The costs and liability of celebrities

It’s hard to believe, but every woman who has chosen to wear white to her wedding since the 1840s has, mostly unknowingly, taken a page from Queen Victoria’s style book. Her unique act 182 years ago created and sustained a global wedding apparel industry worth billions of dollars each year. Wouldn’t we, shouldn’t we, acknowledge and hold the former Empress of India accountable for this gigantic, enduring success?

Throughout recorded history, people have been entranced by the lives and lifestyles of those above them in the social hierarchy. They reasonably believe that adopting the personal habits or accoutrements of people they adore could bestow on them that celebrity’s indescribable charm. It is no wonder, then, that when large-scale product promotion was formalized as advertising in the 19th century, celebrity endorsements were among the earliest approaches to gain widespread acceptance.

Other tropes and conceits come and go in the world of advertising, but celebrity endorsements continue to be a reliable mainstay for brands in every imaginable category and geo-demographic segment. So it was in the suitability of things that the lucrative earnings celebrities make from commercial endorsements came with some commitments. Obligations above all to those consumers who are even more positively influenced by the messenger than by the message and would procure the endorsed product.

Both statutory and self-governing advertising regulation have directly addressed the numerous issues surrounding celebrity endorsements for several decades. The US Federal Trade Commission’s celebrity endorsement policy clarifies that “Endorsements must reflect the honest opinions, insights, beliefs, or experiences of the endorser.” Similarly, the UK Advertising Authority’s advice to celebrities clarifies that, among other things, “Recommendations must be genuine” and “Claims must be accurate”.

India on Friday announced new guidelines applicable to celebrity endorsers, continuing the rules set out in the Consumer Protection Act 2019. The new guidelines are certainly not breaking new ground. Celebrities are held directly accountable for performing “specific due diligence” before preaching about brands. And if they don’t, they face fines of up to €10 lakhs for a first offense and €50 lakhs and a simple prison sentence of up to five years for subsequent offences. Do these numbers sound like a lot to you? Even the 100th most valuable celebrity endorser is now probably asking for more than €1 crore per year to promote a brand. The least paid in the top 10 would still move north €5 crore every year.

Is this policy – making it a legal requirement for celebrities to do their homework before rushing to cash in on their popularity – fair and reasonable? In the immediate aftermath of World War II, Carl Hovland, a professor of psychology at Yale University, defined source credibility as “the positive qualities of a communicator that influence the recipient’s acceptance of a message.”

This definition has since played a crucial role in the development of “propaganda” models. To Hovland’s credit, his research insights have been used consciously or unconsciously (mainly the latter) by millions of brand communicators and have produced billions, or rather trillions, of dollars in consumer spending. Endorsements often generate much larger income than income directly attributable to a particular celebrity’s primary calling. Cricket stars in India began earning crores through endorsements a decade or two before their direct earnings from the sport were even close.

Advertisers pay nothing out of generosity. The return on marketing investments is closely monitored in every business. Big ticket endorsers are only able to maintain their commercial prices because their economic value to the brands is a very attractive multiple of what they are charging. In today’s era, when millions of fledgling influencers have in a sense democratized the previously exclusive enclaves, the task of ensuring consumers are not being misled by misleading claims and untrue representations is more urgent than ever.

Can a statutory regulator actually do this job: effectively and efficiently monitor closely and broadly what is happening in the world of celebrity (or influencer) endorsements?

The good news is it’s not alone. The Advertising Standards Council of India introduced its own celebrity guidelines a few years ago. This was logically followed by guidelines for the nouveau celebrities, also known as influencers. The council handles a number of complaints on these issues each month, reflecting the vivacity celebrities continue to display. Celebrities should stop complaining and start showing responsibility to the fans and followers who follow their role models unconditionally.

Paritosh Joshi is a media professional

The views expressed are personal