Celebrity is still king: how to negotiate with the ‘A – LIST’

Attaching an ‘A List’ celebrity to your brand or event is no longer the preserve of high-powered multinationals; it’s now an affordable and achievable option for Australian companies. An option that often bestows highly lucrative results. The key is understanding the negotiation, your business needs and your budget to partner with the right celebrity.

Why you should consider star power

With reality show contestants, social media influencers; athletes and socialites swelling the ranks along with the original musicians and movie stars, companies looking for a celebrity
endorsement now have a wide range to choose from. While some celebrities can still charge astronomical fees, others are within reach of even small businesses.

In fact, one in five adverts globally now features a celebrity and Australia is fast becoming one of the most attractive destinations for international endorsements. With Channel Nine’s hit show The Voice returning for its seventh season, American giant CBS’s acquisition of Network Ten, and the Commonwealth Games taking place in the Gold Coast, the commercial potential is ripe.

The Voice judge Kelly Rowland is one big international star seeing value in Aussie audiences

This potential places talent under more pressure than ever to work across platforms to cultivate their audience, and although our audience is boutique, it packs an international punch. Consider rock star ‘Pink’, she undoubtedly would never have reached such heights in her career without the connection that flourished with her Australian fans.

Lastly, consumers are still seduced by celebrity, perhaps more now than ever. For many people, film and TV stars, athletes, pop stars, the royal family, chefs and business tycoons all serve as arbiters of taste. Thus, impacting buying behaviour, so with plenty of disruption in the industry, now is the time to beckon a bigger conversation.

CEA founder Damian Costin says brand fit is important for endorsements

These bigger conversations don’t necessarily mean the bigger bucks. Damian Costin, Co-Executive Director of Creative Entertainment Agency (CEA), says Australian companies are ready:

We all know talent grabs and holds consumer attention. It’s just knowing how to leverage that influence in the best possible way”.

Costin, who has been at the forefront of the Australian music scene for the last five years with the 123 Agency, has created some simple rules of engagement to guide marketers through the process: “When engaging with talent there are six things all companies should consider; credibility, global appeal, personality, uniform power, consistency and last but certainly not least brand fit”.

Working out who works for which brand is no small deed and shouldn’t be miscalculated. Your chosen talent should align with company values, company culture and connect with
your target audience.

Actress Charlize Theron’s endorsed Capitol Grand

The argument is that the attributes of the celebrity can transfer to a brand or a product while the endorsement exists. Such borrowed equity can provide the boost a company needs to kick-start its launch, reveal, or repositioning of its product, helping it to enter the market with immediate brand value.

The negotiation

While negotiation is hardly a new concept, partnerships with celebrity have evolved. It’s no longer just endorsement, it’s brand empires like Jaime Oliver and Oprah Winfrey, celebrity-branded products, brand collaborations, endorsing products on social media, licensing names, promoting charitable causes and an old favourite, assuming a company title.

Profiles will fall into different categories according to their brand power, and each category has its own pricing structure. You can expect fees to start at $5,000 for a reality TV star posting on social media, while a celebrity chef may command $50,000 for a brand endorsement.

CEA’s Lilit Chakman says while there is no magic bullet in negotiations there are simple rules to use

Lilit Chakman, Co-Executive Director of the newly launched CEA has spoken of the critical disparities that can derail a negotiation before it’s even had a chance to be considered.

Working with International talent is complex, there are things to consider such as opportunity cost, exclusivity, and understanding not only the talent’s current role in the
market but also their emerging role which can create layered negotiations – not to mention the eccentricities of certain personalities.”

Lilit insists that each negotiation will be different and that it’s near impossible to create a rulebook. Some points to consider however are outlined below:

  1. Opportunity cost and exclusivity: There’s often a misconception that talent is paid for the hours they work. This could not be further from the truth. Whilst this is one component of a commercial deal, another, is the
    exclusivity they provide over their intellectual property for a given period and across a particular territory.
  2. Appearance hours: There are service hours and then there is the time in preparation, rehearsals, travel, publicity etc. and each talent and artist has a different methodology as to their process. This is what makes them unique, which will be reflected in their fee.
  3. Intellectual property and the intangibles: Brands in effect pay for and use talent’s intangible rights. This is where it gets complicated. These rights can only be measured, quantified and quoted on a case by case basis but a
    company that has long-standing relationships with your talent will ultimately have their finger on the pulse when assessing the intangibles.
  4. Extras: i.e. styling, per diems, transfers, accommodation, and entourage. The key is getting this right for both the brand and the talent upfront. If left to talent expectations alone, these may be out of balance and blow budgets for brands.
  5. Cultural expectations: Understanding and appreciating the potential cultural differences will be of vital importance
    to your negotiation. Do your research.
Why it works

Celebrity endorsement is one of the most popular forms of marketing in Australia and the potential effect on product sale cannot be underestimated. According to a Market Watch claim, just one endorsement can see an increase in sales by 4%, almost immediately.

So, make it meaningful, view your talent as a business stakeholder, form a relationship that will incentivise and inspire both sides. “Great ideas will always win,” says Costin. “But a great idea with the right talent attached to it will have a higher impact.”

With such rapidly developing globalisation in the entertainment industry, it’s impossible to predict exactly how these negotiations will evolve and Chakman insists: “When it gets to complex matters, you will eventually need to bring in the expertise.”

What is certain, however, is that those companies harnessing relationships with world-class talent will find the ride challenging but ultimately profitable. Undoubtedly, this is going to be big business in Australia in 2018.

SPONSORED CONTENT FROM Creative Entertainment Agency

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