events.”

Most talent management companies don’t include Aamir Khan in their estimates since he signs select deals, meticulously evaluated. Tata Sky has used the actor in its advertising for two years.

Unresponsive about the fees being paid to Khan, Vikram Mehra, CMO, Tata Sky, said, “Khan personifies the brand values of trust, high quality entertainment, innovation and strive for perfection, which suits our brand. Response to our advertising has been overwhelming. H has a very strong consumer connect and viewers have closely associated him and Tata Sky, resulting in high recall and likeability.”

While agreeing that not all celebrity ad campaign are impactful, talent companies nonetheless point to a lot of brands reporting positive returns on investment (ROI) when they have used celebrities.

“In the clutter, being there at the top of the consideration set is important. If a celebrity is distinctive and a brand uses him/her well, the brand’s reminder hook becomes strong. Yes, using a celebrity can become the easiest fallback option as opposed to having to work very hard on a clutter-busting brand message. But if it works, it’s good, as too the chance of your brand registering with consumers faster,” said Mahesh Ranka, GM, Relay Worldwide India, Starcom Mediavest Group, which earlier handled the Dhoni-Aircell deal.

TAM AdEx data shows that 80 per cent-plus of celebrity ads are dominated by Bollywood actors. But talent management experts say sports beyond cricket, music, food and fashion will open up significantly, thanks to good media coverage of such fields.

Said Sahay: “From among our clients, boxer Vijender Singh will soon be seen in brand associations with Nike, Siyaram’s and Nestle Munch, while Sarod maestro Ustad Amjad Ali Khan and his sons Amaan and Ayaan will endorse an international watch brand.”

He also pointed to a growing trend of brands asking for regional celebrities (who are not as expensive as Bollywood/sports celebs), especially for markets such as south India and West Bengal, for more focused targeting.

Bhalla signed off with some crystal ball gazing: “Bang for the buck is increasingly based on impact. In the future, we could see products being created around celebrities — such as cosmetics around Jennifer Lopez in the US. In the UK, IMG Talent Management occupies an entire 12-storey building. There are other such multi-billion dollar talent management businesses in the developed markets, some even listed on stock exchanges. India too, will head in that direction — talent management can become an industry in its own right.”