Bubble bursts for celeb ambassadors

MUMBAI: If you think your annual increment is going to take a hit, you’re not alone. Giving you company are Messrs Shah Rukh Khan, Aamir Khan, MS Dhoni and others.

Like us, even the celebrity brand ambassador who rakes in crores annually expects increments. In most cases, it runs into crores too. But the party’s over, it seems.

The economic crisis facing Indian companies is forcing marketers to contemplate cutting advertising and branding costs. And the fees paid to celebrity brand ambassadors may take a dive.

Celebrity management consultants DNA spoke to said options being explored included renewing contracts without any hike, postponing shoots for ad campaigns or even a “correction” in the fee structure. The latter could even mean the celeb would be forced to bring down his ‘market price’ by 20-40%, they said.

These measures are likely to hit A-listers such as Shah Rukh Khan, Aamir Khan, Hrithik Roshan, Akshay Kumar, Mahendra Singh Dhoni, and Saif Ali Khan.
While the others charge above Rs3 crore per brand annually, Aamir and SRK charge upwards of Rs6 crore. Contract mandate the celebrities to devote a fixed number of days every year for brand related activities — either ad shoots, product launches or public appearances.

According to industry sources, Abhishek Bachchan, brand ambassador for Motorola, will not get paid more than Rs5 crore for his next assignment with Motorola in 2009. Akshay Kumar, who is reportedly getting Rs12 crore for his contract with Levi’s, has been asked to take a 25-30% cut, said an industry official.

Some companies are even thinking twice before renewing contracts with celebrities. Coca Cola, for example, has not renewed its endorsement contract with Aishwarya Rai, who is also their brand ambassador.

Industry officials said even Yuvraj Singh’s contract with a major hair care brand is under the scanner.

There are also brands like Fanta which want maximum bang for their buck by investing in the “right celebrity ambassador”. Fanta has replaced incumbent brand ambassador Rani Mukherji with Genelia D’Souza, who after the success of Jaane Tu Ya Jaane Na charges Rs1.25 crore, the same amount charged by her predecessor.

“With every new contract that is signed with the brand ambassador, there is a certain amount of inflation in his market price. If the star is doing very well professionally, then his market price could even double. But due to the recession, prices charged by the celebrities will not increase in new contracts,” says Lloyd Mathias, director marketing, South West Asia-mobile devices, Motorola India, adding that it won’t go down either because the situation is not that bad.

Anirban Das, VP, Globosport said, “In the last one or two years, the brand endorsement market had doubled in value. SRK, Aamir, Saif, Akshay commanded skyrocketing prices. Saif, who was charging about Rs 1.5 crore per endorsement on annual contracts, now charges Rs3.5 crore. But what will happen now is further hikes have been stalled.”

But companies are also sensing an opportunity here. It’s still a great time to sign in brand ambassadors, says Das. Shailendra Singh, joint MD, Percept Ltd which runs Percept Talent Management, agrees. “Ideally if I were to sign somebody new, I’d lock in my brand ambassadors for the next 2-3 years for the current market price, to avoid any hikes in the short term,” he says.