Celebrities account for 25 percent of Indian television commercials, with film stars hogging 85 percent of the celebrity ads. While nobody grudges the celebrities their enormous endorsement fees, one must spare a thought for the consumer for whom ads are meant in the ultimate analysis.
David Ogilvy had reservations about celebrity advertising in the latter half of his advertising career chiefly for the reason that consumers see through the trick—companies literally buying endorsements with fabulous payments—and the product being forgotten with the celebrity alone staying fresh in their minds. Indeed that is what happens when a star of yesteryears pops out of your TV screen ad nauseam. That godsend, remote, doesn’t help because even if you want to skip ads by surfing channels there is no respite from celebrity bombardment.
India has blazed a new trail with the Consumer Protection Act, 2019 coming into effect from 20 July 2020 tugging the celebrities by the scruff of their collars. They cannot afford to be blasé about the ad featuring them. Endorsers must ensure that their claims are not false or misleading. Upon being found guilty of being associated with misleading advertisements, endorsers can be directed to discontinue or modify their representations.
Monetary penalties ranging up to Rs 10 lakh can be slapped with repeat offences attracting a steeply higher penalty of Rs 50 lakh. The regulator, i.e. the Central Consumer Protection Authority (CCPA), also has the power to prohibit the endorser from making any future endorsements for up to one year. Such bar on endorsements may be extended up to three years for repeat violations of false or misleading advertisement(s).
So far so good but celebrities have become wiser. They refrain from making any statements. TVS Scooty for example features Amitabh Bachchan merely standing by the two-wheeler with a broad smile. We need meaningful laws that spare the viewers of celebrity fatigue and disenchantment. Like for example the number of brands a celebrity can simultaneously endorse. One can be a director of only a specified number of companies so that he doesn’t flit from meeting to meeting just for collecting the sitting fees and wear directorships on his sleeves. Likewise, a celebrity endorsing anything and everything invites a smirk.
And more importantly, if he or she can endorse a rival brand even after parting company with the first brand belonging to the same category of business. For example, Amitabh Bachchan endorsed ICICI Bank earlier. Now he endorses the new kid on the block IDFC First. One may say what is wrong so long as ICICI has no problems with the celebrity’s disloyalty. But it does send a worrying message to the customers of ICICI who might wonder if the superstar is telling them sotto voce to abandon ICICI and beckoning them to IDFC First. Such promiscuity, while being kosher legally, is morally reprehensible. Advertising Standards Council of India (ASCI) the watchdog should play a more proactive role in consumer interest.
While on the subject, the capital market watchdog SEBI has remained steadfast in its diktat of not permitting celebrity advertising for Initial Public Offers (IPO) despite the reality that children are more vulnerable to celebrity power though in their turn parents become vulnerable to their children’s pester power. But then companies in the run-up to their IPOs cleverly get around this difficulty by featuring the celebrities on the products/services they are offering. Once again ASCI and SEBI vigilance is called for.
The short point is there is a regulatory vacuum that needs to be filled in by legislation or by serious oversight by the watchdog ASCI. Brand owners too should introspect whether they are spending their money wisely. It would be instinctively wiser to feature satisfied customers and experts than the supposedly omniscient celebrities. There is nothing to prove that consumers of all ages eat out of celebrity hands. But consumers do take experts in the field seriously.
The ultimate in advertising arguably is comparative advertising—confidently throwing the gauntlet at the rival brands with comparative facts and figures on relevant parameters. It would cost a small fraction of the mind-boggling fees payable to celebrities but unless facts and figures are true, it could backfire or recoil if the rival done in by the ad sues for damages on account of disparagement. Defamation costs are infinitely more than celebrity fees!
—S. Murlidharan is a CA by qualification and writes on economic issues, fiscal and commercial laws. The views expressed in the article are his own.
(Edited by : Ajay Vaishnav)