As we learned in the first post of the creative licensing collaboration series, licensing collaborations between multiple brands can increase engagement with avid fans, and fun products can reach broader audience, resulting in new revenue streams.
In this post, we will deep dive into considerations to make collaborations happen, contractual obligations and financial commitments for licensees related to cobranding concerns.
When you decide to share your brand with another on a product or an ongoing campaign, there are several issues to consider.
A brand typically engages specific generations and looks to branch over to other generations while not losing the essence of their core audience.
In co-branding scenarios, both brand owners need to go through the proper product approval processes with the added scrutiny of the other brand owner’s creative art team, engineers, lawyers, marketing, and packaging experts to reach a final approval.
With your existing contracts, pay close attention to the terms of the deal including distribution, selloff periods, and which channels to sell the product through. The rights between the contracts must match with both brands’ contracts to keep sales focused on the territories allowed.
At the same time, consider restrictions on sales channels or through certain retailers (DTR).
With creative collaborations, the products may only last a season, such as days or weeks.
Licensees must apportion royalties to both brand owners and keep track of advertising commitments.
Collaboration and co-branding are not only fun, but it is also profitable. Lego paid out $440 million in royalties and earned $70 million licensing out their brands in 2019 according to their annual report. Co-branding helps extend your brand to newer generations.
Lego started in 1932. Mario plus Lego cobranding came out in 1985. The Mario Lego duo is popular among Millennials and Gen Z generations.
Linking brands together is easier for the brand owners than it is for licensees.
Here at DSI, we can help bring sophistication to paying multiple parties (brands) on sales of a single item that has multiple brands. Many of our clients are also large licensees who process hundreds of royalty statements each period.
All the deals with the brand owners comply with the stipulations in the contracts and can prorate the revenue when multiple brands are used in a product.
These licensed products are usually sold across different territories, through multiple sales channels, or at times through specific direct to retail campaigns.
Creative Collaborations Get Noticed
Getting noticed is one of the strongest incentives to engaging with creative collaborations.
Social media is the primary platform for strong communicators (GenX), tech savvy Millennials, and digitally affluent (GenZ) generations.
It’s important to reach these consumers where their eyeballs are at, especially in the digital space.
Grab attention through industry influencers who can command large fees or just through industry colleagues who choose to retweet, like, or post your collaboration pictures or announcements.
With games and some consumer products your engagement brings focus on your brands to keep them in the proper light and away from infringing items that can steal traffic to sell illegal products, especially through flash sale sites.
Get immediate visibility in industry press such as news stations, papers, magazines, radio, and word of mouth. Gen Zers pay very close attention to word of mouth from friends and influencers.
Head & Shoulders + Recycled Shampoo Bottle
P&G is a licensing powerhouse. Head & Shoulders became the #1 brand of shampoo in 1982 after original introduction in 1961.
As a creative collaboration P&G appealed to the “greater good” of millennials through recycled beach plastic packaging.
The recycling pilot was launched in France in the summer of 2017 with 150,000 recyclable shampoo bottles made from plastic pollution recovered by hundreds of volunteers and with support from P&G’s recycling experts Terracycle and Suez.
The Head & Shoulders Beach Bottle has since travelled around the world, launching in more than 10 countries with recyclable shampoo bottles including Germany, Spain, Portugal, Turkey, UK, Israel, México, Costa Rica, Argentina, Panamá, and Chile.
P&G has produced over one million bottles by collecting more than six tons of plastic on beaches that could otherwise end up in our oceans.
End Users: Baby Boomers, Gen X, Millennials, Gen Z
McCormick & Co. + Maryland Lottery
A unique advertising collaboration happened when McCormick & Co. licensed their seafood seasoning blend Old Bay to the Maryland Lottery. The tickets sold for $2 each with a maximum payout of $10K.
They even went the extra mile and engineered a scent that one of their scientist’s created as part of the scratch-and-sniff lottery card. The lottery had a huge increase in marketing spend with pop-up booths including TV commercials (200% of normal).
All proceeds from this deal were donated to the Maryland Chesapeake Bay Foundation, a watershed protection society.
So how did McCormick win with the Maryland lottery?
Over 3 million tickets printed and $3.5M in prizes awarded creating the highest indexing $2 scratch-off ever! The lottery tickets were sold in 4,500 retailers in Maryland with over 28M media impressions. Social media was also a big hit with over 7K comments and shares.
Digital Collaboration = Everyone Wins
So how do these companies and many others keep track of all the creative ideas making your brands shine with consumers? This is where Dependable Solutions helps capture information during each step of the process. You have a full history of the steps needed and every party who contributes to the collaboration.
Who benefits from digital collaboration? Everyone.
Your brand licensing teams, sales and marketing departments, licensing agencies covering each territory of the world collaborate. Licensees and manufacturers also have access to collaborate during the licensing product approval stages to bring your products and services to market faster.
Some of the best ways to help spur innovation for collaborations occurs around your catalog of approved images and within your style guides.
You can share videos, instruction manuals, and examples of successful collaborations to specific folders with special access level for retailers, marketing agencies, brand categories, agents or licensees.
Creative people need a platform to ideate. We help you capture each conversation from inside and outside your organization by everyone involved in the creative, legal, and brand management areas.
Create and approve products or services including creative packaging, marketing materials, images, and more.
Gaining visibility to your brand is a direct benefit from licensing.
Creative collaborations tend to get more attention with unique messaging. Many of your licensing agreements have commitments to marketing activities including spending money to promote your brand.
Joint Marketing Funds and Common Marketing Funds remind your licensees that brand licensing is about keeping your brand alive with measurements on ads placed and monies spent promoting your brands.
When it comes to collaborations, always remember your core consumers and leverage complimentary audiences through cobranding.
You will benefit by selling more licensed and core products while gaining advertising reach to promote your brands.
Whether your audience is Builders, Boomers, Gen X, Millennials, Gen Z or Gen Y, you can utilize collaborations to keep your message and brand current in their minds and hearts. And that fanbase has the potential to grow for generations to come.
Generation Alpha (born between 2011 to 2025) will be adding their collaborative voices to the conversation shortly.