From Leena Chitnis promoting soap brand Lux to Alia Bhat promoting Manyavar or even for that matter remember the ’90s campaign of Hyundai which featured actor Shah Rukh Khan. celebrities promoting brands may be a thing of the past, but in the present it matters, as it has turned into a serious career option, thereby impacting their brand valuation.This year Virat Kohli bagged the first position with a brand valuation worth $227.9 millio, as per the celebrity brand valuation 2023 report by Kroll. He beat actor Ranvir Singh, who slipped to the second position with a brand valuation worth $203.1 million, this year. But the question is what is the science behind celebrity endorsement? Is it only box-office numbers of performance on the pitch or there is more that meets the eye. “The quest for brand ambassadors begins not from the top but from the bottom. Brand look for success stories on the field, in the case of cricketers, last three matches, and in the case of actors the last three to five films released on the box-office and their performance.To that extend its extremely critical for a brand endorser to be success on their respective field,” Harish Bijoor, brand-strategy specialist and founder, Harish Bijoor Consults, told BrandWagon Online.
The matrix and the mechanism
To be sure, 2023 has seen its fair of changes in the valuation game. For instance, this year saw the return of Shah Rukh Khan or King Khan as he is popularly known to the third spot with a valuation of $120.7 millon. Khan perhaps is classic example of how the matrix works. The actor who had slipped to the 10th position, last year returned with a bang. According to the report, much of the credit goes to the box office collection of films Jawan and Pathaan of more than $100 million, each. Industry stakeholders believe while Khan’s stardom has never dimished, due to the up and down faced on the box office, his valuation has suffered. “Brands have a preset thinking that is if a star is rising, they latch onto their popularity and as on when their success diminishes, they are the first to abandon the ship. Typically it’s brands that bask in the popularity of stars. In very few cases, brands have been successful in making celebrities out of models. For instance, when Pepsi chose actor Aishwarya Rai or Shahid Kapoor even before they became famous. Would any brand have taken Neeraj Chopra had he not proven his mettle in his field?Stars are always stars. They may need brands for extra money or to fill time between shoots, but not as much as brands need the stars for their popularity and immense follower base,” Soumitra Karnik, independent creative consultant said. 
As per Kroll nutshell, the synergy between celebrity entrepreneurship, global star advocacy, and the resurgence of Bollywood is set to redefine the dynamics of the entertainment. Citing the example of actor Alia Bhat, whose brand Ed-a-Mamma’s 51% stake was picked up Reliance Industries Limited, to her becoming the face of Gucci as global brand ambassador immediately after her debut at the Met Gala in New York. are some of the factor which have worked in her favour. Another name is Mira Rajput actor Shahid Kapoor’s wife, who despite not being an actor has been able to manage to get enough brands to promote. “The contribution of female celebrities to the total brand value remained similar to previous years, which was around 20%-22% last year. This year, it has increased to 24%. A key driver of this growth is Kiara Advani, whose brand value jumped significantly by about 60%-70%. She moved from rank 16 last year to rank 12 this year,” Aviral Jain, managing director, Valuation Advisory Services, Kroll explained.
As per the data, this year actor Katrina Kaif rejoined the top 25, while Rashmika Mandanna moved up from rank 25 to rank 20, with about a 50% increase in brand value. Anushka Sharma and Kareena Kapoor have also seen their brand values rise by 20%-30% year on year. Even as the data projects that women celebrities have seen an increase in brand valuation, their contribution to the whole pie, still remains very small. Industry experts believe that is gender disparity is not only restricted to India. “Whether it is workplace or the celebrity world, women do get the short end of the stick when it comes to the compensation. When it comes to brands and categories, there are very few women only brands. For example beauty brands like Glow and Lovely (earlier known as Fair&Lovely),at a time was one of the few brands for women celebrities. But in many unisex categories which are neutral, for example cola, car or a furniture brand, there’s a tendency to choose male ambassadors over the female ones,”Anisha Motwani, Strategic Advisor, mentor and founder, Storm and Norm Ventures, said.
Industry expert pointed out that in terms of certain categories despite women being the decision marker, men are chosen. It is believed that a male brand ambassador is chosen purely on the basis of data and statistics. For example, Kohli would have much more followers than Bhatt who featured on the top five list by Kroll. But it is because Kohli has a mixed pool of young, old, men-women, international followers where Bhatt would have a certain kind of followers only. As per Motwani, it is another reason why brands choose male celebrities.
Bang for the buck!
Currently there are two-three models followed by celebrities when it comes earning the moolah. As per the Kroll report, the first and the more popular model is called the fixed fee and term engagement model. As per this model, a celebrity will be contracted for a specified term (usually one or two years) for a fixed-fee payment that may be made through an initial signing amount with the balance to be paid upon completion of specified activities. These agreements may also involve a royalty component, stated the report. These celebrities are called brand ambassadors owing to their long-term association with the endorsed product. The report further stated that recently, there have been certain deals where the intellectual property (IP) is partly or fully owned by the celebrity and the partner operates under a profit-sharing model. Usually, an annual endorsement contract includes the celebrity’s available two to four days (eight hours a day), during which time the advertiser may schedule an event, a photo ad shoot or a video ad shoot depending on the campaign. ““From a top 20-25 perspective, we have seen significant growth, with the total number of brands increasing by about 40%, from 424 in 2022 to 484 this year. For brands leveraging celebrities, the average fee for top 10 celebrities has increased six-seven percent year-on-year. In the last few years, the percentage increases have been somewhat erratic due to the Covid-19 impact, but we are now seeing a return to more organic growth,” Jain of Kroll, added.
Morever, the report stated that corporations, with the requisite budget, targeting the utilisation of a celebrity for multiple campaigns usually block the celebrity for a higher number of days in the contract to get a better cost-per-day deal. There is also an annual floor cost of association, which factors in a minimum number of days, irrespective of the actual utilisation of thecelebrity for the brand. Exclusivity provisions ensure that the celebrity does not promote a rival product brand for a certain period after termination of the contract. However, it is common for rival advertisers to buy out these exclusivity provisions. “Some brands use a combination of established stars and social media influencers for endorsements. A large brand may rope in Dhoni, Kohli, or SRK but will also engage social media influencers. It depends on the brand’s strategy. If they choose not to hire a big celebrity, there might be a good reason or just plain budget constraints. Many brands now opt for a combination of both stars and influencers. In fact, fixed fee and term engagement models apply to influencers too. Yearly contracts are standard, with legal teams ensuring agreements are carefully drafted, leaving no room for ambiguity,” Karnik said.
The second and less popular form of engagement is a one-time appearance by a celebrity for a specified event, as per the report. This may be in the form of a single photo or video advertisement shoot or a single post on a social media platform or attendance at an event. A celebrity may also be cast as acting talent for a specified advertisement. Such engagements are charged by the day or by the post (in case of a purely digital campaign), with the rates being
significantly different for annual contracts versus one-time endorsements. Apart from the regular fee payments, celebrity endorsement contracts may also include an in-kind payment, the report pointed out. The product being endorsed is supplied to the celebrity for free for a specific term. This is particularly prominent in the case of highend luxury brands. Often celebrities who endorse fashion brands are spotted wearing them to enhance the appeal of the product, as per the Kroll report. “Payments in kind deals are private arrangements between the organisation and the celebrity . If the celebrity is available and open for these deals, then it’s a win-win situation. Whether it is driving luxury cars or owning jewelry or wearing clothes from a particular brand, celebrities will be able to influence so many people not because of advertising, but for the ownership as well,” Motwani said.
In the last one or two years from actors to cricketers everyone has launched their very own brand. For example, actor Hrithik Roshan launched HRX a fitness and lifestyle brand in 2013. In 2016, Myntra, the e-commerce platform owned by Flipkart acquired 51% stake in the brand.
The company generated a revenue of Rs 1,000 crore in FY2023. Similarly, Virat Kohli rolled out one8. Launched in 2017, the brand offers a range of products including athleisure, restaurants,
fragrances and footwear. Another actor is Katrina Kaif with her Kay Beauty brand launched in partnership with Nykaa launched in 2019. “The Indian startup scene is buzzing, and now celebrities are jumping in, trading the limelight for the boardroom. This move isn’t just about expanding their portfolios; it’s about leveraging their star power to build successful businesses.
Interestingly, launching these ventures doesn’t hurt their brand value. In fact, it often boosts it. Aligning their ventures with their personal brand makes the transition smooth and authentic, enhancing their overall appeal and credibility in the market,” Vineet Bajpai, founder and CEO, Magnon Group and founder, Talentrack.
With social media now playing a greater role when it comes to tracking these celebrities, it is to be season whether influencers will play catch up anytime soon.
