Contact the Editor at karina@plainlanguagemedia.com.
In wrapping up our Language of Licensing feature based on the second iteration of TLL’s Language of Licensing (LoL) Survey, we’re taking a closer look at how licensing executives actually go about deal-making including collaboration, social media, and what “hot trends” have to die once and for all.
Any direct quotations below may have been lightly edited for spelling, grammar, and space. Also check out the first part of our 2018 reporting, an overview of the LoL Survey’s demographics, the question of “merch,” and the 2016 version of the survey.
Half of all respondents (51%) affirmed that licensing is their entire business. That said, the role that licensing executives see licensing play in their business is varied, with 34% answering that it’s additional/alternative profit generation and 35% that it is a marketing tactic. Some 18% use it to test new product categories and 15% use it to test new territories. Note that multiple responses are possible.
When asked what approach their team takes towards licensing agreements, 45% of all respondents answered that it is very restrictive/selective. A full 40% answered that “if it’s not (substantially) profitable, we won’t look at it,” 28% that they “like to take chances on partners,” and 21% “the more deals, the merrier.”
As they expanded on their answer, 10% of all LoL Survey respondents actually filled in the word “strategic.” Most were willing to “take a calculated, well thought-out risk” if they found a “good fit” between product, brand, and/or retailer. Several detailed some variation of a “quality” requirement—of the people involved, the company’s credit score, or the business plan. Some specifically described the trade-off their teams take between effort and profit; they might take a chance on getting “minimal profit” if they’re also required to put in only “minimal work.” A minority specified that they only worked with established, reputable licensing partners, and fewer still that they specifically consider long-term potential when choosing a partner.
Over half (52%) of LoL Survey respondents have seen some sort of internal changes over the last year with relation to licensing in their company. The most common of these changes was the addition of more staff, followed by a new business venture, affirming licensing as key business strategy, or hiring more agents/consultancies. Not all changes were positive, however, with some reporting downsizing or restructuring in tough business conditions.
Working Together
When asked specifically if they felt that has collaboration between licensing partners has increased, decreased, or remained constant, 55% of licensing executives affirmed that they felt it had increased. This trend seems to be more pronounced among smaller companies than larger ones, with companies like Amazon and Disney the most likely to tell their partners “take it or leave it.” Supportive companies are also the ones more likely to “understand the value licensing brings to their brand,” “understand the market,” and are more “consumer-focused.” The types of support most commonly cited are retail development and product/brand development as well as social media planning, marketing, and advertising support.
Just under one-fourth (24%) felt that collaboration had decreased, and 21% that it had stayed the same (on average). Just as “licensors don’t support licensees as they used to,” so do “licensees no longer support brands for very long.” Of those who gave reasons as to why their own collaborative efforts have faltered, the most common was that “everyone is just understaffed” and that they get less sales and marketing support despite shouldering greater demands.
Licensors were the most likely cohort to feel that collaboration among licensing partners has increased (72% answered as such), while licensees were the least likely to think so (36%). Agents were the most prosaic group and the most likely to answer that the quality and quantity of collaborations has stayed the same (36%), or at least that there was too much variance to definitively answer one way or the other.
Note: Numbers may not add up exactly due to rounding. | ||||||
Collaboration | Licensor | Licensee | Agent | Other | Total | |
---|---|---|---|---|---|---|
Increase | 72% | 36% | 55% | 64% | 55% | |
Decrease | 16% | 43% | 9% | 27% | 24% | |
Same | 12% | 21% | 36% | 9% | 21% |
Outdated Trends
When we asked respondents to name the top “hot trend” that they wish would just die already, we got a surprising winner: influencers. That is, social media celebrities and their silly unboxing videos and other campaigns. Next up, specific fashion trends like dad shoes or cold shoulder apparel set some others off as well as toy trends like collectibles.
We’ve never heard of the phrase “surprise and delight” (thankfully), but those who expressed disdain for the phrase may at least take comfort in the fact that they are not alone. Another marketing term that garnered more dislikes was “360 degree” marketing. Other buzzwords included blockchain/bitcoin and disrupters, start-ups, and other so-called lean companies promising to change the world with a shoestring.
Specific trends in deal-making that licensing executives are sick and tired of can be roughly divided into two categories: throwaway collaborations and over-exacting terms. The first includes cheap plastic or digital goods—“products that should not be licensed”—and licensing deals that otherwise “don’t amount to much other than a good lead” through certain industry newsletters. It also includes over-extended franchises.
The second includes the phrase “partnership” (which “just means that the licensor wants the licensee to spend money instead of them”), boilerplate advance royalties (rare, but try telling a “licensor or agent they are the only ones of their competition” to have it in their agreements), and high-handed decrees about the amount of minimum advertising expenditure (“we don’t need to be told how much to invest”).
And, of course, we’re all sick of spam and predatory behavior.
Social Media Blues
Over half (55%) of licensing executives use social media to drive consumer engagement and 38% use it to find and target new consumers. Another 38% use it to build professional partnerships. Despite the fact that influencers and digital celebrities are largely seen as “the hot trend that must die”, 35% of respondents work with them.
One-fifth of respondents admitted that they are “not that good at” using social media (22%) to connect with either other businesses or consumers. A larger share think they don’t use it enough (44%), but practically no one thinks that they use it too much (1%). One respondent summed up the general refrain: “It’s easy to enter any of these platforms, but very time consuming to develop meaningful strategies.”
Note that these figures are taken as a share of total responses and are somewhat depressed because some respondents noted that they are either restricted from using social media by their clients/brands or otherwise do not work with consumers.
When asked which platforms they use, the most commonly mentioned platforms were Facebook and Instagram (26% each, taken as a percent of total mentions) and Twitter and Pinterest (13% each), followed by custom-built platforms (both B2B and B2C), blogs, LinkedIn, and PopJam (4% each). Naturally, each platform has its own strengths with Facebook and Twitter the top contenders for customer service and Instagram and Pinterest for content. But it’s far from universal and social media tactics can “vary dramatically” depending on the brand, the business, and the fan base.