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Celebrity brand valuation report 2020 embracing the new normal

Duff & Phelps released the findings from the sixth edition of its ‘Celebrity Brand Valuation Study 2020’ today. The study provides a ranking of India’s most powerful celebrity brands based on brand values derived from their product endorsement portfolio and relative social media presence. The theme for the year is ‘Embracing the New Normal’.

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Celebrity brand valuation report 2020 embracing the new normal

  1. 1. Embracing the New Normal C E LE B R IT Y B R A N D VA LUATI O N R E P O R T 2 0 2 0
  2. 2. Celebrity Brand Valuation Study 2020 Contents 01 Foreword____________________________________________________________ 03 02 Celebrity Brand Values________________________________________________ 04 03 Celebrity Brand Ranking_______________________________________________ 05 04 Introduction__________________________________________________________ 06 Media and Entertainment Industry Segment Highlights Overview of Celebrity Endorsements Celebrity Endorsement Highlights 05 Key Trends in Celebrity Endorsement Space_____________________________ 16 Embracing the New Normal Rise of Sports Celebrities Education Technology (EdTech) and Celebrity Endorsers 06 Industry Speaks______________________________________________________ 29 07 Valuation Methodology________________________________________________ 34 08 Valuation Conclusion_________________________________________________ 38 Duff & Phelps 2
  3. 3. Celebrity Brand Valuation Study 2020 Dear Reader, It gives me great pleasure to present the sixth edition of our study on India’s most valuable celebrity brands. The theme of this year’s study is, “Embracing the New Normal,” which recognizes the impact of COVID-19 not only on our brand value rankings but on the entire celebrity endorsement space. Celebrity power continues to hold value in a country where movie and sports stars are widely followed and often seen as role models. This year, brands turned to social media and online platforms, thereby redefining the entire advertising mix. We witnessed several digital platforms paving a new path for celebrity collaborations. With stars from multiple verticals such as music, comedy, movies and sports, these platforms aim to connect brands with potential brand ambassadors in an authentic and personalized manner. This also led to a shift from established celebrities to up and coming and buzzworthy influencers across the advertising and media industry over the past year. Our 2019 report, “New is Gold,” recognized Virat Kohli’s reign at the top for the third year in a row, followed by Akshay Kumar and the power couple Deepika Padukone and Ranveer Singh. The trend continued this year, with Kohli, Kumar and Singh retaining the top three positions in our rankings and continuing to be the primary choice of product brands seeking to engage and attract consumers. While established celebrities continue to dominate our rankings, notable millennials continue to climb the ladder. The overall brand value of the top 20 celebrities in 2020 is estimated at USD 1 billion (bn), a decline of about 5% from last year. Meanwhile, it has been an exciting year for Duff & Phelps. We achieved carbon neutrality across all our 25 global offices and are now a CarbonNeutral® company, certified in accordance with The CarbonNeutral Protocol. Duff & Phelps expanded its Business Services division globally with the acquisition of Blackrock Expert Services Group, a London-headquartered disputes and expert advisory specialist firm of construction, technology, accounting and financial services professionals. Duff & Phelps also acquired Borrelli Walsh, a leading specialist restructuring, corporate recovery, insolvency and forensic accounting firm. The combination of Duff & Phelps and Borrelli Walsh strengthens the firm’s restructuring offerings for clients in Asia, the Caribbean and around the world. Last year, we released our insights on IPL brand valuation, titled “COVID-19 Impact on IPL Ecosystem Value.” The report was very well received by both our readers and the media. I would like to take this opportunity to thank all our readers and clients for their continued support. We hope you find our analysis interesting, and we look forward to your feedback. Yours sincerely, Varun Gupta Varun Gupta Managing Director and Asia Pacific Leader Valuation Advisory Services Duff & Phelps Foreword Duff & Phelps 3
  4. 4. Celebrity Brand Valuation Study 2020 Celebrity Brand Values 3. Photo Courtesy: BCCI Photo Courtesy: Dabboo Ratnani Photo Courtesy: Errikos Andreou 2. 1. Virat Kohli Virat Kohli consistently tops the charts for the fourth time in a row as India's most valued celebrity with a brand value of USD 237.7 mn. Akshay Kumar Akshay Kumar retains his second position from last year, with a brand value of USD 118.9 mn. Ranveer Singh Heartthrob Ranveer Singh takes up the third position with a brand value of USD 102.9 mn.
  5. 5. Celebrity Brand Valuation Study 2020 Celebrity Brand Ranking Celebrity 2020 Brand Rank Brand Value (USD mn) 2019 Brand Rank1 Virat Kohli 1 237.7 1 Akshay Kumar 2 118.9 2 Ranveer Singh 3 102.9 3 Shah Rukh Khan 4 51.1 5 Deepika Padukone 5 50.4 3 Alia Bhatt 6 48.0 7 Ayushmann Khurrana 6 48.0 10 Salman Khan 8 45.0 6 Amitabh Bachchan 9 44.2 8 Hrithik Roshan 10 39.4 11 Mahendra Singh Dhoni 11 36.3 9 Varun Dhawan 12 35.2 12 Anushka Sharma 13 26.7 18 Kareena Kapoor Khan 14 26.6 19 Tiger Shroff 15 26.3 17 Aamir Khan 16 26.2 16 Rohit Sharma 17 25.7 20 Ranbir Kapoor 18 25.2 14 Priyanka Chopra 19 15.9 13 Kartik Aaryan 20 14.9 New USD 1.0 bn 1 Previous rank as determined in the fifth edition of this report, titled “New is Gold,” published in February 2020 Duff Phelps 5
  6. 6. Celebrity Brand Valuation Study 2020 The COVID-19 pandemic has resulted in an economic slowdown, which in turn had a severe impact on the Indian media and entertainment (ME) industry. In FY20 (i.e., year ended 31 March 2020), the Indian ME sector reached a size of INR 1,751 bn, a growth rate of 7% over the past year, as compared to a 13% growth rate registered in the previous year. According to a KPMG report, “A Year Off Script,” the Indian ME sector is expected to contract by 20% in FY21 to INR 1,402 bn, with segments like TV, print and film impacted the most. The sector is expected to reach a market size of INR 1,866 bn by FY22 and a CAGR of 3.2% over FY20-22, owing primarily to the growth in the digital segment (now the third largest segment), ease in lockdown restrictions and the festive season in Q3 2020. With COVID-19 gripping the entire nation, the ME sector took a hit and witnessed significant slowdown in advertising spends post March 2020 as traditional media and outdoor entertainment formats were severely impacted by lockdown and travel restrictions. As per a report issued by Dentsu Aegis Network2 , FMCG spent the highest amount on advertisements across various channels, amounting to INR 201.8 bn or 29.5% of the total market share. The e-commerce industry made the second largest contribution of 10.1%, followed by the automotive industry (8.5%) and consumer durables (5.9%). Media Entertainment Industry TV 778 714 652 596 306 308 319 333 86 121 173 218 183 183 159 145 101 62 74 88 90 62 44 32 31 29 32 34 25 24 26 28 19 13 14 17 900 800 700 600 500 400 300 200 100 0 Print Digital Films Animation and VFX Gaming OOH Radio Music • FY 17 • FY 18 • FY 19 • FY 20 ME Industry - Market Size (INR bn) Source: KPMG “A Year Off Script: India’s Media and Entertainment Report 2020” FY: April 1 to March 31 of respective years Introduction 2 Dentsu Aegis Network India: “Digital Advertising in India 2020” Duff Phelps 6
  7. 7. Celebrity Brand Valuation Study 2020 While TV remains the largest segment in the advertising space, digital continues to be one of the fastest growing segments. During the fiscal year 2020, digital advertising marginally overtook print to be the second largest segment, as the latter continues to be negatively impacted by the shift toward digital, especially as a result of COVID-19.3 Television • Advertising revenues increased by 4.2% in FY20, reaching INR 262 bn, primarily driven by three major events in the given timeline: the Indian Premier League, the national general elections and the ICC Cricket World Cup 2019. These events increased TV viewership, leading to more ad content through this medium. While TV viewership saw a sharp growth in the lockdown, advertising spends saw a decline during this period as many industries advertising were adversely impacted. • With OTT on the rise among audiences and the disruption this pandemic has brought to the outdoor shoots, the TV segment is expected to decline by 8.9%, from INR 778 bn in FY20 to INR 708 bn in FY21. Meanwhile, in FY22, TV is expected to recover as revenues are expected to grow at 8.6% from INR 708 bn to INR 769 bn, considering a potential shift in ad spends from print and out of home (OOH) segments to TV. Segment Highlights 3 KPMG India: “A Year Off Script: India’s Media and Entertainment Report 2020” Duff Phelps 7
  8. 8. Celebrity Brand Valuation Study 2020 • Digital continues to perform well, registering a growth rate of 26% in FY20, mainly attributable to the increase in subscription revenues of various OTT platforms, from INR 12 bn in FY19 to INR 19 bn in FY20, a growth rate of 47%. • Digital advertising revenues continued to increase at a strong rate of 24% in FY20, reaching INR 199 bn, mainly due to the growing popularity and ease of access of this segment. • Advertising revenues declined by 10.3% in FY20, reaching INR 198 bn, primarily due to a decline in circulation of English newspapers and magazines given the emergence of digital media, where the penetration of English-based content is the highest. • Overall the print segment suffered a decline of 8.3% in FY20 reaching INR 306 bn. Going forward in FY21, COVID-19 is expected to significantly impact the growth trajectory of this segment considering that since the national lockdown had been enforced in March 2020, many readers were skeptical of doorstep dailies in fear of contracting the virus which has led to an overall decline in circulation. Digital Print 8
  9. 9. Celebrity Brand Valuation Study 2020 The first step in building a methodology to assess celebrity brand value is to understand how celebrity endorsements are structured. Based on our analysis, we understand that a celebrity may be engaged by a corporation or an advertiser in two key engagement models—a fixed fee and term engagement model or a one-time engagement model. Fixed Fee and Term Engagement Model In the first and the more popular model, a celebrity will be contracted for a specified term (usually one or two years) for a fixed-fee payment that may be made through an initial signing amount with the balance to be paid upon completion of specified activities. These agreements may also involve a royalty component. These celebrities are referred to as “brand ambassadors” owing to their long-term association with the endorsed product. Recently, there have been certain deals where the intellectual property (IP) is partly or fully owned by the celebrity and the partner operates under a profit-sharing model. Usually, an annual endorsement contract includes the celebrity’s availability for two to four days (eight hours a day), during which time the advertiser may schedule an event, a photo ad shoot or a video ad shoot depending on the campaign. Brands, with the requisite budget, targeting the utilization of a celebrity for multiple campaigns usually block the celebrity for a higher number of days in the contract to get a better cost-per-day deal. There is also an annual floor “cost of association,” which factors in a minimum number of days, irrespective of actual utilization of the celebrity for the brand. Exclusivity provisions ensure that the celebrity does not promote a rival product brand for a certain period after termination of the contract. However, it is common for rival advertisers to buy out these exclusivity provisions. One-Time Engagement Model The second and less popular form of engagement is a one- time appearance by a celebrity for a specified event. This may be in the form of a single photo/video advertisement shoot or even an event attendance. A celebrity may also be cast as “acting talent” for a specified advertisement. Such engagements are charged by the day, with the rates being significantly different for annual contracts versus one-time endorsements. Other Elements of Engagement Apart from the regular fee payments, celebrity endorsement contracts may also include an “in-kind” payment. The product Overview of Celebrity Endorsements Duff Phelps 9
  10. 10. Celebrity Brand Valuation Study 2020 being endorsed is supplied to the celebrity for free for a specific term. This is particularly prominent in case of high-end luxury brands. Often celebrities who endorse fashion brands are spotted wearing them to enhance the appeal of the product. The contract may also have additional benefits, which may cover all expenses incurred by the celebrity during the advertisement’s production. For example, expenses related to first class airfare, hotel accommodations and luxury meals. The endorsement deals may also provide for insurance of the celebrity, such as commercial general liability insurance, which is issued to cover them against any injuries arising during the shoot. Alternatively, the terms may include an umbrella liability insurance, which protects the celebrity from certain personal liability situations that may arise because of the endorsement contract. Variation in Endorsement Fees Interestingly, we note that the rates charged by celebrities for an annual endorsement engagement significantly differ across product brands signed, even in the same year. This is mainly because certain products are more attractive to a celebrity, and their fees for endorsements will vary by their inclination to be associated with a certain product. Some celebrities may reduce their endorsement fees for a product brand, which helps a social cause. Endorsing for a social cause through campaigns initiated by the government or public/private entities increases their credibility and the likelihood of receiving future product brand endorsement offers. Hence, they are willing to work for little to no endorsement fees. The prestige of the product brand primarily dictates the deal value. There is an inverse relationship between the size/ appeal of the product brand and endorsement fees charged. Endorsing products dealing with personal care, consumer durables and apparel is often attached to the celebrity’s status symbol. Celebrities with a high stature often prefer to endorse a company that matches their own status. Endorsing a product, which can be hazardous to health such as carbonated and alcoholic beverages, cigarettes, etc. creates a negative impact on the celebrity’s image. Celebrities tend to charge a much higher endorsement fees for such products. Duff Phelps 10
  11. 11. Celebrity Brand Valuation Study 2020 One of the biggest changes during the lockdown is that celebrity brand engagements have become more digital- oriented now. An endorsement deal would traditionally focus more on in-person offline appearances at launch events, shoots, fan engagements and shows, which constitutes about 80% of the earnings. With that now gone, a celebrity’s deliverables remain restricted mostly to digital (especially during lockdown), which constitutes up to 5% of the total fee. The fact that advertising and marketing budgets have been reduced drastically in some cases reflects that the Indian celebrity’s endorsement space might see a reduction of 15% to 20%.4 In the current scenario, brands and celebrity endorsers are discussing innovative ways of collaboration. With limited access to the traditional methods of advertising, many celebrities have switched to shooting in their homes, with limited or no access to professional sets and equipment. We witnessed Karan Johar’s “Shot at Home” ad for Godrej Expert Hair Color and Ayushmann Khurrana’s Kitkat advertisement revolving around the new normal. Moreover, many celebrities have also shot their cover photos for various magazines at home, proving that the Indian ME industry has adapted to the pandemic shock over time. An industry spokesperson elaborated, “With the new normal, brands are taking things up a notch by rejigging the existing structures, celebrities are doing their own makeup, houses have become the new studios, advertisements are being shot without physically gathering of actors with more emphasis on working smarter given the revised marketing spends. Social media is the new currency and brands are experimenting. Ads have been democratized with every brand having the opportunity to choose and experiment with different artistes in the digital space on different target audience across different platforms with their revised budgets. While the bigger endorsement campaigns involving A-listers have shrunk in the past six- months, industry experts feel the curve may change in the coming months. Even for existing campaigns, the timelines have been revised but not cancelled and certain brands continue to stay loyal to the established celebrities and their marketing strategies.” COVID-19 and the Celebrity Endorsement Space “The days of basic collaboration deals are in the past. Celebrities have become more informed and surer of the products they wish to endorse, and are aligning themselves to the brand and the target audience while keeping in mind that the communication is an extension of their personalities. Even brands are seeking more involvement and immersive digital content from their endorsers. Specially in the time of COVID-19, penetration of digital OTT platforms and escalation of social media have increased as a marketing tool. Celebrities have continued to actively endorse products and services during the pandemic, while also being socially aware. An example would be Kohli’s recent association with Vize sanitizers, where he promoted the use of sanitizers to prevent the spread of COVID-19. He chose to donate all his profit to proceeds to help those affected by the pandemic.” Jogesh Lulla Chief Operating Officer Cornerstone 4 Media story by Times Now News Duff Phelps 11
  12. 12. Celebrity Brand Valuation Study 2020 COVID-19 also saw several creative non-celebrity advertisements. One such noteworthy advertisement is that of Cadbury Dairy Milk. The company recently launched an online campaign promoting indigenous vendors during Diwali. Every time the ad is viewed by someone in Ahmedabad, Delhi, Indore, Lucknow, Mumbai or Pune, it displays the local stores carrying the product. This prompts users to buy from these stores. Other brands like Airtel, Zomato and Unacademy have also launched various ad campaigns promoting social messages during the pandemic. As the country emerged from the shadows of lockdown, there was a new mindset being instilled among fellow citizens on “Be Indian buy Indian brands” to create a wave of self-reliance and boost the economy. This was reflected in social media campaigns as well as new start-up ventures by celebrities. In October 2020, Alia Bhatt launched her own sustainable kids clothing venture called Ed-a-Mamma. The brand focuses on a range of naturally sourced ethical clothing for children in the age group of 2-14 years. The clothes are environment friendly, made from natural fibers with plastic free buttons and trims, echoing Alia’s vision of nurturing a love for nature among children. More importantly it is also positioned as a home-grown, ‘vocal for local’ brand striking the right chord with new consumer preferences in a post COVID-19 era. Photo Courtesy: Alia Bhatt Instagram handle 12 Duff Phelps
  13. 13. Celebrity Brand Valuation Study 2020 Top Segments Using Celebrity Endorsers Personal Care Food and Beverages E-Commerce Healthcare Automotive Top Advertising Product Brands Lux Soap Boost Byjus Vicks TVS Harpic Bingo MPL Volini Hero Santoor Sunfeast PhonePe Mankind Kia Godrej Fortune Flipkart Suthol Apollo Tyres Colgate Lays Myntra Zandu Nityam Toyota Top Endorsers Akshay Kumar Virat Kohli Shah Rukh Khan Virat Kohli Amitabh Bachchan Kareena Kapoor Khan Ranveer Singh Virat Kohli Amitabh Bachchan MS Dhoni Anushka Sharma Akshay Kumar MS Dhoni Akshay Kumar Virat Kohli Alia Bhatt Salman Khan Aamir Khan Kareena Kapoor Khan Ayushmann Khurrana Varun Dhawan MS Dhoni Alia Bhatt Hrithik Roshan Tiger Shroff As part of our analysis, we examined the top 20 celebrity brands in India. These celebrities endorsed over 300 product brands across 20 different industry segments during the 12 months ending November 2020. Some of the key highlights of the research are presented below: Celebrity Endorsement Highlights Source: TAM media data for the period December 2019 to November 2020, Duff Phelps analysis Rankings are based on secondages—The number of seconds the celebrity appears on TV for a product brand—on TV Channels Television Endorsements Duff Phelps 13
  14. 14. Celebrity Brand Valuation Study 2020 Top Segments Using Celebrity Endorsers E-Commerce Food and Beverages Personal Care Automotive Smartphones Top Advertising Product Brands Upgrad Kwality Walls Nivea Tata Motors Realme Dream11 Too Yumm Garnier Gulf iQOO Uber Premier Pepsi TRESemme Kia Oppo PhonePe Snicker Maybelline TVS Vivo Tiktok Thums Up Godrej Apollo Tyres Samsung Top Endorsers Rohit Sharma Alia Bhatt Anushka Sharma Akshay Kumar Salman Khan Virat Kohli Virat Kohli Alia Bhatt MS Dhoni Virat Kohli MS Dhoni Salman Khan Ranveer Singh Tiger Shroff MS Dhoni Aamir Khan MS Dhoni Tiger Shroff Amitabh Bachchan Aamir Khan Ayushmann Khurrana Ranveer Singh Ayushmann Khurrana Alia Bhatt Ranbir Kapoor We also analyzed the digital presence of the top 20 celebrities on more than 100 websites like YouTube, Zee, Rediff, Yahoo, MSN, BBC, etc. As compared to advertisement on television, the digital advertisement space is expected to witness an explosive growth (CAGR of 27.4% from 2019 to 2025, compared with YoY growth from 2019 to 2020 of 10% for television)5 . Some of the key highlights of the research are presented below: Digital Endorsements Source: TAM media data for the period December 2019 to November 2020, Duff Phelps analysis Rankings are based on secondages—The number of seconds the celebrity appears on TV for a product brand—on TV Channels 5 Dentsu Aegis Network India: “Digital Advertising in India 2020” Duff Phelps 14
  15. 15. Celebrity Brand Valuation Study 2020 Product Brand Endorsements by the Top 20 Celebrities Source: Duff Phelps’ analysis based on endorsements of the top 20 celebrities 400 350 300 250 200 150 100 50 0 CAGR – 16.3% Y-o-Y – (3.5%) 2016 235 2017 272 2018 314 2020 357 2019 370 Cumulative Number of Endorsements by Top 20 Celebrities The cumulative number of product brand endorsements by the top 20 celebrities increased from 235 in 2016 to 370 in 2019, representing a CAGR of 16.3% over the last four years. However, due to the pandemic and subsequent lockdown restriction we saw the number of endorsements declined from 370 in 2019 to 357 in 2020 for the top 20, showing a decline in the growth rate of 3.5%. Duff Phelps 15
  16. 16. Celebrity Brand Valuation Study 2020 While COVID-19 did put a temporary halt on spending power, marketers continue engaging with celebrities to reach the masses and amplify their brand presence. With uncertainty lurking, multiple permutations and combinations are being adopted by agencies and businesses to capture the attention of audience. With a massive shift of consumers to digital and OTT especially during the pandemic, the demand for digital ads has spiraled. OTT stars and influencers are currently sharing the spotlight for digital ads. Brands are aggressively leveraging social media platforms and inclining towards influencer marketing. Existing influencers for each industry and celebrities with a strong social media presence are becoming big beneficiaries. Ads have been democratized, with every brand having the opportunity to choose and experiment with different influencers on different target audiences across different platforms with their revised budgets. “The Social Need” Over the last six months, celebrities have been continuously engaging with their fans through live chat sessions, short films, hashtag challenges etc. Even brand management agencies have adopted creative and unique marketing strategies. Recently, Flipkart roped in actor Varun Dhawan to promote its stay-at-home reality show, Entertainer No.1, launched under Flipkart Originals. The actor was seen posing in his shot-at-home ads, driving home the show’s concept of creativity while social distancing. The COVID-19 pandemic has also highlighted that a strong social media presence is no longer a “good to have” but rather a “must have” in the celebrity endorsement space. Certain celebrities like Kumar, Amitabh Bachchan, Sonu Sood have gained immense appreciation for their philanthropic contributions during the pandemic as they were seen spreading public awareness about COVID-19 through their social media handles. In 2020, we also saw Kareena Kapoor Khan joining Instagram to cater to the growing demand from both her fans and advertisers. She has 5.5 mn followers within 42 weeks of her joining Instagram, a testament to her strong popularity. The top five gainers (from the top 20 Celebrity Brands6 ) in the number of followers across social media platforms are listed below: Key Trends in the Celebrity Endorsement Space Embracing the New Normal Celebrity December 2019 (mn) November 2020 (mn) Annualized Growth 1 Tiger Shroff 30.1 57.2 107.7% 2 Kartik Aaryan 14.5 24.3 82.1% 3 Ayushmann Khurrana 17.4 27.0 69.5% 4 Akshay Kumar 90.9 133.4 60.1% 5 Virat Kohli 112.8 165.0 59.6% Source: Duff Phelps research 6 As per Celebrity Brand Valuation Report 2019 titled ‘New is Gold’ issued by Duff Phelps in February 2020 Duff Phelps 16
  17. 17. Celebrity Brand Valuation Study 2020 Ayushmann Khurrana, known for movies with social messages, has also recently been appointed as UNICEF’s celebrity advocate for children’s rights campaign, joining the likes of former football legend David Beckham. It is believed that his social media reach and following among the masses will help in creating greater awareness around the risk of violence and abuse against children. Not only has Ayushmann been endorsing several brands during the lockdown, he has also kept his fans entertained with his poetry on Instagram, leading to an increase in his followers by 69.5% (annualized) from 17.4 mn December 2019 to 27.0 mn in November 2020. With his affable and boy-next-door image, Ayushmann makes it easier for the audience to connect with him. Along with socially relevant issues, he talks through his movies and brand advertisements, the message reaches the public ‘loud and clear’ and stays beyond screen time. Given the indefinite absence from the silver screen, it will be interesting to see how celebrities continue to engage with their followers and how advertisers continue to adopt creative advertising strategies. Photo Courtesy: Shivam Gupta Duff Phelps 17
  18. 18. Celebrity Brand Valuation Study 2020 Instagram has unequivocally emerged as the most entertaining and engaging platform in recent times, owing to the plethora of content and creative visual aids available on the platform. Owing to its popularity among the millennials, even A-list celebrities are often seen posting frequently on Instagram. With the ban of TikTok in India, Instagram also launched its own short video feature called Reels. The new feature lets users create videos on the app, add creative filters and music, and share it beyond their regular followers. While we have seen these celebrities’ following increase over all three social media platforms, Facebook, Instagram and Twitter, we take a closer look at the Instagram engagement of the top five celebrity brands. While these celebrities’ followers count reflects their likeability among their fans (who are curious to know about their lives), the engagement index displays how much their fans find their content gripping and appealing. Brand companies look at both these metrics to decide on their campaign and marketing strategies and judge the level of likeability and influence these celebrities may have on their target customers. 7 Quality audience: reflects the number of followers whose activity is not identified as suspicious. We observe that the quality audience count has increased for our top five celebrities during the last year. 8 Engagement rate (ER): denotes the percent of the audience who like or comment on the posts (engage with the content). We observe that while the engagement rate for celebrities like Ranveer Singh and Virat Kohli has decreased, the ER rate has increased significantly for celebrities like Akshay Kumar, Deepika Padukone and Shah Rukh Khan. Celebrity Quality Audience7 (mn) (Dec 2019) Quality Audience (mn) (Dec 2020) Engagement Rate8 (Dec 2019) Engagement Rate (Dec 2020) 1 Virat Kohli 41.9 75.1 6.0% 3.3% 2 Akshay Kumar 29.6 41.8 2.0% 2.0% 3 Ranveer Singh 23.9 27.3 3.2% 1.5% 4 Shah Rukh Khan 15.8 19.1 4.3% 5.0% 5 Deepika Padukone 34.8 41.0 0.9% 3.3% The #Instagram Story Source: HypeAuditor Report Duff Phelps 18
  19. 19. Celebrity Brand Valuation Study 2020 The table below highlights product brands that have garnered the maximum digital Impressions and brand mentions over 2020 for the top five celebrities. A digital impression is the number of times the content is shown in a user’s social media feed whereas a brand mention means a brand is referenced, or “mentioned” on the web. Hence, “impressions” depict brand awareness, while “mentions” portray the engagement between the celebrity and the brands. Amongst all such endorsements, Flipkart (based on digital impressions), Byju’s and GoQii (based on brand mentions, with and without Twitter) appear to have created the maximum impact on digital media. 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Digital Impressions (Mn) Brand Mentions (Thousands) A and B denote the top 2 brands pertaining to the featured celebrity with maximum digital media impact. 0 5 10 15 20 25 A A B A B B A A B B Top 5 Celebrities: Product Brands with Maximum Digital Media Impact Virat Kohli Akshay Kumar Ranveer Singh Shah Rukh Khan Deepika Padukone Audi Q2 (A) GoQii (A) Bingo (A) Hyundai Creta (A) Flipkart (A) MRF (B) Kurkure Snacks (B) Redmi Note 7 Pro (B) Byjus (B) Louis Vuitton (B) Source: Meltwater and Duff Phelps analysis Social Media Influence Duff Phelps 19
  20. 20. Celebrity Brand Valuation Study 2020 “The last year has shown the biggest spike in digitization, automation, and creation of technology solutions globally, including in India. Even a 7 year-old has adopted digital-first education in COVID-19 times. For the expanse and depth of internet consumption, these have been unprecedented times. Brands that took stock of the crisis and monitored trends and consumer psychographics have emerged as profitable winners in 2020. Social media monitoring and listening have been pivotal in creating healthcare, sanitary and COVID-19 safety-compliant products and services. Brands that use services like digital monitoring efficiently to stay on top of trends have seen growth. We also noticed that brand campaigns built on social insights gain more traction and conversions, especially true for brands that used influencers and celebrities as authentic authority figures to drive messaging. With the film and production industry on hold— remote influencer campaigns have been success drivers for marketing. Our consumption patterns across demographics have changed, and some changes are here to stay. Brands that still fail to understand and optimize digital mediums are missing out on the digital revolution.” TCA Jayant Managing Director India South Asia Meltwater Duff Phelps 20
  21. 21. Celebrity Brand Valuation Study 2020 While the lockdown halted brand shoots and affected many celebrity endorsement deals, social media influencers saw an opportunity to promote their content and increase their following base. In a global report issued by Kroll, a division of Duff Phelps9 , the survey highlighted that more than a fifth (22%) of marketers at FMCG companies spend USD 1.1 mn-USD 5 mn on influencer marketing. The survey found that nearly half (46%) of respondents expect to spend 31%-50% of their total marketing budget on influencers by 2021. This reflects an increase of more than 20% compared to the average advertising spend on influencers in 2018-2020, indicating the influence of strong online presence. In India, not just Bollywood celebrities, but other well- known names are also emerging as influencers in 2020. One such example is Mira Kapoor, wife of actor Shahid Kapoor, who is now a top celebrity influencer. She has made a mark on Instagram as a lifestyle and wellness enthusiast. She is the first Indian celebrity to have her own Amazon landing page, which led to a spike in sales in the products that were featured. Mira has also created an intellectual property (IP), ‘The India Edit’, a video series that is written and hosted by her and is featured on her IGTV channel. This series covers lifestyle, beauty, wellness and fashion via candid conversations and fun banter, with guests and experts ranging from internationally renowned chefs, fashion designers and yoga experts. This show aims to bring to the fore the relevance and potential of the country we live in today. Further, brand management companies have also shifted the reach of their advertisements through these promising channels. Recently, OTT actress Mithila Palkar was signed on as the brand ambassador for “Mia by Tanishq”. 8 Media story by Inc42 Photo Courtesy: Mira Rajput’s Instagram Handle Influence of the Influencers 9 Kroll’s “Face Value Report: An Analysis of Influencer Marketing in the FMCG Industry” Duff Phelps 21
  22. 22. Celebrity Brand Valuation Study 2020 10 Media story by Inc42 Further, luxury brand MAC Cosmetics India launched a Diwali festive makeup range in collaboration with Shreya Jain, a well-known beauty blogger. The brand had earlier collaborated with Bollywood actress Disha Patani to launch its lipstick range. Further, brands like Oppo, Samsung, amongst others also ran parallel brand promotions with these influencers on social media channels. While the number of advertisements increased for these social media influencers, an article by Inc4210 , reported a decline in the influencers’ earnings by 60%-70% amidst lockdown. Interestingly, the Kroll report highlighted that while marketers at FMCG companies in Italy spend the most per influencer, they saw the lowest sales increase from their best influencer campaign at USD 408,703 compared to respondents in other countries. Brand companies in India may also be looking to maintain or increase their average ROI from influencers’ endorsement deals. While each brand management agency may adopt a different marketing and promotional strategy—either engaging with an established celebrity or an aspiring influencer or both, the end game continues to be increasingly driven by ever-changing consumer behavior patterns. Source: Kroll’s Face Value Report: An Analysis of Influencer Marketing in the FMCG Industry Global Influencers’ Sales-Expense Analysis in the FMCG Industry UAE $15,612 $18,415 $13,153 $22,104 $22,622 $24,861 $26,337 $24,952 $29,972 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 UK US France Germany Spain Netherlands Ireland Italy Cost per Influencer (USD/Year) Sales Increase from Best Influencer Experience (USD) 1,006,651 1,246,039 891,131 408,703 655,094 736,809 949,304 921,567 524,311 Duff Phelps 22
  23. 23. Celebrity Brand Valuation Study 2020 Over the years, sports such as badminton, football and kabaddi have become more relevant than before. However, Indians continue to worship cricket, largely driven by the IPL. IPL 13 registered seven billion viewing minutes for the first 41 matches aired across 21 channels, 28% higher than IPL 12, which received 5.5 billion viewing minutes for 44 matches aired across 24 channels.11 Some notable endorsements signed by cricket celebrities in 2020 include Virat Kohli’s partnerships with Great Learning and iQOO and Rohit Sharma’s partnerships with Cadbury Bournvita and BharatPe. Another noteworthy development in the last year was Mahendra Singh Dhoni announcing his retirement from international cricket. However, despite being retired, Dhoni was still a favorite for brands during the IPL 13, leading the pack with 10 endorsements. Rise of Sports Celebrities IPL-12 Growth% IPL-13 98 mn Cume Reach12 11% 108 mn Cume Reach 5.5 bn Viewing Min 28% 7.0 bn Viewing Min “The connect that any sports celebrity makes with the audience cannot be compared to that of a movie celebrity. While the brand connect of Indian movie stars may evolve with every new movie, a sports celebrity expands the brand connect through his/her whole career journey with the audience. The beauty of sports is that it is a seamless way for brands to connect with their target audience, in a space that fans like and are emotional about.” 11 As per estimates provided by Broadcast Audience Research Council India (BARC India), in various news articles 12 Number of individuals (‘000s) that viewed at least one of the events in a set of events 13 Viewers/ viewership per match IPL 12: 44 matches aired across 24 channels IPL 13: 41 matches aired across 21 channels Source: BARC India13 Yashwanth Biyyala Director Baseline Ventures Duff Phelps 23
  24. 24. Celebrity Brand Valuation Study 2020 The rise of sports celebrities can also be seen in the increased popularity of online gaming. The industry has benefitted greatly during the pandemic, and as people continued to stay at home for most of 2020, online gaming companies increased traction across the country. Further, many gaming platforms received funding in 2020, with funding rounds led by Dream11, Mobile Premiere League and Paytm First Games. Online Gaming Funding Overview Source: PrivateCircle database, Duff Phelps analysis Online Gaming Funds Raised (USD Mn) No. of Deals 0 50 100 150 200 250 300 350 Q1 (Q4 2020 uptil November) Q2 Q3 Q4 0 2 4 6 8 10 12 14 16 18 30.9 108.7 20.0 27.3 21.6 320.7 28.2 19.8 9 11 10 11 11 14 8 16 • Funds Raised in 2019 No. of Deals 2019 • Funds Raised in 2020 No. of Deals 2020 Duff Phelps 24
  25. 25. Celebrity Brand Valuation Study 2020 Several online gaming companies are engaging with sports celebrities to promote e-sports, including Dream11 and My11Circle who signed Rohit Sharma and Sourav Ganguly as brand ambassadors in 2020. We analyzed the recent celebrity deals with gaming and e-sports platforms. While gaming company Mobile Premiere League has had Virat Kohli as its celebrity endorser, it also partnered with Bollywood and regional star Tamannaah Bhatia in 2020. Gaming companies WinZo and Zupee also raised funds of USD 14.4 mn and USD 8.1 mn respectively but do not have celebrity endorsements. Online fantasy sports (OFS) is one of the leading online gaming sub-segments with close to 140 operators and more than 100 million estimated users in 2020, despite being banned in a few states.3 Source: PrivateCircle database, Duff Phelps analysis Brand Funds Raised in 2020 (USD mn) Celebrity Endorser Comments Dream 11 223.3 Rohit Sharma Signed in 2020 MS Dhoni Endorsing since 2018 Mobile Premier League 104.1 Virat Kohli Endorsing since 2019 Paytm First Games 15.5 Sachin Tendulkar Signed in 2020 Halaplay 0.4 Krunal and Hardik Pandya Endorsing since 2019 My11Circle - Sourav Ganguly Signed in 2020 Celebrity Endorsements for Online Gaming “We continue to see sporting legends like Sourav Ganguly and Sachin Tendulkar on television even though they have retired. Due to commentary and a great social media presence, veterans like Sehwag and Kapil Dev have built an image of undying loyalty and a fan following over the past years. The stature of these legends appeals to brands and consumers, making them a constant favorite amongst the brands.” Jogesh Lulla Chief Operating Officer Cornerstone Duff Phelps 25
  26. 26. Celebrity Brand Valuation Study 2020 Abhishek Madhavan Marketing Head Mobile Premier League Over the past few years, the gaming and e-sports industry has grown exponentially. It was on a steady rise in India even before the lockdown, and its growth was further accelerated by the turn of events. The online gaming industry in India is expected to grow at a CAGR of 47% by FY22. The industry is expected to grow 41% annually due to the growth of digital infrastructure and substantial rise in quality and engaging gaming content. By 2024, the gaming industry in India is set to be valued at USD 3.75 bn.14 In an interview with Duff Phelps, Abhishek Madhavan, Marketing Head of Mobile Premier League shared his insight on the online gaming industry in India. • Please briefly discuss the impact of COVID-19 on the online gaming industry from the perspective of brand marketing and celebrity endorsements. What the lockdown has done is fast-tracked an already developing mobile gaming and e-sports ecosystem. Even before the lockdown, gaming was on the rise globally and especially in India. Online gaming in India has seen a year-on-year growth of nearly 30%. Last year, India overtook the U.S. to become the second largest game download market in the world with over five billion installs, and the lockdown has further accelerated this growth. Since March 2020, online gaming has seen an accelerated growth curve and we have seen many celebrities endorse different online brands. Since online gaming and e-sports is still a sunrise sector in India, most of these brands need a dimension of trust and added credibility from the endorsement of a well-known celebrity. For brands seeking to reach massive scale in a much shorter period of time, or trying to establish a new category, celebrities provide a way to quickly cut through the clutter. • Please discuss MPL’s ideology behind partnering with Virat Kohli and Tamannaah, stars from different industries, to represent the brand. What are some of the factors you consider before choosing a celebrity endorser? Virat Kohli is an inspiration and a role model for youth today. We have seen him lead our under-19 team to the World Cup and take Indian cricket to great heights across formats as captain of the senior men’s team. He represents trust and dependency and his appeal is pan- India, which is rare for a celebrity. Virat has the same traits as MPL—young, bold, aggressive and competitive, so he was a perfect brand fit for us as we looked to scale rapidly from a younger brand to a household name. Tamannaah Bhatia is one of the rare actors popular in all four southern states, which is why we use her extensively in our campaigns across the South India. South India is an important market for us, so signing Bhatia, along with Kohli, has worked well for us. • Please share your short and long-term outlook on the future of online/mobile gaming in India. Mobile gaming is a sunrise sector and is growing exponentially. According to Mobile Marketing Association, the revenue from the mobile gaming industry in India will be worth USD 943 mn by 2022. This is a growth of more than 200% over a period of six years from USD 466 mn in 2016. This growth is supported by a similar increase in the number of mobile gamers, which will reach 368 mn by 2022, up from 269 mn in 2019. As the gaming market matures, we will see even more home-grown games, such as Rogue Heist and World Cricket Championship, and developers gain traction in India and maybe even abroad. Also, because of the ubiquity of smartphones, as e-sports supersedes physical sports over the next few years, we will hopefully see the emergence of global gaming superstars coming from India. 14 Media story by Financial Express Duff Phelps 26
  27. 27. Celebrity Brand Valuation Study 2019 As COVID-19 negatively impacted most of the traditional industries, it proved to be a boon for certain new-age technology industries. One of the greatest beneficiaries were EdTech companies, driven by the closure of educational institutions and disruption to standard education delivery. Convenience and cost efficiency were the other drivers, placing the online education sector in the spotlight. EdTech was also one of the most funded industry in 2020 as close to 50 EdTech startups raised funds during March to November 2020. The funding rounds were primarily led by Byju’s, Unacademy and Vedantu. With an improving digital infrastructure, the top 12 EdTech companies spent more than USD 27 mn on advertising in the first half of 2020 and are estimated to spend another USD 40.5 mn during the second half of 202015 . Several EdTech companies signed on celebrities as brand ambassadors to attract consumers and increase brand awareness. EdTech and Celebrity Endorsers EdTech Funding Overview “The descent of celebrities in some of the largest VC funded EdTechs’ advertisements have brought Bollywood and sports (mainly cricket) stars to education. It also shows the need for more reach, as these companies are gunning for faster growth fueled by VC money. The trend is being seen largely in B2C focused companies, which had earlier reached (maybe) the top 1% of the addressable market and are now broadening their reach to millions more, with COVID-19 bringing more legitimacy to digital learning than any advertisement could.” Funds Raised (USD Mn) No. of Deals 0 200 400 600 800 1000 Quarter 1 (Q4 2020 uptill November) Quarter 2 Quarter 3 Quarter 4 1200 0 5 10 15 20 25 30 35 23 25 27 22 19 31 15 28 • Funds Raised in 2019 No. of Deals 2019 • Funds Raised in 2020 No. of Deals 2020 90.1 318.8 73.5 346.9 1043.6 11.7 74.8 423.4 Source: PrivateCircle database, Duff Phelps analysis Debleena Majumdar Cofounder of Kahaniyah and Story Ed and ET Prime contributor 15 Media story by Live Mint Duff Phelps 27
  28. 28. Celebrity Brand Valuation Study 2020 We analyzed the recent celebrity endorsements for EdTech companies and observed that startups like Great Learning and Eduauraa signed Virat Kohli and Ranveer Singh as celebrity brand ambassadors. Further, Vedantu, WhiteHat Jr and Gradeup (also backed by strong VC investments) also signed celebrity endorsements during the second half of 2020. While EdTech unicorn Byju’s has Shahrukh Khan as its celebrity endorser, it also signed Kannada superstar Sudeep Sanjeev in 2020 to launch their first TV ad campaign in Karnataka. Byju’s also has Mahesh Babu as another regional celebrity endorser. In addition to having Aamir Khan as a celebrity endorser, Vedantu (who raised more than USD 135.9 mn in 2020) also conducted a Master Class with Deepika Padukone and Vidya Balan. Further, Unacademy, who raised more than USD 258.5 mn in 2020, has not had any celebrity brand ambassadors to date. However, it also conducted Master Class sessions with Virat Kohli and Anushka Sharma in 2020. As the EdTech industry continues to grow exponentially, it will be interesting to see how the celebrity brand association evolves in parallel. Source: PrivateCircle database and Duff Phelps analysis Brand Funds Raised in 2020 (USD mn) Celebrity Endorser Comments Byju’s 908 Shah Rukh Khan Endorsing since 2018 Vedantu 136 Aamir Khan Signed in 2020 WhiteHat Jr 19 Hrithik Roshan Signed in 2020 Gradeup 3 Kartik Aaryan Signed in 2020 Great Learning - Virat Kohli Signed in 2020 Eduauraa - Ranveer Singh Signed in 2020 Tutorix - Ayushmann Khurrana Signed in 2020 Celebrity Endorsements for EdTech Brands Duff Phelps 28
  29. 29. Celebrity Brand Valuation Study 2020 Industry Speaks Duff Phelps 29
  30. 30. Celebrity Brand Valuation Study 2020 Vinit Karnik Business Head GroupM ESP #1 Please discuss the impact of COVID-19 on the celebrity endorsement business, and what has been the strategy to overcome this situation (from a brand deal perspective)? COVID-19 has not impacted the endorsement business significantly. Celebrities have been extremely engaged throughout the lockdown period and have been adding value in the form of social media posts, virtual shoots, etc. Hence the deal size in respect of the monetary value hasn’t taken a big hit. Most A-list and new age celebrities from Bollywood and sports have added newer deals or brand engagements to their portfolio this year. #2 You mentioned that sports celebrity endorsements have seen a spike this year. Could you briefly elaborate on the evolution of sports celebrities in terms of brand endorsements, given the cancellation of majority of the sporting events this year? One big difference between film stars and sports stars is that sports stars are our national heroes and make India look good by winning medals or tournaments. Sports celebrities are seen as ambassadors of positive and socially relevant messaging, especially during lockdown when the country was overwhelmed by negative news. #3 How much weight would brand managers typically ascribe to a strong social media presence when choosing to engage with a celebrity? Do you witness a trend in new age celebrities being favored over A-listers on digital media? Social media engagement is one of the most important elements for brand communication. Therefore, it’s important that celebrities stay active on social media. Endorsement fees of a celebrity is linked to and aligned with their social media numbers and engagement with fans. Barring very few celebrities, most have built their fanbase around a very structured approach to social media and this certainly builds a case for the celebrity in the evaluation stage. The decision to pick the right celebrity to endorse a product totally depends on brand fit and the celebrity’s ability to influence the consumer for a particular brand category with a very strong focus on the credibility quotient. For tactical and short-term campaigns, new age celebrities make it to the final cut based on their social media engagement, but brand fit and credibility among the audience are non-negotiable aspects. #4 How would you summarize key changes in marketing strategies pre- vs. post COVID-19? Digital and social media have gone from being one of the elements in the overall media mix, to become the main medium. Influencer campaigns have been on the rise over the past 3 years, but COVID-19 has certainly given brands a new definition to the influencer campaign and scaled up the usage and frequency. Most of the brands could not shoot during the lockdown and hence influencer campaigns with virtual/home shoots became critical and also the economical solution. Production deals with respect to cost of shoots will be evaluated fairly post COVID-19. #5 How do you see the [growing] association of emerging sectors and celebrity endorsers playing out in the short-term (1-2 years) and long term? In 2020, sectors such as EdTech and online gaming saw a spike in funding and celebrity endorsers. Please share your views. The emergence of new sectors is a cyclical process. While COVID-19 may have helped in prioritizing some of the sectors and categories by giving them wings, the emergence of newer categories has increased the demand for celebrity endorsement. The prime reason for this trend is it gives instant recognition, acts as a differentiator and most importantly breaks the clutter in a competitive marketplace. Duff Phelps 30
  31. 31. Celebrity Brand Valuation Study 2020 Sandeep Bhushan Director and Head of Global Marketing Solutions Facebook India #1 How has COVID-19 changed the influencer marketing landscape? Why are brands turning to influencers during the pandemic? Since the pandemic began, there’s been a fundamental change in digital consumption, be it for education, payments, business or communication. Culture has truly gone virtual, as witnessed by the more active use of the Facebook family of apps. In many countries hit hardest by the virus, total messaging increased by more than 50% on WhatsApp and Messenger in March. Similarly, voice and video calling doubled on Messenger and WhatsApp. In India, there was a 60% rise in Instagram Live views in March on a week-on-week basis. As a result, businesses need to communicate with customers in creative ways using digital platforms, while driving efficiency with every dollar. As consumers seek surrogate experiences, where they can’t touch and feel a product, they could be offered a more immersive ad. Similarly, they can’t ask questions in a physical store, but they can to an influencer. As per a BCG-Facebook “Turn-The-Tide” report, digital influence has increased significantly in urban consumers—up to 70% for mobiles, 55%-60% for apparel and up to 20-25% for the non-food consumer packaged goods (CPG) categories. Instagram is the place where people express themselves creatively, and there’s a natural affinity to interact with public figures, creators and brands. In fact, 90% of people on Instagram globally follow a brand. Engaging with influencers is a way for brands to showcase their value meaningfully and with greater business impact. We’re seeing this happen already. For example, Hyundai Aura launched with influencers and saw a 5-point lift in awareness. Similarly, a 2.3 point increase in purchase intent for Cadbury Cocoa when they used influencers. #2 How do you think social media advertising and influencer marketing are going to evolve post COVID-19, then things start to normalize? Since the start of the pandemic, there have been several changes for businesses. Some of those are short term in nature. For instance, if people still aren’t stepping outside to dine, online delivery will pick up. Another relates to hygiene, which may or may not go back. There are fundamental changes in digital consumption, be it for education, payments, business or communication and we believe they are here to stay. We know mobile consumption and interactions on social media have increased significantly. Mobile influence, which is the impact and interaction on mobile devices, is up. We have the privilege of hosting over three billion people on our platforms globally, and we know usage has increased. Engaging with influencers is one more layer, where they can be the voice of a brand, especially in the situation we’re in today, and we’re seeing brands on this journey already. There are also brands that, in a way, are born on Instagram i.e., who’re prominently using Instagram to build their business, like Wingreen Farms and Bunaai. So, whether it’s a big or small business, influencer marketing on Instagram is driving business impact, and that’s why it’s set to grow. #3 Do you witness a trend in new age celebrities being favored over A-listers on digital media? Brands are essentially looking for one thing and that is business impact. This could be in the form of sales or salience. Any influencer marketing campaign should deliver on either or both of these. So, the approach isn’t about using a public figure or a nano-influencer, it’s about using the authentic voice Duff Phelps 31
  32. 32. Celebrity Brand Valuation Study 2020 of the influencer, who could represent the brand’s message, and bring it alive in his or her content. Puma is a great example, as they partnered with Kareena Kapoor Khan to promote their collection this year, coinciding with her joining Instagram. They extensively used their brand ambassador, Virat Kohli, for a variety of campaigns, along with other prominent sports stars like KL Rahul and Mary Kom. They’ve also engaged with emerging Instagram creators like Eshna Kutty (from the ‘Saree flow’ fame). What is crucial is that brands work with influencers early in their campaign and thereafter use regular media principles to amplify the same. Through media planning, brands can achieve the desired reach and frequency, because branded content ads deliver on both. #4 How have creators leveraged Instagram and Facebook as social media platforms to stay connected with their audiences? We saw Ins- tagram introducing multiple new features like Reels and Guides, especially following the TikTok ban. 2020 has been an extremely dynamic year for influencers. While on one hand, they’ve felt the same challenges as everyone else, like being constrained to their homes and restricted from travelling, on the other, it has provided opportunities to be discovered, grow and test the levels of their creativity. Creators have been focused on keeping their communities informed and inspired. This began with social messages delivered through challenges like the #SafeHandsChallenge and the use of the “Stay Home” sticker. It went on to keep people inspired, like when Deepika Padukone and The Live Laugh Love Foundation which released a guide on Instagram that focused on mental health. Another example is when national and regional musicians, such as Armaan Malik and Lisa Mishra, performed in live music concerts called “Live In Your Living Room.” This progressed to leveraging new opportunities with short form content, offered by new features like Reels. This has helped uncover a new generation of influencers who’ve grown exponentially on Instagram. Creators have also used Reels to work with brands, like Myntra which published “How To” reels featuring creators. Some creators have also launched their own collections in association with brands. For example, online fashion retailer Alaya by Stage3 worked with fashion influencer, Sakshi Sindwani, to launch a range of festive wear ahead of Diwali. #5 What are some of the industry triggers for the platform to constantly evolve? Any upcoming initiatives or strategies for the Indian market that you would like to share? Influencers leverage Instagram for their creativity in content and amazing social video moments. They inform and inspire their community through their pursuit of passion. This highlights the opportunity for brands who can meaningfully engage with the creator community. We want to spur this interaction between creators and brands, in a way that redefines the ecosystem and allows stories to be told with greater business impact. We launched Instagram’s first business marketing campaign—Love Runs Deep—and invited brands to submit their briefs. Five of them will be chosen to have exclusive access to 25 creators to work with them free of cost, in addition to support to run their campaigns. To help increase transparency, we recently launched the Branded Content tag for Reels, and we will begin testing it on ‘Instagram Live’ in the coming weeks. Duff Phelps 32
  33. 33. Celebrity Brand Valuation Study 2020 Karthik Srinivasan Communications Consultant #1 What are the major attributes/factors considered by brands when they associate with a celebrity? The primary factor is usually visibility and clutter breaking. The simple thumb-rule is if the celebrity is swapped with a normal model, would it break the clutter and make the target audience spend that extra second in the communication? That’s the first need for a well-known person in brand communication of any sort. #2 Please share your views on the rise of Over the Top media (OTT) celebrities and their use in digital ad campaigns. Also, will it still rise once the pandemic is over? I don’t differentiate between film celebrities or OTT celebrities. Actors who frequent TV shows are enormously popular in the West (for instance, stars from Game of Thrones) and this is a good opportunity for India too, though many stars who act in TV shows also dabble in mainstream movies. OTT-first stars, by nature of their shows doing enormously well, could appeal to a wide audience too. For instance, Pratik Gandhi who plays Harshad Mehta in Scam 92 could be that kind of a breakout star given the popularity of the show. #3 Do the brands perceive bloggers to have a bigger influence on social platforms than A-list or mid-category celebrities? I think so, yes. Celebrities who have harnessed fame by tools other than social media are different from those who have built their fame entirely on social media. The former depends on their offline work (movies, TV shows, etc.) being in the limelight, while occasionally using the social media tools to be in front of people—their primary draw is their actual source of fame. Whereas bloggers have nailed the art of using social channels to be in limelight consistently, a skill lucrative for brands to dip into. #4 With the rise in consumer shift to digital platforms, are campaigns now being structured to accommodate more digital and less traditional media space and how are the elements of social media addressed in these endorsement contracts? The earlier methods were very cookie-cutter, primarily driven by influencer marketing agencies and middlemen who define deliverables in linear terms (number of posts etc.). The shift is towards a better way to integrate influencer marketing in the overall marketing mix—they are a part and they need to be seen as one of the many contributors to the metrics. They increase the number of touchpoints through which brands can reach target users, and also serve as a human connection to brand communication. In terms of engagement, brands and agencies need to think long-term, and focus on not just about one-off efforts because they are increasingly being seen as disingenuous. Duff Phelps 33
  34. 34. Celebrity Brand Valuation Study 2020 In assessing celebrity brand value, we faced several challenges that one would not normally encounter when valuing a corporate brand using conventional and generally accepted valuation methodologies. Most importantly, a celebrity brand is not an indefinite-lived asset. In addition, a celebrity brand cannot be monetized through a licensing arrangement. While it may be argued that a celebrity can earn a royalty from products that they have associated his or her name and likeness with, such arrangements are limited to a few participating celebrities. While in India, similar arrangements are gaining popularity, we have not considered merchandising earnings in the current analysis, as the earnings from a product brand endorsements would still represent the largest contributor to a celebrity’s brand. Further, it is important to note that as part of our analysis, we have not taken into consideration the amount celebrities earn from films and production houses that they run. We contend that while these aspects do impact their earning capacity, they have no direct bearing on the celebrity’s income from endorsements alone. Our assessment represents the brand value of a celebrity based purely on their earnings potential from product brand endorsements. In order to adequately capture the definite life of a celebrity brand, we considered several conventional methodologies. However, we did not think it was appropriate to forecast increases/decreases in forward earnings in our methodology since the popularity of a particular celebrity is limited to the present and the recent past. Bad brand management (for example, a year of flops or bad performances) by the celebrity can quickly result in a lower demand for his or her services as a brand endorser. That said, we have kept in consideration the ongoing pandemic and its effect on both the ongoing and prospective celebrity brand engagements, given our discussion with industry partners. Our assessment is based on the relative brand rankings of celebrities, average endorsement fee rates, normalized number of annual endorsements and applicable brand multiples. Valuation Methodology Determine relative brand ranking on the basis of various parameters Celebrity Brand Analysis The applicable brand multiple represents the capitalization rate adjusted for recent success and popularity Applicable Brand Multiple Average endorsement fee multiplied by the number of endorsement deals Average Annual Endorsement Revenue Duff Phelps 34
  35. 35. Celebrity Brand Valuation Study 2020 There are several sources and agencies that use proprietary tools and methodologies to rank celebrities. For our assessment, we have used a combination of rankings available in the public domain. However, over the course of our discussions with experts from the celebrity endorsement industry, we found that several of these rankings ignore a celebrity’s social media involvement. Social media may not be the most important aspect when selecting a celebrity, but it plays a huge role in building credibility and in developing a fully engaged fan base. Some celebrities have achieved reasonable success with carefully planned social media programs. In 2020, social media/digital platforms played a crucial role in connecting celebrities with their followers during the COVID-19 pandemic. 0 20 40 60 80 100 120 140 160 180 165.0 Virat Kohli Akshay Kumar Ranveer Singh Shah Rukh Khan Deepika Padukone 90.0 112.8 76.3 90.9 133.4 36.8 51.6 61.9 81.1 87.8 106.4 87.1 100.9 126.1 • 2018 • 2019 • 2020 35.4% CAGR 32.3% CAGR 29.7% CAGR 14.5% CAGR 20.3% CAGR Top 5 Celebrities’ Social Media Following across Facebook, Twitter and Instagram over Last 3 Years (in mn) CAGR: Compounded Annual Growth Rate Source: Duff Phelps analysis Celebrity Brand Analysis Duff Phelps 35
  36. 36. Celebrity Brand Valuation Study 2020 Our celebrity social media rankings are based on the number of Twitter, Facebook and Instagram followers as of November 2020 and the engagement per post provided by Meltwater. As per Meltwater, the engagement per post metric is computed by considering all forms of engagement (reactions, comments and shares on Facebook; replies, retweets and likes on Twitter; and likes and comments on Instagram) since the inception of the account and dividing it by the number of posts. The table below shows the social media presence for the top celebrities in India as of November 2020. Our concluded celebrity brand rankings are based on a weighted average of the social media presence and engagement per post on social platforms. The celebrity brand rank so computed has been accounted for in the popularity index adjustment (see “Applicable Brand Multiple” section). Rank Celebrity Twitter Followers (in mn) Facebook Followers (in mn) Instagram Followers (in mn) Total Followers (in mn) Engagement per Post (in mn) 1 Virat Kohli 39.0 43.4 82.6 165.0 2.8 2 Akshay Kumar 39.7 46.7 46.9 133.4 1.5 3 Ranveer Singh 13.8 13.9 34.2 61.9 1.0 4 Shah Rukh Khan 41.3 41.6 23.4 106.4 1.0 5 Deepika Padukone 27.7 46.1 52.3 126.1 0.7 Source: Meltwater and Duff Phelps analysis Duff Phelps 36
  37. 37. Celebrity Brand Valuation Study 2020 Average annual endorsement revenue is computed as the product of average endorsement fee and the normalized number of endorsement deals for each celebrity. Further, the number of endorsement deals for each celebrity is primarily based on actual advertisements on television and social media. In estimating the average endorsement fee and the number of endorsements, we acknowledge the contribution of GroupM ESP as an industry contributor. Further, we also consulted other industry participants and reviewed secondary sources such as news and media articles. Applicable Brand Multiple The adjusted brand multiple represents the rate of capitalization for celebrity brands, adjusted for the following parameters: • Age: We have adjusted for the age of the celebrity in conjunction with the current and typical peak age. Although there are few female celebrities over the age of 40 who continue to endorse products; it should be noted that certain stars are active brand endorsers despite not making it to the list of top celebrity endorsers. On the other hand, aging male celebrities in India continue to remain in high demand for endorsements, mainly driven by a late peak age and continued film successes. For example, 78-year-old Amitabh Bachchan continues to remain among the most sought-after celebrities for endorsements. • Popularity index: This adjustment index is computed by looking at celebrity brand rankings (based on data from social media platforms, etc.). The relevance of an adjustment on account of social media followers continues to gain substantial importance stemming from the ongoing pandemic. • Recent success: This factor is analyzed by reviewing the number of hits (good performances) versus the number of flops (bad performances) a celebrity has had over the last 10 movie performances or relative on the field performance of sports celebrity. The factor has been adjusted keeping in mind the COVID-19 lockdown which led to almost no box office releases this year. Celebrity Brand Value Finally, celebrity brand value has been computed as the adjusted average annual endorsement revenue earned by a celebrity (after deducting relevant costs including taxes) multiplied by the adjusted celebrity brand multiple so derived. Average Annual Endorsement Revenue Duff Phelps 37
  38. 38. Celebrity Brand Valuation Study 2020 2017 2018 2019 2020 0 100 200 300 400 500 600 Virat Kohli Akshay Kumar Ranveer Singh Shah Rukh Khan Deepika Padukone 144 47 42 106 93 102 94 50 51 103 119 238 66 94 105 238 61 63 67 171 Brand Value of Top 5 Celebrities (USD Mn) The total brand value of the top 20 celebrities in India is USD 1 bn, which represents a de-growth of about 5% as compared to last year. Virat Kohli claimed the throne yet again with a brand value of USD 237.7 mn. His exceptional performance on the cricket field and an unwavering audience connect makes him an obvious choice for brands. With a roster of more than 30 brands in his portfolio, the Indian skipper continues to remain a favorite with brands across industries. The Indian cricket team captain also tops the social media ranking and has the best engagement rate amongst all celebrities that we valued.16 Even when the pandemic halted show business, Akshay Kumar managed to combat the hurdle by venturing into the OTT space and delivered an OTT runaway hit, Laxmii. He is the only Indian actor to be featured on the prestigious Forbes Celebrity 100: The World’s Highest-Paid Celebrities 2020 list with earnings of USD 48 mn17 . Being a social and philanthropic figure, he also partnered and participated in social initiatives such as the #DilSeThankyou campaign to thank the police force, medical workers, vendors and others for their services during the pandemic, and starred in a COVID-19 awareness campaign for the Ministry of Health. Kumar retained his second spot, with a brand value of USD 118.9 mn. Valuation Conclusion 16 As per Meltwater, the engagement per post metric is computed by taking into account all forms of engagement (reactions, comments and shares on Facebook; replies, retweets and likes on Twitter; and likes and comments for Instagram) since the inception of the account and divides it by the number of posts. 17 Media Story by Bollywood Hungama Duff Phelps 38
  39. 39. Celebrity Brand Valuation Study 2020 The powerhouse of Bollywood Ranveer Singh landed the third spot on our list with a brand value of USD 102.9 mn. With ten years of experience in the industry, Ranveer Singh has left millions imprinted with his on-screen charisma and fashion choices. He has grown exponentially as an actor playing several challenging roles and has successfully attracted brands with his style and substance. Recently, the versatile actor has been made the brand ambassador of Eduauraa, operating in the EdTech space. Further, Ayushmann Khurrana climbed the ladder to the sixth spot demonstrating that patience, perseverance and fearlessness never fail to deliver. He was also featured in TIME magazine’s 100 Most Influential People of 2020 list. With an OTT release of Gulabo Sitabo alongside veteran actor Amitabh Bachchan, he ensured audiences were entertained during the pandemic. From startups to mobile, from beverages to clothing, from grooming products to watches, Ayushmann is endorsing more than two dozen top brands. Sharing the sixth position with Ayushmann is the recently turned entrepreneur Alia Bhatt. While the lockdown halted box office releases, Alia has been creating a buzz with her recent ventures. In October 2020, she invested an undisclosed amount in the lifestyle retail brand Nykaa and from investor to entrepreneur launched her own conscious clothing apparel brand for children, Ed-a-Mamma. 2020 has been a roller coaster ride that none of us signed up for. The year saw a massive shift in consumer demand from traditional media to digital and OTT, and celebrities adapting by engaging with their audiences in new and unique ways. With the future still a bit uncertain, we hope that people stay home, stay safe and stay tuned as we “Embrace the New Normal” in 2021. “While established celebrities continue to dominate our rankings, notable millennials with a strong social media presence continue to climb the ladder. Ayushmann Khurrana, Tiger Shroff and Rohit Sharma all jumped a few spots to grab the No. 6, No. 15 and No.17 spots, respectively. Further, Kartik Aaryan debuts on our list at No. 20. These rising millennial celebrities were in greater demand during the pandemic owing to their popularity among the youth.” Aviral Jain, CFA Managing Director Duff Phelps Duff Phelps 39
  40. 40. Celebrity Brand Valuation Study 2020 Limitation of the Study The analyses and estimates presented in this report are based on extensive research on secondary sources of information and are limited primarily to discussions with industry participants. We have not undertaken any independent verification or carried out any due diligence on the data used or considered, nor have we verified its factual accuracy in the current context. Brand values may differ based on actual information available with agencies that engage with celebrities directly. Further, this study does not take into consideration the amounts celebrities earn outside of product brand endorsements. The conclusions provided in this report shall not be construed as marketing advice, and the valuations provided shall not be used for any purpose other than general research and media consumption. Duff Phelps and its affiliates expressly disclaim all liability for any loss or damage of whatever kind that may arise from any person acting on any information and opinions or analyses relating to the valuations contained in this report. The valuation of intangible assets is not a precise science, and the conclusions arrived at in many cases will of necessity be subjective and dependent on the exercise of individual judgment. There is therefore no indisputable single value, and we normally express our opinion on the value as falling within a likely range. However, for the said purpose, we have provided a single value. Under normal circumstances, our assumptions and methodologies are supplemented by discussions with the management and insights provided by them on the most likely course of business/ brand over the near term. Our current assumptions for the valuation are based on information derived and analyzed from a combination of primary interviews and secondary sources. Accordingly, our assessment and estimates are based on market perceptions and the most likely trends of popularity of individual celebrities. Others may place a different value on the various celebrity brands. All trademarks, trade names and logos referenced herein are the property of the respective companies and owners. Duff Phelps 40
  41. 41. Celebrity Brand Valuation Study 2020 Star Cast Working with Numbers Vedant Rathi Scanning the Market Aditi Sharma In-talks with Industry Priyanshi Parekh Credits Writing and Direction Marketing and Distribution Designing it All Haris Khanche Designing it All Mona Bagla Spreading the Word Disha Hoskote Production and Quality Censor Board Gary Roland Production Leader Varun Gupta Writing the Script Vibhor Nayar Directing the Show Aviral Jain Capturing the Trends Aakriti Gupta Duff Phelps 41 C E L E B R I T Y B R A N D VA L U AT I O N R E P O R T 2 0 2 0 Embracing the New Normal
  42. 42. About Duff Phelps Duff Phelps is the world’s premier provider of governance, risk and transparency solutions. We work with clients across diverse sectors in the areas of valuation, corporate finance, disputes and investigations, cyber security, claims administration and regulatory compliance. With Kroll, the leading global provider of risk solutions, and Prime Clerk, the leader in complex business services and claims administration, our firm has nearly 4,000 professionals in 25 countries around the world. For more information, visit www.duffandphelps.com. © 2021 Duff Phelps, LLC. All rights reserved. DP203653 MA advisory, capital raising and secondary market advisory services in the United States are provided by Duff Phelps Securities, LLC. Member FINRA/SIPC. Pagemill Partners is a Division of Duff Phelps Securities, LLC. MA advisory, capital raising and secondary market advisory services in the United Kingdom are provided by Duff Phelps Securities Ltd. (DPSL), which is authorized and regulated by the Financial Conduct Authority. Valuation Advisory Services in India are provided by Duff Phelps India Private Limited under a category 1 merchant banker license issued by the Securities and Exchange Board. Mumbai 14th floor, Raheja Tower Bandra Kurla Complex, Bandra (East) Mumbai 400 051 +91 22 6623 1000 Bangalore 4th Floor, Unit No 303 SKAV Lavelle 909, Lavelle Road Bengaluru 560001 +91 80 6125 6100 New Delhi 206/207, WorldMark 2 Hospitality District, Aerocity New Delhi 110037 +91 11 4935 9800 Hyderabad 6th Floor, B Wing, SmartWorks Coworking Space Pvt. Ltd. Purva Summit White Fields Hi Tech City, Madhapur Telangana 500081 +91 040 6825 0500 CONTACTS Varun Gupta Managing Director and Asia Pacific Leader Valuation Advisory Services Varun.Gupta@duffandphelps.com Aviral Jain Managing Director City Leader, New Delhi Aviral.Jain@duffandphelps.com OFFICES INSTITUTIONAL PARTNERS