Embarrassador: What should brands do when celeb endorsers court controversy?

Razor brand Gillette dropped brand ambassador Hardik Pandya like a hot potato once the controversy over his comments on the television show Koffee With Karan erupted.

But how exactly will such action ultimately help the brand?

Experts say celeb ambassadors are the need of the hour since the digital era mandates brands to not just sell products and services, but also create campaigns with the right tone that strike a chord with consumers and enhance credibility and awareness. As per data by Marketwatch, an announcement from a brand on signing a celebrity or an athlete can lift stock prices and sales by 4% on an average. But merely signing on an ambassador does not really help.

“Brands must begin with thorough research into the ambassadors they choose and agree on shared values. Leander Paes, for instance, is known for his longevity and consistency of performance, along with international achievements. Gul Panag is a great example of female empowerment and a credible voice for gender equality and justice. So an association with them for brands looking to promote similar values is a quick and effective way to get brand messages across,” says Dennis Taraporewala, managing director, Criesse Communications. 

Many categories, especially fast moving consumer goods (FMCG), benefit immensely from the reach provided by the popularity of celebs, adds Taraporewala.

Endorsements driven by celebrities have increased in India over the years. Data by ESP Properties shows the number of celeb-led endorsements rose from 650 in 2007 to 1, 660 in 2017.

But when the celeb ambassador shoot themselves in the foot, the brand in question has a tough call to make. “By breaking ties with Hardik Pandya, Gillette set an example that they will not excuse bad behaviour. Brands need to make their stand clear. For instance, when a photo of swimmer Michael Phelps smoking illicit drugs surfaced, Kellogg’s at once distanced itself from him, issuing a statement that his behaviour is inconsistent with the values of Kellogg’s,” says Arpan Jain, executive creative director, Geometry Encompass.

Jain says, at times, brands do not intend to spoil their relation with the celebs and hence, are unwilling to take a direct stand on the social misconduct. “Instead of dropping the celeb, they take a diplomatic stand by not renewing their contract after the controversy and by stating that they are looking for someone younger to connect better with the millennial audience.”

But retaining a celeb in the storm of controversy can negatively impact the brand’s image, consumer base and sales, point out experts.

A few years ago, Nike boldly retained golfer Tiger Woods as its ambassador when he fell from grace with his extramarital misdemeanours coming to the surface. The brand eventually suffered a loss of over $1.7 million in sales and the loyalty of over 1,05,000 customers. Apart from Nike, Tiger Woods at that time also endorsed brands like AT&T, Gatorade, Gillette, among others, who dropped him post the scandal. Despite this, the brands suffered huge losses, with shareholders of these brands collectively losing as much as $12 billion, as per research by the University of California, Davis.

“Thus, it helps to protect the brand by distancing it from the controversial ambassador,” say experts.

Says Taraporewala, “Many brands, especially luxury ones, consciously choose to not sign on celebrities as ambassadors, or choose alternatives such as a one-off appearance instead, while slowly building their own brand. Since there is always a certain amount of unpredictability for both the brand and the celebrity on future conduct by the other party, it is important to protect with strong contracts that allow both an exit, if needed.”

Most importantly, brands should look at what the communication roadmap is for them, and what are those specific additional voices that are needed to amplify brand value and ethos, says Varun Duggirala, content chief and co-founder, The Glitch. “The celebrity should not lay down the values per se, but should instead amplify them. For this, sensitising the ambassador on the brand values and helping them evolve their communication so that it complements the brand is crucial,” adds Duggirala.

In the long run, brands can look for a replacement to steer ahead their legacy, but this new celeb should command a stature and an image much higher than the previous one. “After Aamir Khan’s ‘intolerance’ statements, he was dropped from the Incredible India campaign and replaced by Amitabh Bachchan, who has a much wider fan following,” says Jain.

QUESTION OF END-OR-CEMENT

• 4% – Signing a celebrity or an athlete can lift stock prices and sales on average, says Marketwatch
   
• 1,660 – Endorsements by celebrities in India in 2017, as per ESP Properties