At Tesco's

Just got back from shopping at Tesco's for the first time in ages. Can't believe the power of private label. It's almost 10 minutes before you can see any other brand apart from the retail superpower. In fact, tesco's home produce sections are almost the only unbranded sections left on the planet. Amazing how things change. No wonder retailers are so keen to start with fresh produce!

How did we let ourselves be sucked into this vortex of reduced choice? Instead of more brands on the shelves there are less and less. How can we have real choice if own brand is super-dominant? It seems to me as if brands stand for less and less in this day and age. Whereas there used to be things like a carefully managed brand vision, with some sort of raison d'etre, we're now in an age where a brand only exists to generate cash and fleece the public. if it does succeed in standing for something then someone (usually a fund) comes in and buys the owners out for £30M... I had a meeting today with one family run company who have resisted something like 161 takeover offers they don't sell because they're located in a remote corner of the UK and if they did sell, their 8,500 employees would be fired, destroying the local economy they sustain.

Branding used to have a noble purpose as well as generating income. Clearly, these days it's only a rare minority that can resist the temptation to stand for nothing beyond making a healthy profit or being bought out by a private equity firm.

Exclusively brands, exclusively postponed

Can't believe that dark forces within the industry have forced Andrew Levy's Exclusively Brands to postpone. It's a shame when more established players conspire to keep innovation and energy from impinging on their market share with sheer muscle. This is exactly the sort of behaviour the supermarkets are criticised for.....

another idea

This business and this industry is about to break through to another level. Part of the reason, as we said at our talk in October, is the growth of private label which makes supermarkets into godzilla sized mega-licensors. As a supermarket you can 'license' out your brand onto anything. Tesco finest is on around 800 product all of which are guaranteed distribution and, with very little need for marketing, deliver quality that is comparable to the best branded competitor. Not only that but the market information Tesco gets from all its branded and unbranded suppliers is enough to tell it how and where to innovate. Talk about licensor heaven!

The only way for existing brands to compete is:
1) ask the customer where and how your brand should be extended
2) specify in as much detail the potential new product
3) seek out like minded licensees prepared to take on private label
4) develop and market the new product's point of difference
5) develop existing and create new licensed products that maintain the differentiator

in other words manage the licensing programme as if it was your NPD programme and market the brand in the same way.

what's your wait?

Not that I'm not busy but waiting for a response When you make someone wait for an answer, it is like leaving them in the dark on a suspension bridge, wearing wet sandals, blindfold.

quotes, quotes, nothing but quotes

It seems to be the time of year when every man and his dog is thinking about licensing. If it isn't one company it's another looking for a quote to develop a licensing strategy. The quote is urgently required and then, like a huge lead weight, seems to sit on the bottom of the pile while other things (brand related) take precedent. In the last 8 days we've quoted out the same amount in turnover that we did in the last 12 months! The silence between quote and order is the most pregnant of pauses.....

brand licensing show goss

brand licensing show was notable for 2 things. Beanstalk taken over by Omnicom and TLC picking up Reckitt Benckiser. Other than that the show held few attractions for anyone looking to work on the branded side of the business. Bring on Exclusively Brands at the Landmark.

Met some Danish Fund Managers looking to break into licensing (get your lycra on boys, the canon's ready)
Met my cleaning co, looking for cleaning brands and heard that the french sock team were in town.

Simone presented the results of our research into the growth of private label. You can see the summary of her talk here but basically:

81% of the UK accept private label instead of brands
UK is the biggest market for private label
If you're going to license your brand do it now. If you don't private label will invade your space
If your going into a new category, innovate or don't bother

some key concepts

Some of the most basic concepts to remember when doing a licensing deal:

1) FIT & LEVERAGE

Make sure that not only does the new product fit within the compass of the core brand but it also leverages the brand in the new category

2) LICENSEES DON'T OFTEN UNDERSTAND MARKETING

That's why they're licensees... duh!

3) YOU CAN'T WIN'EM ALL

Whilst it would be great if all of your fantastically developed concepts flew off the shelves. Everyone gets it wrong. Any licensing deal is a triumph of persistence and deserves credit for taking the brand into a new category

4) MARKET RESEARCH

Nobody I've come across seems to value the role market research in new product development. I'm not saying that it's a way of making decisions but it would be nice if someone acknowledged the role of the final consumer from time to time.

5) COLLECTING ROYALTY SHOULD BE EASY

The last thing you want to be doing is chasing royalty. Get it in advance and credit it back!

products in search of a brand....

There's nothing worse than finding a great potential product category with no brand to match it. It's like playing that card game pairs when you turn over a card and are supposed to remember where you put the matching one. There's nothing worse than finding one half of the partnership ready to go, only for the other side to wander off into the distance. Currently I have :

one half of a sock deal looking for a sports brand
one half of a child security deal looking for a lock brand
one half of a cleaning deal looking for a cleaning products brand
one half of a battery deal looking for a battery brand
one half of a sweet deal, looking for an entertainment property

If you know any brands looking for an extra £100,000 please get in touch...

looks like market growth isn't all it's cracked up to be

The downside of market growth is that there's competition. Recently reluctantly pitched a large multinational who I'd already told I wasn't prepared to represent, only to have my hopes raised and then dashed. Worse of all the multinational has just acquired 3 new brands.

another paper of the week

Well, it almost seems too easy but we're paper of the week on brandchannel again. Simone and I are very happy and are now working on the development of a presentation based on the concepts that we found during our research. our paper

most essential qualities in a brand licensing consultant

1) patience
2) tenacity
3) persistence
4) integrity
5) connectivity
6) resilience
7) personable
8) focus
9) vision
10)knowledge

paper finished

New paper finished. Retail Space Invaders puts the case that private label is forcing brandowners to develop licensing strategies. Hopefully soon to be appearing in a publication near you.

new paper coming

Got a new paper coming up about the menace of own brand and how it's invading the world.....

welcome to buffersville...

Some people work out of London. They have their office in buffersville. I imagine it as a cosy place where people bring them regular cups of tea, and birds twitter from the treetops. Every so often, these gentle folk venture down to London and, in a desperate bid to make themselves feel important, do their damnedest to fill up their big day with busy little meetings with people who haven't got the slightest reason to meet them.

Every time I fall victim I instantly vow never to be caught out again, but, I am sad to report that I was recently caught up in the wake of the buffersville express. I traipsed across town for a meeting with someone who told me something that 'he couldn't possibly tell me on the phone', specifically, 'we're not quite ready yet!' Never again!

A good day to be stuck in Newcastle....

This morning I set off with a large dose of London pride, still feeling that the afterglow of winning the Olympic bid would sustain a revolution that London badly needs. As a city, London suffers from an infrastructure that is out of date and not worthy of a major international metropolis. Today, though, I'm stuck in Newcastle having had an 'interesting' meeting that started at 11 and finished around 4 during which the results of today's atrocity filtered through as people starting texting me to ask where I was. With an office in Old St... an area that is triangulated by three of the attack sites (Moorgate, Kings Cross and Liverpool St) it's not surprising that I feel shocked, devastated, and just exhausted with emotion. Over the last three day's we've had Live8, the Olympic Bid and now these terrorist attacks. It's as if each party in turn is desperate to sieze the agenda. Who's next. We've gone from peaceful semi-altruistic pop-concerts, to the 'noble' spirit of the Olympics and a democratic process and now back to the reptilian part of the brain that grabs our attention by the throat.

Somehow we stumbled through our meeting.....

Independence Day

Note the date, 4th July, it's finally official. Corporate brand licensing has arrived in the UK. One recent 'brand-damager' at one of the big FMCG manufacturers I spoke to has already appointed a licensing agency to do merchandising! That hasn't happened once in the past 3 years.

Time to tap into the phenomenon known as 'market growth'!

interesting detail

one side affect of having worked in this business for three years is the tendency to start developing outspoken opinions. Now that I've changed from energetic, boyish, youthful exuberance to cynical, jaundiced, wizened professional, my opinions often overcome my ability to withhold them. For example, one of the stands at the licensing show actually featured real product on them. Now forgive me for being outspoken about this but when a corporate brand is looking to generate interest from potential licensees, the unwritten rule is to show the logo (because if it's licensable everyone should instantly know what the brand stands for) and an image that suggests how broad the brand's ultimate footprint could be. This particular stand actually had someone doing the rounds of the show as a can of disinfectant! Admittedly this approach is less po-faced than most corporate brand owners (particularly those whose logos noone's ever heard of) and potentially presented the interesting implication that even core products are seen by the consumer as just another licensee, but purlease, as the new yorker's would say.

back from NYC

Well, another trip to New York another dollar.... a frenzy of meetings and discussions. It's always difficult to remember exactly what was said and to separate out the feeling of hype from the reality of the opportunities presented. One thing's for sure however, the corporate side of the licensing business is growing.

Given the need for manufacturers for licenses that last longer, and the need for brandowners to maintain the continuity of their brand message throughout a continually amalgamating market, this is no surprise.

More later, still slightly jet-lagged

waste of time and money?

If you were to do cost up the value of advertising done by companies who had no idea of the reason, message, or value of their advertisements, the numbers would be astronomical.... why do so many companies focus on what rather than why? It's the busy stupid people who get the most done on this planet because we're taught that actions are worth more than words. The real lesson needs to be that words without actions are worthless... and there's no point advertising until there's something to say that can be followed up with action.

rather like a marriage

They say that women marry expecting to change their future husbands and men marry expecting their future wives not to change. The balance in any relationship changes after it has been formally negotiated and put down in writing. From my experience, the process of negotiation can actually be the moment that the relationship breaks down so that immediately the minute the contract is finalised both parties do everything they can to get out of the agreement.

Licensing agreements offer a similar tipping point. At the beginning the brand owner has all the leverage as he chooses a suitable partner from (potentially) a wide range of interested partners. Gathering financial, legal, and market sensitive information as the poor licensee jumps through the hoops on the way to securing the license.

Once the license is signed everything changes. The leverage is all with the licensee. Missed annual minimums by £20,000? We'll catch up next year. Distribution slightly out of whack with the initial vision? Oh well, at least royalties are up. Want to know more about our manufacturing? Sure, just hold on a second will you....

The only guarantee of matrimonial bliss is to find a partner who shares your common values and is prepared to invest in the long term harmony of the relationship. The last thing you want is to spend your life bickering about who gets custody of the children. (maybe this analogy has gone too far....)

now they're all at it...

So 2 years after this business launched, it appears that the corporate brandowners are finally waking up to the potential of licensing to generate serious revenue and brand equity.

Harpic's owner Reckitt Benckiser recently hired the ex-head of licensing for Sesame St. which makes you think that they've developed a business function for licensing , although from what I understood in a recent conversation with the ex-head of licensing for Kellogg's winning internal support for licensing initiatives is the hardest part of the job. Not really that surprising when you think that all resources are devoted to increasing market share and profit, not supporting licensees.

Brandowners are happy to take the revenue from licensing but loathe to support licensees but they're also desperate to maintain competitive advantage so perhaps the tide is turning.

The best laid plans

It's nearly three years ago that I started this business and, when I look back, the learning curve seems steep and rocky... the best analogy for my approach to learning about licensing is that each day I'd don my leotard, climb into my cannon and fire myself against a brick wall. Eventually something had to give. I'm still here.

The plan for the first three years was something like:

1) learn about licensing
2) sign licensing deals
3) represent significant brands
oh and in a very special fourth place) generate enough revenue to survive....

With these achieved, it's time to set some new goals. Interesting how our goals govern our behaviour. Deferment of gratification is supposed to be a sign of intelligence and discipline but, I wonder, isn't it time for some instant gratification? Brand licensing agencies are masochistically addicted to deferred gratification, our patience knows no bounds. The pipe dream of long term royalties whilst we sit back and count the money sustains us almost as effectively as real income....

The next three years ending June 2008.... would have to involve scaling up the business, but in my experience you've got to be careful what you wish for....

paper of the week

Although shouldn't really blow own trumpet, but am keen to let it be known that brand channel (www.brandchannel.com) have made my latest article paper of the week. If I can't let it be known here in my private unread diary, then where can I brag?

when it all works out beautifully

The most recently completed licensing deal we've worked on took 6 weeks from initial proposal to signed contract. There were at least 3 agencies involved between the manufacturer and the brandowner and the contract took 8 days to prepare. When a brandowner with a powerful brand understands licensing and has prepared a streamlined process with well identified target categories, the turnaround can be impressive.

typical?

Typical virgin licensor behaviour is to welcome an approach from a brand licensing agency. It's flattering and intellectually stimulating to consider how their brand would appear in other sectors.

Then, when a large licensing deal hoves into view and people start to take a bit of an interest, the brand manager's attitude miraculously changes. At this point there's a sudden resentment that the agency should want such a large chunk of royalty - surprisingly sudden considering that up till that point it was a percentage of nothing - and every effort is made to avoid signing a long-term contract. Finally, after a protracted negotiation punctuated by long silences for various holidays and other more important work - a ridiculously low share of royalty might be agreed with a cap, no expenses and no fee. If this is agreed then suddenly the licensing agency has its work cut out to deliver huge royalties or be stripped of the account and have the whole thing managed in house.

I suppose the brand manager sees an upstart company with ideas above its station and wants to retain control, but even so the typical treatment of the licensing agency hardly augurs well for the typical treatment of new licensees.

Brand Licensing

Just been invited onto the advisory panel for this year's brand licensing conference so must be doing something right. A bit of a jolly and a free lunch. Went to see Pentland today, very impressive offices... table footballs, pool tables etc. The sort of place I can imagine people get very intense about the meaning of certain sports brands....

Last Minute Culture?

We live in a last minute, opt-out culture. Don't want to meet up with friends because you've got something better to do? Call and cancel, last minute. Leave all of your options open because something better might come along and when it does mass-communicate your change of heart in the blink of an eye.

Translate this to a professional setting and the pernicious effects of last minute culture translate into: noone listening at meetings because things will get mopped afterwards via email, a large number of first drafts sten-gunned out before any real thinking's been done, the finishing process getting later and later in the project development path.

Isn't it time for a 'First Time' movement featuring a manifesto of:

Thou shalt not send any internal emails
Thou shalt prepare a first draft that is as good as possible
Thou shalt schedule meetings and not cancel them
Thou shalt prepare project plans and carry them out

more to follow, this is only a first draft....

The power of community

Word of mouth is an interesting phenomenon. Although the internet is a close second, there's no substitute for a friend's recommendation that a certain school offers excellent tuition or any other supplier for that matter. Similarly, the brand licensing industry depends on word of mouth to underwrite the reputation of licensees and licensors.

Once a licensee has a bad name - for not paying royalties, for example - word spreads quickly from the licensor via agents through to the agent's contacts. Obviously licensing newbies don't know who to ask for a referral but once you're in the know you become a stakeholder in the reputation network and, as long as your own reputation stands up, your opinion can make or break a deal. Such is the responsibility of being a brand licensing consultant...

Money for nothing....

Because many agencies only charge fees as a percentage share of royalty generated, it is tempting for brandowners to use licensing consultancies as a cheap way to investigate licensing opportunities. As Kirk Martensen points out in his paper on Licensing Dyslexia, there are many other factors to be taken into account when measuring a licensing strategy, and the worst licensing deals achieve high profile, huge royalties but bad fit with the brand's values. See paper on this....

The agency's goals must be aligned with brand fit as well as revenue generation to avoid the motivation to adopt a short-term mentality on both sides. Licensing agencies/consultancies need to think long-term to achieve brand fit ie: planning a brand licensing strategy, researching target markets, talking to key players and gathering and co-ordinating the flow of information between the brandowner and targeted licensees.

An initial investment from the brandowner shows commitment to a long-term licensing strategy, aligning the agency with the brand, and recognises the value of the agency's initial costs and strategic input. That's my argument and I'm sticking to it!

Sudden Delays

It always surprises me when a conversation goes suddenly quiet. For example, I've recently been in the thick of negotiations on a potential deal when suddenly there was a deafening silence from the other side. It turns out my correspondent had booked two weeks holiday. Can you imagine if domestic life mirrored the business world:
“Honey, would you put the rubbish out?”
(Silence for two weeks)
“Honey where were you?”
“Oh, I went away for two weeks. Shall I put the rubbish out?”

On Valentine's Day make a match...

The interesting thing about being in the middle between brand owners and manufacturers is trying to find brands and licensees with matching promiscuity.... I suppose in some weird way that makes me a dating consultant?

The reason that few companies have a brand licensing strategy is that once the wrong licensing mentality has taken hold of a brand, it can lead to a slow death. Big fashion brands like Paco Rabanne and Yves Sant Laurent used to be the worst offenders (I remember an Yves Sant Laurent that was so poorly made it actually burnt my nipples). Like a lot of previously over-licensed brands, YSL’s owners are now attempting to reinvigorate the brand by killing off licenses and restablishing a high quality mentality. One thing’s for sure, at some point in the process the company stopped looking at licensing as anything other than the chance to make a quick buck. The reality is that licensing requires as stringent a new product development process as any other brand extension.

Licensees are no better! A typical new product development process is to identify a gap in market or some new technology that gives a competitive advantage, design a suitable product, market research the product, develop a marketing plan, market research the marketing plan and then execute a sales & marketing strategy. The majority of licensees circumvent this process by sourcing a product, looking at brands they'd like to license, attempting to license in a brand and, if this attempt is successful, adding the new brand to their existing product and relying on the product’s new design to convince retail buyers and consumers that there is a market opportunity.

The difficult role of the dating consultant is to convince both sides to make the necessary effort to make the other party feel valued. Given that we're paid on results it's tempting to advise our clients to take on every deal possible, however, the only way to gain credibility is to be honest. We've all seen what happens when a licensee just slaps a logo on something- it's no fun and the money's no good - so my advice, for what it's worth, is stay chaste and keep waiting for Mr Right, even if I get nothing for saying this (at least I don't have to be the one chasing down the bad date who abused my client and didn't even pay for the privilege). Choosing the wrong partner leads to tears before bed-time.

Hello and welcome

Hi there,

welcome to my attempt to chronicle the growing pains of a new business. Well, when I say new I mean 2 years old, but it still feels new to me. This blog is intended to be a collection of thoughts and ideas about branding, brand licensing and what it means to be a brand licensing consultant. I hope that you find it interesting and stimulating. Personally I look forward to consulting this blog in about 3 years time and laughing my socks off at the naiivety it contains and regretting not actioning the things that turn out, with hindsight, to have been just the thing to do. Anyway, enough pre-amble and on with the blog...