The role of the Licensing Agent

The key role of the agency is Brand Guardian. Whatever is going on in the market place, the agency has to have its finger on the pulse, making sure that it’s activity stays true to the brand’s DNA or brand story.

Key aspects of this role are passion and belief for the brand combined with entrepreneurial flair and commercial acumen and these are what Coyle maintains are the key attributes of a successful Licensing Agent.

He argues that there is no reason why an agent would be any less passionate about the brands they represent than a brand owner because “if you’re not excited about it you can’t sell it and you’re not interested in pitching for a brand you’re not excited about. So right from the moment when you think this could be a great opportunity for our agency, the passion has to be there.” This energy is maintained over time because there is constant change; within the marketplace, the brand’s development and corporate changes so there is never a dull moment. For example they represented Coca Cola 1993-2005. In 2003 Coca Cola made a decision not to market to kids so they had to pull the whole kids clothing range in the market place.

Passion and belief in a brand doesn’t make money for an agency or the licensees and retailers so an agent has to be commercial as well. The agent needs to look at the opportunity in the marketplace, in other words ‘how does that brand translate into products’? They need to develop products that retailers will want to buy because they believe consumers are demanding them. They have to be convinced that there is a demand for those products and that it can compete by having a

  • Good emotional connection

For example Tom Cruise is a great actor but would anyone want to buy Tom Cruise licensed product? Whereas Paris Hilton is a billion dollar brand and translates very easily into product because you know exactly what the clothes should look like, what the fragrance should smell like, what the shoes should look like, whereas others you’d wrack your brains all day long to see how that would translate.

Brand changes in direction or attitude can directly affect your licensing programme so it does behove you to be close to the brand, close to the people running the brand but also be very clear about how people perceive the brand in the marketplace. In the end that’s what really matters what consumers really think about the brand.

Beanstalk use Netvibes to give them a sense of what people are saying about their brands. You can see what people are blogging, what they’re saying; “it’s a fantastic tool.  We have to use social media to understand what consumers really think about the brand and it informs us when we’re thinking what sort of licensed product will work well”. Brand owners don’t always agree about what their brand means and the longer you spend with the brand the more you feel part of it .

  • Famous name

You need fame because it’s very difficult to license something that people haven’t heard of. Beanstalk expects it to be the high 70s in terms of unprompted awareness and high 80s prompted.

  • Operational readiness of the licensor

If the Licensor is not set up to do this, even if they have an agency, it’s chaos. If they’re not clear about the strategy in-house, if they don’t have clear sign-off procedures, if they’re not clear themselves as to how their brand should translate, then there is no progress.

  • Good relationship with the Licensor

Coyle gives us a helpful analogy. Imagine the ‘parent’ is the agent; the brand is the ‘child’. In some cases the brand wants to go to market with certain licensed products, but there may be a certain naiveté about that.  The agent may have to explain that it cannot compete commercially and because it can’t compete commercially they wouldn’t be able to find a licensee to do it. So if they still want to go ahead it would have to be as part of their marketing spend or promotional budget and they would have to own the inventory because it’s not a commercial proposition.

Over time when you build a relationship, assuming there are few personnel changes within the brand, the brand owner becomes educated about licensing and over time you build up trust and accept the advice as to what would work and be commercial. The brand might say they’re not motivated by money but want to enhance their brand and protect their trademarks but licensees and retailers are. Coyle believes that “It is about relationships, building trust and building understanding so the longer you work with a brand, the better those relationships will be.” Sometimes however, Licensors just want a change, due to a change in management perhaps and they want to bring in their own people. Sometimes there’s nowhere else you can go with a brand and they need to go elsewhere to develop it further.

  • Appropriate selection of Licensees

Licensees have got to be:

  1. Brand savvy and really understand the brand.

Getting the right product to market is key. It’s important to understand how licensing works and be able to design, manufacture and have an existing distribution network.

  1. They need to have integrity.

If you have to spend your time enforcing licensing agreements you’re missing the point about the nature of partnership.

  1. Financially secure

So run credit checks. You want the license to be a significant part of their business so you get their attention but not a major part of their business so there is too much risk associated with it.

  1. People who are experienced and can be creative where the brand allows it

In general Beanstalk errs on the side of not giving too much freedom in terms of images that can be used or quality of the product. However with their Andy Warhol license with its repeat prints eg Elvis, Campbell’s soups they allowed Licensees to play around with repeated patterns so they could give their interpretation. This was completely consistent with the brand.

  • Trademark registration to manufacture product

Lots of clients have been manufacturing in China without the necessary Trade Mark registration

  • Adaptation for local markets yet remain true to the DNA of the brand

Brands have an identifiable DNA or brand story and when you go to different markets there might be a slightly different brand story.  There might be a different emotional connection from the brand’s home market but there will be elements that are common. You have to understand what the common elements are and that’s what has to be in every product. However, there might be a different focus in each market; say apparel rather than toys or a focus on accessories rather than on apparel and it has to reflect what the consumer trends are in that market too.

Some product categories clearly require more adaptation such as apparel. US sizing is different to European sizing but it isn’t as simple as just changing the labels but it isn’t just about the sizing it is about the way it’s cut, they are cut differently for different styles and tastes. You’re not changing the inherent offering but you have to change the cut and sizing for a US product to work well in Europe. Then within Europe there are different sensibilities North and South because Scandinavians do not wear the same clothes as southern European. In China there are completely different sensibilities in the way the sizing, cut and colours work.

In fragrances a range needs to have 8-10 different ones because in the East they like a heavier fragrance to the West. In eyewear, face shapes are different all over the world and different frames are needed.

Beanstalk ensure they have local people in senior positions in each market.

  • The right retail outlet for the brand

Retailers are usually brands too. Tesco, Asda, Harvey Nicks, Harrods, Debenhams or John Lewis have brand qualities in their own right. They stand for the brands that they carry and their position in the marketplace. From the point of view of the agent’s brands it has to be consistent with their brand’s DNA and that will vary by category. It’s perfectly fine to have toys in a mass retailer like ToysRUs eg Jaguar die cast cars or radio control but if you’re looking at Jaguar clothing you would never have it in a Tesco or Asda or a mass market retailer because it’s not consistent with the brand.

When an agent is prospecting Licensees they should be interested in the existing licenses they have and where they sell. Most entertainment brands are mass market so marketing across the chain stores is not a problem in fact it’s highly desirable. However, brands that are not mass market need to work with licensees that are established and already have existing connections with the right retail distribution. That is particularly challenging in the UK where retail is so fragmented. Wherever the brand is sold it has to be consistent in that particular category with the DNA and the positioning of the core brand.

Agents approach retailers with the opportunity and have to persuade the retailer that they would be better with this brand than whatever brand is currently occupying the shelf space or show that this will sit very closely with it. No retailer is adding shelf space so they’re taking something out to put yours in so agents do presentations to retailers about their brands even though the supply to the retailer will be via their licensees. You have to show very clearly that they will make more money with this brand than they are with the current one.

Licensees are not going to take out licenses for something that is not going to make them money. It has to be better than other opportunities they’ve got on the go.

Key elements to consider as an agent

Time Lines

Coyle reminds us of how the development of a brand is ten times faster than it ever was

You need to be very current, aware of what’s trending in the marketplace, aware of timelines because it can take 3-6 months to sign a new client and another 12-18 months before product gets to market. You can have a great idea about a new product but you won’t see any revenue for 2 years so you have to make sure that the trend you identify is going to be the same trend in two years time especially for digital.

He explains, “How much can we do to affect 2011 today in terms of revenue? Next to nothing! 2012 is pretty much close to done. I’m well into 2013 and beyond in terms of where we should be as an agency and where the opportunities are, what’s trending well and what relationships we should be developing across Europe and Asia. We’re all looking at what the next big thing is. We have to make some bets, some assumptions and especially digital when you look at the speed of things. Digital in all its forms has to play a part in how we inform ourselves of what’s going on in the market. We use Netvibes to find out how our brands are perceived in the marketplace and we have to understand how consumers in the future will interact with brands and purchase goods and services.

Digital market

He compares how nowadays agents looked at the development of digital properties moving into the physical world whereas in the past they’ve looked at moving physical properties into the digital world like interactive games for example. Facebook and Twitter have built phenomenal brand and financial equity that other companies took 50 to 100 years to build although whether or not that could be leveraged into physical products depends on the nature of the property, certainly less easy  to imagine than Moshi Monsters.

Coyle advises, “We have to think of a very different world order in terms of what we now consider as brands and how they develop their equity in terms of the speed in which they do it and how they compete in the physical world. Are they just competing with other entertainment brands in the market place? Where does brand and entertainment meet for example? Is Hello Kitty now a brand or an entertainment property?”

Need entrepreurial skills and innovation as in any business because you’re taking a gambol you’re extending a brand into a new product area having to compete against very established players in that category you’re having to work to persuade potential licensees of the opportunity who in turn are taking a risk in terms of their investment so if you don’t have passion and belief you’re not going to move very far. It’s a bit different from an entertainment brand if you’ve got a blockbuster film like Cars 2 , Star Wars coming out it’s not much of a gambol. But celebrities and corporate brands that have not been tried and tested its much more entrepreneurial.

Essentially as an agent of the Licensor’s brand you should be considered an extension of the licensor and running a commercial agency you have to make sure that what you do is true to what you’ve promised and that it’s profitable from strategy through to collecting royalties.

Students of Marketing need to understand where Licensing fits within the Marketing Mix it gives you the opportunity to drive the customers brand through channels that they couldn’t otherwise get into for example if Land Rover gets into an interactive game they’ll be hitting a demographic of 18-24 year olds, the consumers of tomorrow.

It’s a way of driving revenue to fund other marketing opportunities

Builds brands by touching consumers in different ways through very innovative products

Why do so few people understand licensing if it’s this great thing that builds brands can reach new consumers can get you to places where your core brand can’t go and makes you money why isn’t everyone doing it?

This is an extract from ‘Secrets of Success in Brand Licensing’ and was an interview with Ciaran Coyle of Beanstalk. You can buy the book on Amazon UK or US or email me for your signed copy. judy@kidsresearch.co.uk

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