Industry suggests that celebrities should be more careful while signing endorsement contracts, while maintaining that it is not valid to hold the celebrity alone responsible for faulty products or ads
Raushni Bhagia | Mumbai | May 5, 2016
The discussions are ripe about the latest recommendation by the Parliamentary Committee on Consumer Affairs to hold brand endorsers accountable for products they endorse. Whether or not it is valid to hold the celebrity responsible for endorsing a brand which fails the quality standards is a question that has many layers of answers.
The recent cases in discussion are the Maggi controversy and the real estate company Amrapali. As for Maggi, when the product was pushed out of the market due to high levels of monosodium glutamate (MSG), many voiced their opinion on the credibility of endorsers. Maggi is a renowned brand with a presence of over two decades in the country, with endorsements by Amitabh Bachchan, Madhuri Dixit and Preity Zinta, amongst many others.
As for the real estate company which was endorsed by MS Dhoni, when the company was sensed to be controversial and not abiding by rules, the celebrity cricketer immediately disassociated himself from the brand. These and probably many such instances have prompted the government to look into the matter of endorsements.
As per the recommendation on the Consumer Protection Bill, 2015, the strict action against celebrities even call for a jail imprisonment, alongwith a hefty fee of Rs 10 lakh for first defaulted association and up to Rs 50 lakh for the third.
On an average, the celebrity endorsement business is upwards of Rs 5,500 crore, with the top male celebrities charging amounts of Rs 12 crore and top female counterparts asking for about Rs 7-9 crore.
The recommendation also suggests that this will give the Advertising Standards Council of India (ASCI) enough legal strength to crack down on misleading advertisements and, if need be, take strict action.
To understand the issue in-depth, BestMediaInfo asked industry experts to voice their opinion on whether they agree with the parliamentary panel recommendation to make celebrities accountable for misleading ads.
Anand Ramanathan, Director, Strategy & Operations Consulting, KPMG:
It is in good interest that the long-term custodians of brands, the celebrities, take ownership of the brand that they are endorsing. In any such association, the brand adds to the celebrity quotient, while the celebrity adds something to the brand too. In such a scenario, it is only better that the celebrity should be confident enough of such endorsements. He/she should believe in what the brand/ product stands for, if, at all they are open to endorsements. I think the law, if it gets finalised, is not in any disconnect with what is beneficial for the celebrity and the brand.
Benoy Roychowdhury, Executive Director, HT Media, & Chairman, Advertising Standards Council of India (ASCI):
At ASCI, we don’t really have a point of view on celebrities being held responsible or not. We are here to ensure that the advertising is claiming something that can be substantiated by the stakeholders. The responsibility of honest advertising lies largely with the advertisers and the brands (manufacturers). The ultimate aim is that the company should be able to prove and substantiate any advertising claim that it is making whether directly or through a celebrity. The other thing that ASCI looks at is that the advertisement doesn’t have any parts which are demeaning to any section of society, gender or community. It should also not be harmful for children.
We are happy to get more legal recognition. However, I would like to mention that ASCI decisions already have a 90+ percentage of compliance and we are already part of Cable and Television Act. More support through legislative action is always welcome since it will help us do our job more effectively.
Ashish Bhasin, Chairman and CEO, Dentsu Aegis Network South Asia, and Chairman Posterscope and psLIVE – Asia Pacific:
I feel the celebrities can't be held completely responsible for what goes wrong with the brand or the product. However, they can’t also be completely obsolete/ ignorant to the brands that they are endorsing. They have to take the decision with due diligence. It is largely the responsibility of the brand and the manufacturer. A celebrity should however be at least open to basic concerns like whether the product is legal and allowed to be sold in the market. Many celebrities do have their own sets of morals, like many don’t advertise for cold-drinks and some others don’t push for children’s products. Some others are strict about the condition that if they don’t use a product and are satisfied, they won’t endorse it. However, it is too harsh to hold the celebrity completely responsibility to the extent of heavy fines and imprisonment. It is largely for the government to regulate the faulty and substandard products, while the endorsers must ensure that the product has a licence to be advertised. As for ASCI, being a self-governance model, it is quite successful in maintaining a fair balance. More than legal, they have a moral authority which is complied by most of the stakeholders.
Sam Balsara, Chairman, Madison World:
I would agree only broadly with the Parliamentary Panel recommendations to the extent that celebrities should accept endorsement proposals with a certain amount of responsibility. Celebrities need to be particularly more cautious and careful when it comes to products from unknown or lesser known companies and especially when exaggerated claims about health, education and finance categories are made in the ad. Celebrities who lend their name and face to advertisements would be well advised to be familiar with The Magic Remedies Act which prevent such claims on baldness, sexual impotency, male organ / breast enlargements, and the likes.
ASCI also has a simple and easy to understand code and also has some guidelines for certain sensitive product categories in the area of food, education and finance. These are very simple, easy to understand documents and not take more than one hour to read and internalise. If the celebrity is busy and/or not inclined to read these documents, then he/she should ensure that his/her advisor in the matter has read these documents.
However, it is unfair to make the celebrity accountable when products and advertisements are from reputed, well established global or national companies of long standing and the subject under dispute is technical in nature related to the product’s ingredients and consequent claims that require sound understanding of science, chemistry and what not. For example, it would be grossly unfair to hold the celebrity of Maggi noodles responsible. ASCI code requires that any product that requires a statutory warning cannot use a celebrity.
We live in a world that is increasingly imposing accountability on everyone and according to me the impact of this on the celebrity volume will be marginal to nil. On the other hand if some suspicious claims are being touted by minor celebrities, who claim innocence and if such advertising stops, it would be good for everyone concerned and it would go a long way in improving the credibility of advertising in society. And everyone including consumers, advertisers and celebrities will gain. I also think that the celebrities will now be hopefully more cautious, as they should be and definitely ask question about claims the brand is making.
MG Parmeswaran, Founder, Brand-Building.com:
I think it is irrational to hold a celebrity responsible for a false claim. The owner of the brand name is fully responsible and a celebrity is at best collateral damage. In a similar vein, why not hold the publisher of the ad culpable, or the TV channel. ASCI has become a lot more active in the last three years and are moving with speed to address complaints. Even they cannot penalise a star or a model for a false claim.
The issue is a bit different. Government is quite right in pointing out that a film star or a sports star or a TV star is a role model and they need to set a good example for the next generation, in terms of how to behave, what to do. So here is a suggestion, why not ask all celebrities who model for products to contribute an equal amount of time for socially relevant causes. So you spend 50 days acting in underwear and deo ads, spend the same time in making ads on gender sensitivity, adult literacy, sanitation, female health and other such issues. Look at the wonderful film that has been done by Dia Mirza on Ganga!
Bharat Rajamani, Director & Solution Champion - Marketing & Advertising Risk Services, Ernst & Young:
It is not valid to hold the celebrity responsible for the quality standards of a product they endorse since a bad brand negatively affects the brand value of the celebrity as well. While the celebrity is paid for the endorsement, the brand also leverages on the brand value of the celebrity and accordingly approaches them for different product categories that match the brand value of the celebrity. While the celebrity cannot solely be held responsible for the quality of a brand, the celebrity should perform adequate diligence on any claims being made by the advertiser prior to signing up, example, experiencing the product or reviewing a certificate pronouncing the claim to be made is valid.
Claims (if any) made by advertisers need to be backed by evidence. Many media houses insist on such a certificate prior to airing advertisements which builds confidence in the advertiser’s brand as well as the media vehicle. ASCI must ensure that such a process is defined, guidelines circulated to media companies and then followed by them.