The power of a union

Brand licensing has grown up and is now big business for corporate brands, celebrities and sport. But consumers won’t be fooled by hastily put-together or ill-fitting partnerships. By Nathalie Kilby

If asked to think of brand licensing, most people’s thoughts would turn to children’s and character entertainment licensing or feature
films. While such licensing will continue to thrive, according to Licensingpages, the core areas of growth over the past few years have involved corporate brands and trademarks, art, celebrity and sports licensing.

“We see further growth coming from the adult, corporate and non-character entertainment sector. Many blue-chip and other well-known everyday brands that consumers trust have the ability to use licensing to extend into other categories, adding new dimensions to their brands, extending their relationship with consumers and adding value to their bottom line. Licensing can provide this without significant investment and is therefore a marketing tool they should consider,” says Licensingpages marketing director Sam Eykyn,marriage moneyin the UK, brand licensing is worth about £7bn at retail and £368m in royalties (Licensingpages, LIMA and EPM). The benefits of brand licensing are obvious: by broadening the range of branded merchandise available, a brand is increasing its market presence and therefore consumer awareness, as well as creating further revenue streams and gaining entry into previously inaccessible markets. But brand owners need to be aware of the potential pitfalls: namely,slapping a brand on products that do not fit with a brand’s core values.

Jackie Lynch, sales and marketing at Chorion, owner of the rights to children’s character Noddy, says: “It is essential to license
properties in a way that suits the brand. There is no point in licensing a product that doesn’t speak with the brand.”
Recent reports that London’s Metropolitan Police is licensing its brand for products (MW September 29) such as salt and pepper shakers are a case in point. The proposals have been met with derision and bewilderment, with Marketing Society chief executive Hugh Burkitt saying it is “a marketing idea stretched too far”.However, William Grobel, consultant at Intangible Business, an
independent brand valuation company, says: “Whether companies can extend their brands too far is debatable. Pierre Cardin is a good example: he is often criticised for extending his brand too far through licensing. His brand is seen on everything from shirts to
frying pans. However, Cardin has said he would be happy to put his name on toilet paper if he thought it would generate revenue. Pierre Cardin is still an immensely profitable brand despite these criticisms. If the brand still generates profit, maybe it can never go too far because profit, after all, is why brands license.”

Don’t look now

Yet one thing everyone in the industry agrees on is that the key to success is ensuring brand longevity. “A long-term vision is essential to keep the momentum of a licence going,” says Vivid Imaginations marketing director Emma Sherski. “You need to invest heavily in the launch and first year of a licence to help create the standout and uniqueness of the property.” And she says that once a brand is licensed, owners need to ensure that “the product range is constantly refreshed and innovative and true to that licence”.With licensing around feature films, such long-termism may not be necessary as the window of opportunity is small. Getting products out as quickly and efficiently as possible is essential if licensees are to get a good return on investment for film-related merchandise. Two forthcoming films, King Kong and The Chronicles of Narnia: The Lion, The Witch and the Wardrobe, have spawned a plethora of licensed products, from video-games to costumes. Licensors and licensees will have had to work closely together to ensure that products get to market at a time that benefits all.

Disney Pictures is the company behind the Narnia film. Disney has been actively reorganising how it handles its licensing business. Disney Consumer Products vice-president for home Daniel Ifcher says: “We are seeing a renaissance of our licensing business. We have transformed ourselves into an active licensing organisation, managing brands rather than licences and adding value for our partners.”Ifcher says that licensed products need to meet consumer needs and complement or match the core equity of the brand. The company has developed home décor and bed-linen for its Disney Princesses brand for girls aged four to six years old, because “every girl wants to be a princess and live in her castle.” But he says that developing similar products for boys, based around superheroes, does not work as young boys are simply not interested.

Lynch adds that: “You need to be sensible and pragmatic when © licensing properties. For instance, licensing a children’s brand for packaged goods or food products might be considered inappropriate.”As noted earlier, the rise of celebrity and sports licensing is a recent and growing phenomenon. Jonathan Sieff is founder and co-chairman of Global Brands Group (GBG), master licensee and representative for FIFA and the Professional Golfers Association (PGA). GBG develops sports, entertainment, corporate, fashion and lifestyle brands. The group also works with Planet Hollywood, Marco Pierre White and Patrick Vieira on their brand management and licensing requirements. Sieff says that sports branding and licensing is on the rise as major sports organisations have become increasingly aware of the opportunities of licensing products and because of greater consumer demand for such merchandise.

For celebrity and sports licensing to work best, a brand needs to generate aspiration among consumers and must have significant heritage if it is to work well. “Brands need to be authentic to be commercially meaningful and profitable,” says Sieff. “The popularity of the PGA Tour, for instance, means there is an enormous opportunity to use its prestigious image, global reach and history across a variety of product categories and services.”

Major hit

Sieff continues: “Likewise, retailers are always looking for innovation and newness and to find exclusive opportunities that will
provide longevity and authenticity to them. Sports brands offer honest, clean and wholesome propositions.”But famous people, unlike other brands, have a will of their own. While Chorion can easily control the image and behaviour of Noddy, it is much harder for companies to control the image of, say, David Beckham. Grobel agrees: “In our experience character/entertainment licences and corporate/personality brands are two separate areas with different associated risks.”

The rise of the cult of celebrity has seen products from perfume to lingerie and fashion ranges branded with the names of Kylie, Anthony Worrall Thompson, Sarah Jessica Parker and the like, and if the public’s obsession with celebrity continues, this trend is unlikely to slow. But consumers aren’t easily fooled. Beckham may be renowned for his slick style, but Beckham-branded boys’ clothes didn’t work so well for Marks & Spencer.

Just lending a celebrity or well-known brand name to a product does not guarantee success. The licensed products must fit well with the brand and add value for both the brand and customer. Perhaps the Met should reconsider rolling out branded pepper pots, and lookBrand Licensing 2005Brand Licensing 2005, Europe’s premier licensing exhibition, takes place on October 25 and 26 at London’s Earls Court 2. The show brings together brand owners, licensing agents, artists’ representatives, television and film production companies and publishers of books, CDs and computer games.

Fresh Concept Zone Exhibitors new to licensing can meet visitors who are keen to uncover brand-new licensing opportunities – before they become obvious licensing choices.Art & Design Zone from wallpaper to greetings cards, posters to
décor – the latest ideas are showcased.

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