On the brandwagon

Watch out SpongeBobSquarePants. Move over Pokémon. There's a new kid in town: brand licensing.

While the concept of brand licensing seems to have taken the retail market by storm recently, it has actually been growing in popularity for several years. Two factors in particular differentiate brand licensing from character licensing and have contributed to its rise in popularity.

The first is that the life of brand licenses—less prone to the whims of pop culture—often have more staying power. And secondly, brand licenses are open to a broader market.

There are a few concerns, though, that licensees and, more importantly, licensors, who want to be 'in the know' should weigh when entering the brand licensing market. As with any licensing agreement, the most important consideration is whether the product meshes with the license. Synergy between the two creates the most successful partnerships. Character licenses often have 'licensability' built in. In fact, most character properties rely on licensing as a major component of their revenue.

By contrast, most brands entering the licensing world already have established identities, heightening the importance of finding a product that highlights the essence of the brand. This is critical because a well-chosen licensed product agreement not only generates additional dollars, but also builds brand awareness. In addition, manufacturers who license their brand need to ensure that the products bearing their name meet the quality standards that their consumers have come to expect.

Licensing is still really the same game; there's just a new player on the field. The industry, in fact, stands to benefit from this newcomer. Because brand licenses appeal to a wider audience, the market for licensed products has a new avenue for growth.