New rules for China’s brand ambassadors

China’s preoccupation with celebrities has turned it into a media-mediated ‘Republic of Stardom’. The country is one of the top markets in the world for making heavy use of celebrities in advertising, trailing just behind star-crazed Korea and Japan, according to data from Millward Brown. 

Leading national celebrities often endorse more than 20 brands at once, to the point of being hugely over-exposed. The sheer diversity of the products that famous names like Jackie Chan or Louis Koo endorse — from milk powder to shampoos to electric bikes — result in media clutter and declining brand linkage. 

And these are not the most serious problems. Public interest groups claim that the use of celebrities in cases like Sanlu’s melamine milk powder scandal and the presence of banned-drug sibutramine in diet-pill, Qumei, constitutes false advertising.

In August this year, a revised amendment to China’s Advertisement Law submitted to the National People’s Congress Standing Committee, pushed for stricter regulations on celebrity endorsements. Legal liability will rest in part upon celebrities who parade products or services without personally trying them first. Celebrities have been sued in the past for misrepresentation, but their exact culpability has not been defined until this law.

However, as with other vaguely worded Chinese laws in the past, it is unclear how this new “truth in advertising” legislation would actually be enforced or how to prove celebrity endorsers are in fact bona fide users of the product.

Initial interpretation seems largely subjective, and experts Campaign Asia-Pacific spoke with expressed a variety of opinions. “As long as you don’t make a statement that publicly contradicts your endorsement, like saying you don’t drink alcohol if you shill Martell, it probably won’t be that big of a deal,” says Gia Cheng, partnerships director for sports and entertainment at Mailman Group. 

Still, the law could allow for brands to derive greater value in “sensible” celebrity endorsements, says Jason Spencer, managing director of Millward Brown Shanghai. “Celebrity endorsers need not be loyal fans of a product they are endorsing, but should be light users or at least be familiar with the product. For example, if a celebrity mother were to endorse an infant milk formula brand, she should at least have children of that age,” he said. 

Janie Ma, director of OgilvyEntertainment China, believes celebrities should be held even more accountable, and be required to do research, testing and evaluation of products before endorsing. 

Haidong Guan, executive planning director at Grey China, says some products will be impacted more than others, particularly trust-sensitive categories such as OTC drugs, health supplements and food. 

Being an authoritative culture, Chinese consumers tend to adore aspirational figures — a societal trait reminiscent of the worship of role-model heroes from China’s socialist past. The use of celebrities gets an advertisement extra attention and renders the brand more aspirational, but this also leads to the consequence of abuse. “Most advertising with celebrities are meant for short-term business returns rather than long-term brand-building,” says Guan. 

Chinese consumers, while increasingly seeking authenticity from brands, have fallen too easily for the lure of big-name stars without consideration of product relevance for too long, says Nancy Lan, head of Newcast China. 

The onus should be on the celebrity, says Marina Leung, managing director and chief branding officer for Cohn & Wolfe in Greater China. Celebrities should exercise more caution when signing endorsement deals and look beyond the endorsement fee, she says. “They should always maintain personal integrity and, more importantly, foster stronger legal awareness of the consequence of irresponsible endorsements.”

In reality, the law may be hard to enforce, but it is expected to set guidelines for the industry, in principle at least. Insiders are hopeful it will reduce the number of far-fetched product-associations, such as the case of male singer-actor Jiro Wang touting Freemore sanitary napkins. Chinese media reported that following criticism Wang defended the endorsement “because he has [female] family members using” the brand. 

Celebs in the West, by contrast, are gradually evolving beyond the crass exploitation of their popularity, with their reputations now intrinsically linked to their brand tie-ups. Ashton Kutcher, for example, not only fronts Lenovo ads, but also claims to be involved in product development. 

In China however, partnerships where a celebrity is so heavily invested in a product are not the norm. “Historically, many businesses have been lazy, opting to write a big cheque to secure a celebrity as their endorser,” says Fanstang CEO Adam Roseman. In some instances brands have overspent on celebrity face-value due to their marketing heads having strong personal affinity for particular celebrities that “inappropriately influenced their decisions”. 

One new endorsement model that is being accepted and reflects the growing sophistication of Chinese consumers, developing content that is organic to the brand that also features a celebrity. 

This model is substantially cheaper for brands as it eliminates long-term commitment to celebrities, and more receptive for consumers as they consume entertaining content in non-commercial formats, says Roseman. 

Moreover, digital has opened a new window of opportunity for brands, presenting a chance to involve artistic, business and cultural influencers into the endorsement mix. 

“Celebrity endorsers in China are no longer slogan-shouters, but also content creators with clearer relevance to brands who use their own social media platforms as channels for the brands’ messaging,” says Ma. “[Brand endorsement] will no longer be about good looks alone.”

Kai Ko’s market value fades away after drug scandal

When Taiwanese actor Kai Ko was arrested by the Beijing police force, along with Jackie Chan’s son, Jaycee Chan, for smoking marijuana in August this year, his core marketability index nose-dived from a rating of 68 to 55, according to data from Millward Brown’s CelebrityZ. The report is a celebrity value analysis aimed at helping advertisers and is based on a panel of 150,000 in China.

The scandal was a severe blow to the 23-year-old’s commercial value, which reached a peak in July 2014 when he rose to fame in the 2011 movie You Are the Apple of My Eye.

Ko had successfully built a personal image that was known for bravery, innocence and fun, writes Lucy Yu, group account director of new business at Kantar China.

His personal brand led to 19 brand sponsorship deals, across multiple product categories ranging from cosmetics to cars in recent years. Some of these brands include Rejoice, 7-Eleven, Stride, KFC, Johnson & Johnson, Adidas, Quaker, Master Kong, Levi’s, Maybelline, Nivea Men, Chevrolet, HSBC and Canon.

Press coverage about his fall from grace has been unrelenting and consumers have started to regard Ko as a negative role model, very likely because he was so well regarded, and looked up to by teenagers, prior to the incident. Even his abilities as an actor have been called into question.

Millward Brown further estimates that Ko’s role-model score dropped from 69 to 48, while his affinity score fell from 63 to 56 and talent score decreased from 68 to 61.

Consumers have turned away from the brands endorsed by the young actor  as they now view his personality as ‘dishonest’ and ‘hasty’. Furthermore, intention to purchase the products he has endorsed plummeted from 3.56 in 2012 to 2.96 points.

Our view: We expect to see more creative, mature and in-depth work from China’s brands in the new year. 

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