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Licensing 101: Marketing Side of Licensing Business Part 1

02 January 2015

Happy New Year everyone!

I left things off last year with a post about MGs and Payment Schedules.

Now let’s turn our attention to the marketing side of things after the license agreement has been signed and the licensee is getting ready to start to put the licensed product into the market.

Marketing for the IP is a constant give and take and back and forth between licensor and licensee.  Both sides are trying to push to the other responsibility/cost of marketing the brands, with the agent usually stuck in the middle trying to achieve a fair balance.

For sure, all three parties have obligations and responsibilities related to marketing, and without successful marketing of the brand and the licensed product, the sell through may be poor, the MG not met or exceeded, and unhappy customers all around.

By rights, the licensor is trading on the extensive marketing it will have done in other channels – for instance, a movie being released in 10,000 theatres worldwide with a major studio marketing campaign, or a major sporting event broadcast to millions of consumers.  They will, correctly, highlight that this is what they are bringing to the table and indeed, the whole rationale behind licensing (awareness of brands/IP).

Also, all license agreements will include some language related to the licensee’s obligation to market the licensed product.  The Licensor’s thinking is “I have built the brand and continue to market the brand, the Licensee is responsible for marketing and selling through its own licensed product.”

This, also, is true and fair on the face of it.  We’ll look at it from the perspective of licensee management next time.