THE CASE FOR RESPONSIBLE ENDORSEMENT

BY IMPACT Staff

As Maggi controversy invites unprecedented court order bringing to book celebs who endorse the brand, is it time for industry and consumers to come together and demand more responsibility from brand ambassadors? 
 

By ALIEFYA VAHANVATI

With inputs from SIMRAN SABHERWAL & ANURADHA VARANASI

The past week has seen the noodle muddle get further twisted as more and more States across the country sent samples of Nestle’s Maggi and other noodle brands to the labs. A controversy surrounding alleged high levels of lead in some packets of Maggi has hogged the headlines and several high-profile Bollywood celebs - Amitabh Bachchan, Madhuri Dixit and Preity Zinta – have come under fire for endorsing the brand over the years.
 

Celebrity endorsements are a time-honoured marketing tool. Marketers believe that borrowing some of a celebrity’s star power creates awareness and interest in a given product. Apparently, the strategy works: a 2011 study published in the Journal of Advertising that looked at athletes’ support for brands found that such endorsements produced a 4% growth in revenue (about $10 million a year in added sales of the branded products), and a 0.25% rise in stock returns.

In February last year, the Central Consumer Protection Council (CPCC) unanimously proposed laws to hold celebrities endorsing products liable for misleading advertisements. It reasoned that celebrities had considerable influence over consumer choice, and that by accepting money from a corporate for endorsements, they become an extension of that brand’s or company’s marketing team and therefore, there must be some form of liability for the endorsements being made. The proposed amendments to the Consumer Protection Act, currently with the inter-ministerial committee and due to be introduced in the next parliamentary session, have specific provisions to hold celebrities liable for misleading advertisements.

CCPC’s decision evokes mixed reaction even today - while some feel that it is a good idea to hold actors responsible in case of false claims made on products which they endorse, there are people who think that this rule, if implemented, will embroil actors in vexatious legal suits.

An endorsement contract is when a well-recognized public figure ‘endorses’, i.e., supports or approves of a particular product or service. Consumers are lured in by the fact that the celebrities who endorse the products have credibility and exert influence over a wide section of the population. Endorsement by celebrities can be for non-commercial activities as well - for example, the widely successful anti-polio campaign of the Indian Government which had Bachchan urging parents to get their children vaccinated.

Celebrity endorsements are hugely successful for advertisers in India - 50% of Indian ads are celebrity endorsements according to a WARC 2010 study. One only has to consider the influence that actors wield over their fans, and it is very often the case that a consumer’s preference for a particular product is consciously or unconsciously ‘nudged’ by the actor who endorses it. For example, the reason why a teenager buys Pepsi and not Coca Cola may have little do with the taste of the two beverages and may be because Ranbir Kapoor is Pepsi’s brand ambassador.

Does your brand need a celebrity endorser?

The short answer is, yes. For the long answer, even in this era of social media, one has only to look at the numbers to conclude that celebrities have more influence than brands. On Twitter, for instance, Amitabh Bachchan has close to 15 million followers, and Shah Rukh Khan, who was at 11 million followers on Jan 21, took just nine weeks to get another million followers by March end this year. International singing sensation Justin Bieber has 34.5 million followers, and Oprah Winfrey has 16.6 million. Reality TV stars also have impressive numbers: Kim Kardashian has 17.3 million followers! But brands — even popular ones that try to project a hip image — tend to have far fewer followers. Samsung Mobile has nearly 10.7 million followers and Starbucks has just over 8 million Twitter followers.

Hence advertisers are increasingly leveraging social networking and celebrities to attract consumers. Ultimately, celebrity endorsement is always worth investing in if you have the right person. It's an expensive but easy option for companies.

The benefits of celebrity endorsement include:

·         The opportunity to create new markets and/or tap into an activation base of fans.

·         The ability to spark sales by enticing consumers to learn more about the brand.

·         The means to promote a unique, relevant and sustainable brand attribute that might be hard to attain otherwise.

·         The option to build reciprocity into the partnership by supporting the celebrity endorser's brand.

·         The grounds for innovating the product/service offering.

·         Challenge to a pre-conceived notion.

Should responsible endorsement finally take centre-stage in India?

Today, after the Maggi debacle, the question hovering over every celebrity-brand contract is ‘to endorse or not to endorse?’And as Preity Zinta eloquently asks on Twitter on June 3, “Reading the news about me being sued for doing the Maggie (sic) commercial over 12 years ago? 12 years ago? How does that happen?” Amitabh Bachchan too reportedly clarified that he had stopped endorsing Maggi nearly two years ago.
 

Legal experts also hold the view that actors should not be held responsible. By putting the spotlight on the celebrity, the focus shifts from the company which should be held liable for the product, not the actor who is just mouthing lines. Even if a celebrity is liable in court,  there are clauses in the contracts signed between brands and celebrities that do not make them accountable if the product is found unsafe. In such cases, companies are bound to protect the endorser in all cases including any financial liability that ensues. But, if the court were to take stringent action, such as imprisonment, then there is no exemption from liability for damages.
 

For celebrity managers, the bigger concern is that if Madhuri Dixit, Amitabh Bachchan and Preity Zinta are indeed found liable for action, the contours of endorsement contracts are likely to change, bringing in more due diligence as well as clauses to protect celebrities.  While celebrity managers ensure proper due diligence is done, especially if the products are new, the truth of the matter is that 80% of endorsement deals signed by celebrities are for established brands for products that are already in the market. In this scenario, the question that needs to asked is – shouldn’t government officials whose duty it is to ensure that safety norms be met also be pulled up? How could these government officials allow products to be sold in the market if these products are indeed not fit for consumption?

Digital and marketing advisor, Ashok Lalla, too believes that to hold celebrities responsible for product shortcomings is unreasonable. “Brand ambassadors should not be held responsible for what goes into brand communication. For example, with regard to the present Maggi issue, the brand ambassador can say show me the lead safety levels certification and all may be okay with that. But tomorrow morning, someone else can find that instead of 77% wholewheat atta, Maggi only contains 75% wholewheat atta. What then? Should Madhuri then go back and demand certification for atta? And do you expect Shah Rukh Khan who endorses Santro to understand ABS braking technology before he signs the contract? Even media agencies in their contract specify that ‘we place advertising in the media but we are not responsible for what is said in those advertisements.’ It’s Maggi’s digital agency, Maggi’s creative agency, which should be held responsible. Madhuri is merely playing out the script given to her by the creative agency. Her personal beliefs or stance on the matter is not what she is paid for. The liability is clearly on the brand and the company, not on the face of the product.” If trusted brands allegedly default on food safety standards, why should it become the problem of the celebrity brand endorser? And that is where the question of responsibility comes in.

If only a month ago, an ad by Kalyan Jewellers showcasing Aishwarya Rai Bachchan resplendent in timeless antiques, complete with a dark, malnourished "slave boy" holding up an umbrella for her, was labelled ‘racist’ and insensitive and withdrawn, why then should fairness cream ads by A-listers such as Shah Rukh Khan, Salman Khan, Saif Ali Khan, Hrithik Roshan as well as others like John Abraham, Arjun Rampal, Shahid Kapoor, etc., not get the same treatment?
 

And although alcohol and tobacco advertising – direct and indirect – is banned in India, film stars have no qualms about promoting alcohol and tobacco brands under the fig leaf of ‘surrogate advertising’.  The issue gets even murkier with regard to promotion of junk food - products high in salt, sugar and fat. There is no regulatory framework on advertising or celebrity endorsement. There is no legal tool whatsoever to prevent junk food marketing targeted at children. And like fairness cream, every processed food product - noodles, potato chops, sugary aerated drinks and candies are endorsed by celebrities. All these now come with a ‘healthy’ tag with insignificant amounts of ‘healthy’ ingredients to mask the largely unhealthy ones. Visuals of wholewheat and vegetables are cleverly used in commercials to give an impression that processed food is healthy, nay, even better than freshly cooked or homemade food. And celebrities have become willing allies of the junk food industry in this phony war.
 

Regardless of what legal turn the controversy takes, it may be wise for advertising firms to re-evaluate creative strategies that call for celebrities to make claims that lead to legal repercussions. And, maybe it’s also time that, on their part, Bollywood and sporting superstars put conscience on the table and demand more stringent background checks before signing endorsement contracts even if they are from legacy brands, Indian or international?

It’s Not The First Time

Indian Institute of Planning and Management (IIPM) - In 2013, five students who paid anywhere between Rs 4.50 lakh and Rs 11 lakh to join a course titled 'IIPM School of Business and Economy (ISBE)' blamed Bollywood biggie Shah Rukh Khan for their woes. The course turned out to be a correspondence one and unrecognized, to boot. Soon after the students filed a petition in the High Court, Shah Rukh Khan was strangely missing in the advertisements.

Anjaniputra Infrastructure Private Limited - An FIR was filed against Genelia D’Souza for allegedly making false promises through ads and brochures for a real estate company in 2012.

Home Trade scam of 2002 – This scam had three big names, Sachin Tendulkar, Hrithik Roshan and Shah Rukh Khan standing behind the company. Without creating a single product, the company swallowed up thousands of crores of investor money, and celebrity-endorsed brand building was a crucial part of their operation

The Other Side Of The Coin

If a celebrity can’t be held liable for a brand’s faults, what happens when a celebrity lets down the brand he or she is associated with?

In 2009, one of the most embarrassing infidelity scandals broke out in the media. Golf champion Tiger Woods admitted to his sexual addiction and enrolled himself in therapy. General Motors, Gatorade, Accenture and AT&T ended their sponsorships with Woods completely, as others suspended their campaigns with him. In 2013, ‘I am the bullet in the chamber’, Nike’s disturbingly prophetic campaign, was suspended after Oscar Pistorius, South African sprint runner, shot model Reeva Steenkamp, his girlfriend at the time, in his house.

Closer home, merely a month ago, when Salman Khan faced a probable jail term, almost all brands that the actor endorsed started looking for ways to limit or withdraw their association with him soon after the Bombay High Court sentenced him to five years in jail for 'culpable homicide' in a 2002 hit-and-run incident, say industry experts.
 

What Does the Law Say?
 

The Maggi controversy has brought to the limelight the debate on the extent of legal liability of celebrities who endorse food products, even as it exposes ambiguities in the Food Safety and Standards Act (FSSA), 2006. There is no specific word in the Act about the extent, or lack, of liability or duty of care of the brand ambassador, who signs on to promote the brand as its ‘face’ and takes on the role of a marketing representative. Sections 24 and 53 in the 2006 Act deals specifically with advertisements. While the Act states that “no advertisement shall be made of any food which is misleading or deceiving,” it does not explain whether the term “made” is only confined to commissioning the advertisement or its actual making.

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