What is Brand Licensing?
Brand licensing is the contractual process of renting a brand’s intellectual property to another party wishing to use it to market their own products. In such agreements, the licensor gets instantaneous recognition for its merchandise, while the licensee earns royalties on sales of the product using their brand.
Many trademark and brand licensing arrangements generate less than expected returns for the licensee, the licensor, or both. Many celebrity endorsements fail to meet expectations for the product or the celebrity. We have encountered many instances where one party to a license or marketing agreement fails to meet the financial commitments promised in the agreement. Using our experience analyzing brand licensing opportunities, combined with career experience in corporate banking and lending; Nevium’s professionals can provide a pre-transaction assessment of your counter-party’s ability to meet their brand licensing, marketing and financial commitments. This additional knowledge builds a better understanding of transaction risks and allows parties to mitigate those risks before the deal is signed.
Over the past several years, Nevium has been retained by brand owners who are not experienced with licensing and want to do research and analysis to determine if their brand is fit for licensing. We have also been retained by licensors who are familiar with licensing but want to investigate and analyze whether or not licensing their brand into new categories and markets makes financial sense. We have worked with celebrities exploring endorsement opportunities and brand owners seeking celebrities to promote their products. We have been providing incredibly valuable advice and often recommend that the brand owner not move into a new category or even license at all.
Download our case study: Licensed Apparel
Nevium’s Brand Licensing and Influencer Marketing Services
- Analyze your corporate brand and related brand assets and identify best-fit product categories;
- Analyze celebrity endorsement, influencer marketing and promotional activities, compare potential endorsers and identify best-fit product categories
- Analyze advantages and disadvantage of licensing the brand with the identified products and product categories;
- Review existing markets for comparable products selling in the identified product categories;
- Determine the size of a market opportunity for the identified products and analyze the demographic spending patterns;
- Identify the retail channels best suited for the branded products;
- Identify the appropriate royalty rates and licensing structure;
- Build comparable case studies to determine what drove successes and failures for similar brands and endorsements;
- Use Nevium’s Brand Score Tool to identify the strengths and weaknesses of your brand which allows comparisons between different brands used with similar products;
- Perform price premium analyses on the identified comparable brands and score them to determine what factors drove the price premiums;
- Develop financial forecasts for licensed opportunities with different market growth and market share scenarios to calculate the value of forecast cash flows for each scenario; and
- Build financial models that assist in analyzing the potential performance of licensed opportunities under an in-house licensing department vs. a traditional licensing agent structure.