Big deal? How will Bollywood drug scandal affect celebrity endorsement landscape

Industry observers say that the drug abuse allegations are most likely to impact the brand endorsement earnings and value of those named in it

e4m by Misbaah Mansuri
Published: Sep 25, 2020 8:37 AM  | 5 min read

As more names from the Bollywood surface in the drug abuse investigation, advertisers are now having discussions on the need to recalibrate and steer away from releasing ads with brand ambassadors whose names have appeared in the probe.

A leading advertising agency CEO shared that brands associating with the celebrities in question are rethinking the associations and figuring how to navigate this new minefield and offset the risks. Another source shared that a beverage major has decided to pull the plugs on brand campaigns featuring its brand ambassador who happens to be named in the probe. For the uninitiated, actors like Sara Ali Khan, Shraddha Kapoor, Rakul Preet, Deepika Padukone, among others have been named in the probe.
Industry observers state that the drug abuse allegations could devastate the celebrity landscape and are most likely to impact the brand endorsement kitty of those named it.

On the same lines, the Indian Institute of Human Brands (IIHB) recently conducted a telephonic research over the September 12-13, 2020 weekend reaching 487 respondents (M 251, F 236) across India to study reactions to the continued use of such celebrities for brand endorsement. The results were clear: near zero tolerance for the drug tainted.

Dr. Sandeep Goyal, Brand Expert and Chief Mentor, IIHB, acknowledged that the celebrity endorsements business is under a lot of stress as clients are jittery after the latest controversy that has surfaced. “The overhang of drugs is not a nice situation to be in as the ambassadors tend to be tainted by the allegations. Unfortunately, it is a business where the celebrity is guilty till proved innocent! And not the other way around. Social media is actually a double-edged sword. The same millions of followers that make the celebrity famous, are the ones who cause embarrassment when the news is negative,” he remarked. Dr. Goyal contended that brands would do well to adopt a wait-and-watch for a while till the dust settles on the case.

Another creative shares with us that contracts are already being made more “social controversy-proof”. Our source frames the new challenge in the celebrity endorsements game succinctly when he says, “There are several other Bollywood A-listers whose names might come out in the days to follow. What the recent controversy has done is made marketers question the need of celebrities in the game.”

Moreover, it is quite evident that the celebrity endorsement space, like other areas, is also going through a state of churn post Covid. The Alchemist Auntourage report cites a substantial 70 per cent decline in the celebrity appearance market in FY20 versus FY19, given the Covid-led restrictions on brand events, shoots and fan engagements. Manish Porwal, MD, Alchemist Marketing & Talent Solutions, said that while the celeb endorsement space was already experiencing deterioration, the drug allegations may lead to a 30-35 per cent dip in brand endorsement value of those named.

“These could lead to tough times for Bollywood stars. With such issues, top brands will become cautious and re-consider associations with them. Deals which were in the pipeline will be redrawn. In the short to mid-term, it will have an impact on the overall endorsement space and will accelerate the shift of brands towards niche stars, social media influencers and sports people,” he stated.

Industry watchers reveal that many brands now insist on a ‘moral clause’ which entitles the brands to terminate endorsement agreement, if, in the opinion of the brand, theh celebrity has committed any act or does anything which might tend to bring him into public disrepute, scandal or ridicule, or which might tend to reflect unfavourably on the brand. These clauses are broad and discretionary.

Prathap Suthan, Managing Partner and Chief Creative Officer (CCO) of Bang In The Middle, opines that brands may want to stay away from those who have been coloured by this new scandal. He adds, “There’s really nothing that can insulate a brand from a fallout that comes in sideways. A brand perhaps can do due diligence and protect them from possible issues that might crop up. But you quite cannot predict where the next landmine explodes. Celebs and such run-ins are commonplace across India and the world. And I think consumers have got accustomed to the idea of brand ambassadors getting embroiled in scandals, and are pretty liberal in their minds to the fact that brands and their products quite don’t get tainted. People are very much human, mistakes happen to the most haloed celebs, but life goes on.”
Several brands these days have now started working with big celebrities only on a project basis for Instagram or Facebook activation campaigns.
Brand expert Samit Sinha observed that adding to that the overall gloominess in the economy due to the Covid-19 pandemic, the chances are that the controversy could doubly impact many stars’ endorsements-related earnings, at least in the short to medium term.

“There is undoubtedly an epidemic of scandals afflicting the Mumbai film industry at present with allegations and counter allegations flying around. Almost no one seems to be above suspicion. This cannot be doing any favours to the prospects of lucrative brand endorsements of many Bollywood celebrities since, under the circumstances, it is quite natural for advertisers to approach film-stars with a degree of circumspection. Being under the scanner is a reality for celebrities, especially with the social media landscape, it should be seen as an occupational hazard and the price of fame,” he asserted.

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