Brands are rethinking the risks of celebrity endorsements following the recent controversies.
Lately, the actor Kim Seon Ho has been in the center of attention. Kim Seon Ho issued an official apology via his label Salt Entertainment for the controversy surrounding his relationship with his ex-girlfriend, however, the rumors have yet to subside. The only thing that seems to have concluded is Kim Seon Ho's career trajectory. Films, variety shows, and brands dropped him in the face of the controversy.
Especially the corporates who need to act swiftly regarding changing consumers' preferences are the quickest to respond with cutting ties with its endorsement models in the face of the controversy.
For instance, in the last episode of 'Hometown Cha Cha Cha', Kim Seon Ho orders Domino's Pizza as part of his product placement. Viewers could bear with this awkward scene thanks to their support and trust in the actor himself, however, Domino's was the first to drop him once the controversy sparked.
The insiders say the brand endorsement deals come first in their minds whenever there is a celebrity scandal. One of the insiders confided, "As celebrities' contracts get more expensive, our priority became resolving breach in the contract with the brands due to the high amount of liquidated damages. The compensating clause is generally included in the contract, so it takes time before we publish any announcement."
He continued, "Recently, there are many cases where the consumers directly complain to the corporate regarding its celebrity endorser. As the label's response gets delayed, it's not uncommon to see the corporate respond first. Sometimes this leads to the general public believing the accusations are in fact true."
From the corporate perspective, they are reevaluating 'celebrity risks' because a celebrity's private life isn't always open to their label let alone the brand. As a result, some came up with the idea of using computer-generated models in their advertisement campaigns.
However, it's hard for companies to ignore the fandom power that is directly linked to the sales and the celebrity's influence on their brand image. It seems the trend of using celebrity endorsements will continue along with the increasing risks due to the advance of the Internet and cancel culture.