Lin Dan admitted to cheating! Brands are all thinking, who should be the next spokesperson?

Lin Dan cheated on his wife, and many people are waiting. How will the cooperating brands respond? And brands are thinking, how to choose spokespersons?

Yesterday afternoon, Lin Dan admitted to cheating.

There is no doubt that Lin Dan will face huge losses in commercial endorsements. It is reported that two expected sponsors have halted Lin Dan's projects, while brand sponsors that Lin Dan is currently endorsing, such as Yonex, have not yet made any statement.

Since 2006, Lin Dan has been successful in major competitions and his income has soared. Most of his income comes from advertising. The income from advertising endorsements for Gillette, Red Bull, Citroën and other commercial activities accounts for more than 90% of Lin Dan's total annual income. According to the Forbes China Celebrity Income List, Lin Dan's income in 2015 was 27.5 million yuan.

According to information, "Super Dan" has a wide range of commercial endorsements, including Red Bull, Li Ning, Citroen Sega, Wrigley, Pepsi, 361 Degrees, L'Oreal, Snow Beer, KFC, China, Golden Dragon Fish, Gillette Razors, Gatorade, Freddy Automobile , Yili, Tsingtao Beer, FedEx, Intel, etc.

On January 7, 2015, he signed a personal contract with sports brand YONEX. It is reported that the endorsement fee reached a nine-digit high.

Currently, Lin Dan's endorsements include YONEX, Oakley, MONTBLANC, etc. Sina Entertainment called Yonex China and the staff said: "We have no response. This involves personal privacy issues." When asked again whether it was the company's unified statement of no response, the staff also gave an affirmative answer. Dongfeng Nissan and Oakley did not answer the phone yet. Montblanc said it was waiting for notification from its head office.

"How much damage can tainted celebrities do to a brand?"

From the perspective of a brand company, choosing a celebrity as a spokesperson is a gamble. Because, with the rapid updating of information caused by the Internet and new media , a star's image can change in the blink of an eye.

In June, Lancôme wanted to organize a concert for Denise Ho, a unique singer from Hong Kong, to expand its Hong Kong market. Unexpectedly, because Denise Ho showed a tendency towards Hong Kong independence, it caused an uproar, Lancome suffered heavy losses, and its parent company L'Oreal Group also suffered a loss of 18.5 billion yuan.

According to the West China Metropolis Daily, the drug abuse incident caused losses of tens of billions of yuan to the brand manufacturers endorsed by Ko Chen-tung. Ko Chen-tung himself directly loses nearly 50 million in advertising fees each year.

Zhang Yixing and Ma Yili, who were once a model loving couple, jointly endorsed a sportswear brand and a shopping website. It is said that the sportswear brand chose the two because their image as a couple fits its brand appeal. However, once the cheating scandal was exposed, Wen Zhang's image as a good man collapsed, and their reputation as a model couple was gone forever. Veteran artist promoter Mumu said that for couples like Wang Xingren and Ma Yili, who form a community of interests bound together by a husband and wife relationship, there are usually additional clauses when they endorse something together, and they must make corresponding compensation if the image of the couple is damaged. Generally speaking, the higher the endorsement fee, the more detailed the additional terms will be, and the corresponding compensation amount will be higher. However, there is a legal bottom line, which is that the maximum amount of liquidated damages cannot exceed 20% of the total contract price.

Ms. Yang, who once worked in legal affairs at a large e-commerce company, believes that endorsements between brands and celebrities are a confrontation of power between the two sides. The amount of liquidated damages depends on the strength of both parties. A popular first-tier celebrity, many brands are chasing after him to sign endorsements. At this time, the celebrity is the powerful party. "You set a penalty clause, I don't agree, and I won't sign unless you delete this clause." On the one hand, the e-commerce company wants to accommodate the celebrity, and on the other hand, considering that the possibility of something happening to a big-name celebrity is not high, it directly deletes the additional penalty clause.

Ms. Yang said that the latest problem now is that the new advertising law, which came into effect on September 1, has added content that celebrities will be held accountable for endorsing false advertisements. Once compensation occurs, the endorsing celebrity needs to bear joint and several liability. Even if the company and the star agree that the money the star pays in compensation can be returned by the company, this will greatly damage the star's image and may even prevent the star from receiving new advertisements.

"How should brands respond when a celebrity is exposed in a scandal?"

When celebrities get into scandals, it is undoubtedly a nightmare for the companies that signed them as spokespersons.

In March this year, five-time Grand Slam champion Maria Sharapova held a press conference and admitted that she had taken banned drugs. Immediately following the press conference came termination statements from three major companies: Nike, TAG Heuer and Porsche. These statements were all released within 24 hours of the press conference, even long before Sharapova was banned for two years by the International Tennis Federation.

In fact, if you want to avoid losses, it is best to predict and prevent risks in advance.

It is understood that many companies will conduct detailed background checks on celebrity spokespersons before choosing them. Celebrities represent the image of the company to a certain extent, so companies are generally very cautious in their choices.

Song Qinghui, a well-known independent economist and financial commentator, told China Business News that from a professional perspective, before selecting a spokesperson, companies need to conduct risk assessments from three aspects:

First, whether the brand spokesperson has a certain degree of fit with the company's business or main products. The higher the fit, the more commercial value it has, which means it is likely to cause a higher communication effect. Otherwise, the endorsement risk is greater.

Secondly, whether the spokesperson has had any relevant sensitive news before endorsing the product, if so, it needs to be treated with caution. At the same time, we should pay attention to preventing the risk of negative news about spokespersons in the future. The more negative or sensitive news about the spokesperson himself is exposed by the media, the commercial value of the company being endorsed will be easily damaged, or even counterproductive.

Third, whether the spokesperson has any behavior in the past that touches the bottom line of morality and law, so it is very necessary to conduct a background check on the spokesperson.

"The specific content of the contracts signed between different companies and spokespersons will vary. However, based on what we know so far, many domestic companies do not impose much punishment on celebrities for breach of contract. Foreign companies, such as Adidas and Nike, are relatively mature and use legal clauses to restrict celebrities and clarify inappropriate behavior," Song Qinghui explained.

However, even if companies have a strict risk assessment process before looking for a celebrity endorsement, there are still uncontrollable risks regarding the celebrity’s own behavior. "No research organization can pry into all the privacy of celebrities. In other words, there was nothing wrong with their behavior when they were endorsing products, but they behaved inappropriately after the endorsement. Obviously, this is unpredictable. However, some companies tend to choose female stars under the same conditions, and male stars may be more likely to be involved," said an industry insider.

Once a spokesperson is caught up in negative news, the legal department and market assessment department of the company being endorsed need to make an assessment in the shortest possible time and take decisive measures.

Song Qinghui said that once the spokesperson himself is caught up in negative news, the legal department and market assessment department of the company being endorsed need to make an assessment in the shortest possible time, and decisively temporarily suspend or terminate the contract with the spokesperson, and promptly clarify the facts to the news media to avoid excessive speculation among the public. If there are advertisements endorsed by the brand in the media, they must be removed in a timely manner to restore the damaged brand image as much as possible. Even if you are eventually proven innocent, you cannot wait until the truth comes out. Terminating the cooperation is the wisest option. Otherwise, it will only have a negative impact on the company's brand over time.

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