Amitabh Bachchan, Scarlett Johansson and the art of the celebrity endorsement

February 6, 2014 Leave a comment

Amitabh Bachchan, Scarlett Johansson and the art of the celebrity endorsement

February 3, 2014 5:57 pmby Andrew Hill

 

In the strange world of celebrityendorsements, it is usually the brand that dumps the celebrity – as happened, say, when Nike dropped cycling cheat Lance Armstrong in 2012 – rather than vice versa. So it stood out last week when Bollywood star Amitabh Bachchan revealed he stopped endorsing Pepsi some years ago, after a young girl asked him why he was advertising a drink her teacher said was “poisonous”.

“The Big B’s” declaration, during a talk with Indian business school students, coincided with a controversy that took the more predictable route. Actress Scarlett Johansson maintained her endorsement of SodaStream, the Israeli fizzy drinks company, and severed ties with Oxfam, the charity for which she had been a long-standing (and, people in the NGO world tell me, interested and involved) goodwill ambassador.

But his wider comments shed light on the other side of such endorsements and how celebrities can limit the risk of cross-contamination.

Mr Bachchan told the business students that rather than using an intermediary to set up his many endorsements, he insists on meeting the client in person:

When I meet them, I make my own judgment of who they are. I look to see their economic statements, their audited books… I ask them why they want me, I look at the product.

In other words, like any business entering a deal with another business, he conducts his due diligence. Such research must be time-consuming and, as the Indian star’s Pepsi U-turn suggests, the decision is not always definitive. But it is increasingly essential.

Controversial endorsements can quickly backfire online (as Ms Johansson discovered when pro-Palestinian activists started to criticise her links with SodaStream because it operates in an Israeli settlement in the West Bank). The controversy can spread across borders via social media. That may, as a side-effect, put an end to the sort of cheesy commercials Hollywood actors used to record for brands outside the US (as gently lampooned in Lost in Translation, Ms Johansson’s breakthrough film). Any association that turns out to embarrass either party will last for ever online: Mr Bachchan may no longer back Pepsi, but plenty of his TV ads survive on YouTube.

Mr Bachchan’s endorsement of Pepsi is in the past. He was their brand ambassador between 2002 and 2005. In the meantime, PepsiCo has been progressively rebalancing the sugar content of its “fun for you” products, such as Pepsi, and changing the balance of its overall portfolio, pushing “good for you” products, such as lower-calorie beverages. The company has played down the implications of his latest remarks for its reputation, saying “Pepsi is loved by millions of Indian consumers”.

In fact, the dilemma the Bollywood star faced is itself more than a century old. Of the few celebrities who ended an endorsement (albeit an inadvertent one), Johannes Peter “Honus” Wagner stands out. The story goes that the shortstop for the Pittsburgh Pirates – one of the first five members of baseball’s Hall of Fame – insisted American Tobacco Company stop producing cigarette cards featuring his image. According to a 1912 report, he told the company “he did not care to have his picture in a package of cigarettes”. As a result of Wagner’s successful objection, the few mint-condition cards that still circulate with his image change hands at auction for more than $2m apiece. An odd twist – with a lesson for any modern celebrities who believe their association with a brand ends when they, or the brand owner, ends the contract.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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