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Embracing the Change: a Concise Report on India's Most Valuable Celebrity Brands 2016.Pdf EMBRACING THE CHANGE A Concise Report on India’s most valuable celebrity brands October 2016 Table of Contents A Concise Report Contents Page No. on India’s most valuable celebrity Preface: Embracing the Change 3 brands Summary: Celebrity Brand Values 4 Introduction: Celebrity Brand 5 Endorsements in India Understanding Endorsements: Overview of 7 Celebrity Brand Endorsements Understanding Endorsements: Current 9 Celebrity Brand Endorsements Recent Trends: Celebrity Endorsements in 11 Ecommerce Recent Trends: Co-Ownership Model of 12 Endorsement Recent Trends: Celebrity Brand Extensions 13 Methodology: Our Approach and 14 Methodology Conclusion 17 Duff & Phelps 2 PREFACE Embracing the Change Dear Readers, It gives me great pleasure to present the second edition of our concise report on India’s most valuable celebrity brands. The theme of this year’s report, “Embracing the Change”, recognizes the rise of women celebrity endorsers to the top of the brand value rankings. This is something that we predicted in our 2014 celebrity brand report. It has been an exciting year for Duff & Phelps in India. This report follows the release earlier this year of the third edition of our report on Brand Values in the Indian Premier League ("Playing with a Straight Bat"). The report was very well received by our Varun Gupta readers and the media. The Board of Control for Cricket in India (BCCI) even Managing Director acknowledged our valuation analysis in its Annual Report for the year 2015-16. Duff & Phelps India Following up on our last report on celebrity values, we now focus on some of the recent evolving trends in the celebrity endorsement space. Celebrities are increasingly becoming angel ambassadors for start-ups under a co-ownership model, whereby the celebrity co-owns a part of the business venture which he/she is promoting. Celebrities are also leveraging their brands by venturing into related business areas as well as extending their brands into unrelated businesses. In another recent trend, ecommerce / online companies flush with investor money have also started using celebrities in their endorsement strategies to gain traction and mind-share. We hope you find our analysis interesting and we look forward to your feedback. Yours sincerely, Varun Gupta Duff & Phelps 3 SUMMARY Celebrity Brand Values In our 2016 Celebrity Name Brand Brand Value Previous 1 celebrity brand Rank (USD Million) Rank value rankings, Shah Rukh Khan 1 $ 131.2 1 female Virat Kohli 2 $ 92.5 4 celebrities take Deepika Padukone 3 $86.1 7 two of the top Salman Khan 4 $ 58.3 6 five spots as Priyanka Chopra 5 $ 44.9 11 compared to none in the 2014 Ranbir Kapoor 6 $ 36.6 2 rankings. Ranveer Singh 7 $ 35.7 New Hrithik Roshan 8 $ 34.1 8 Mahendra Singh Dhoni 9 $ 31.1 3 Total value Amitabh Bachchan 10 $ 26.4 13 of the top Kareena Kapoor 11 $ 25.5 10 15 celebrity Anushka Sharma 12 $ 24.5 14 brands Akshay Kumar 13 $ 23.9 15 US$ 691 Alia Bhatt 14 $ 22.6 New million Katrina Kaif 15 $ 17.8 9 (1) Previous rank as determined in the first edition of this report titled Waiting for the Encore, published in 2014. Duff & Phelps 4 INTRODUCTION Celebrity Brand Endorsements in India Celebrity endorsement has become with talent and advertising agencies, Based on our pervasive in advertising and celebrities are believed to feature in close discussions with communications. In the 1980s, a number to 50%1 of all commercial ads aired in of brands like Vimal, Thums Up and India. This is relatively high compared to talent and Gwalior used star appeal in their the U.S. where only approximately 20%2 advertising advertising to gain traction among the of commercial advertisements feature diverse consumer base in India. Fast celebrities. The power of popular agencies, forward to 2016, and the new age personalities creates an emotional ecommerce and technology companies attachment with Indian consumers that celebrities are are using the same celebrity drives them to choose a particular brand believed to endorsement centered strategy in order endorsed by their favorite celebrity. to gain widespread market recognition. feature in close Over the last decade, the celebrity to 50%1 of all Although the means of communication endorsement space has evolved and advertising have become much significantly, not only as a result of new commercial ads broader with the advent of social media mediums of advertising (Internet, digital and smartphones, consumer-focused and social media), but also because aired in India, companies continue to align themselves “celebritydom” is now not limited to just compared to only with powerful celebrity brands. Bollywood stars and cricketers. The 2 Corporates are also demanding Indian Premier League, Indian Super 20% in the increasing involvement from celebrities League, International Premier Tennis United States. and actively engaging with end League, Pro-Kabaddi League and Indian consumers via showroom events, store Badminton League have given us several launches and social media interaction. new sports stars in addition to our These celebrity endorsements expedite Olympic, and Asian and Commonwealth brand recall which influences customer Games medal winners. Indian television behaviour and purchasing. also has several rising stars who are slowly but surely finding their way into In the western countries, celebrity mainstream cinema and serving as endorsements have limited impact on brand ambassadors. consumers’ purchase decisions. However, in India, the scenario is fairly different as celebrities are almost idolized here, resulting in effective celebrity endorsements. Based on our discussions (1) Why celebrities in India have runaway success with brand endorsements, by The Financial Express (2) The Economic Value of Celebrity Endorsements, by Anita Elberse and Jeroen Verleun, by The Journal of Advertising Research Duff & Phelps 5 INTRODUCTION Advertising Industry Size (INR in Billion) 176 189 181 163 155 139 150 136 116 125 44 60 15 18 12 22 18 13 30 19 15 22 17 24 20 2011 2012 2013 2014 2015 Source: FICCI Report on the Media and Entertainment Sector 2016 Print TV Digital Advertising OOH Radio According to the 2016 Federation of commitment towards the endorsed In a growing Indian Chambers of Commerce and brands and higher potential returns given trend, Indian Industry (FICCI) report on the Indian the increased risk. Media and Entertainment sector, Indian celebrities are ad spending in 2015 increased by 14.7% As forecasted in our 2014 report, Waiting now venturing to INR 475 billion over 2014. However, for the Encore, female endorsers have digital advertising increased by 38% in risen to the top of celebrity brand value into businesses the same period, a clear sign that rankings over the last two years. Overall, corporates and advertisers are shifting female celebrity brand values contributed where they can their focus from traditional to new approximately 32% of the total brand further leverage mediums that provide instantaneous value of the top 15 celebrities as access to an identified target market. compared to approximately 20% in 2014. their brand value India is now the second largest market, by donning the after the United States, for YouTube, On the regulatory front, in September Facebook, and many other social media 2016, the Ministry of Consumer Affairs role of “Angel platforms. and Law approved changes in the Consumer Protection Act to provide for a Ambassadors” for Further, celebrities are no longer just jail term of up to five years, apart from a young using brand endorsements as something penalty of INR 5 million, for false and to bridge an income gap between films or misleading ads. Through this initiative, companies. sports. A significant proportion of a the government is aiming to curtail celebrity’s annual income is generated misleading advertisements and ensure through brand endorsements. more accountability on celebrity endorsements. Making brand Celebrities and their agents are market ambassadors more accountable has savvy businesspeople. Celebrities take been in the spotlight since the alleged time to understand the endorsed products presence of monosodium glutamate and and know what value the products bring, excess lead in Maggi noodles, which especially for less popular brands. were endorsed by movie actors such as International luxury brands, such as Amitabh Bachchan, Madhuri Dixit and Rado, Tissot or Louis Vuitton, continue to Preity Zinta. be more attractive to celebrities, while celebrities will avoid brands that may Given the changes in the market and have a negative image. regulations, this report aims to answer a few simple questions. In a growing trend, celebrities are • Who is the most valuable celebrity extending their personal brands beyond brand in India? traditional television and print advertising. • How has the brand value of top Indian celebrities are now venturing into celebrities evolved over the last 2 businesses where they can further years? leverage their brand value and marketing • Who are the emerging stars in the presence. These celebrities are donning endorsement space? the role of “Angel Ambassadors” for The answers presented in this survey young companies by becoming brand report form a groundbreaking analysis. ambassadors in exchange for an equity stake in the company. For these We hope you enjoy our analysis and we celebrities, it also means a deeper look forward to your feedback. Duff & Phelps 6 UNDERSTANDING ENDORSEMENTS Overview of Celebrity Brand Endorsements Endorsement Deal Structure may promote hair with a certain hair care Brands with brand and flawless skin with a different limited budget The first step in building a methodology to skin care brand. assess brand values is to understand may not sign a how celebrity endorsements are The second, but less popular form of celebrity as a structured. Based on our analysis, we engagement is a one-time appearance by understand that a celebrity may be a celebrity for a specified event. This may brand engaged by a corporate or an advertiser be in the form of a single advertisement in two key engagement models.
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