In this report you will find an analysis of the promotional activities in the field of licensing, particularly as regards CPG (Consumer Packaged Goods) and fast food. First of all we’ll deliver the results of the promotion watch conducted since 2009 (see boxed text) that highlights a number of underlying trends.

Licensing promotions back on the rise for 2012!

After a very dynamic year in 2010 (124 promotions noted), 2011 suffered a definite slump with only 99 promotions (-20%), among other reasons because numerous brands offered discount promotions to maintain or relaunch sales under the difficult economic circumstances. Considering the context, the trend noted during the first semester of 2012 is very positive since promotional activity might return to its 2010 peak (already 68 promotions in the first 6 months).

Fast food is the main market for licensed promotions: each year customers enjoy 40 to 50 promotions (42% of the total number on average) and that amount isn’t impacted by economic circumstances: for instance in 2011, while all categories were receding, fast food chains sustained their licensed activity for children’s menus that represented 50% of promotions at the time! The other categories that are big licensed promotion users are snacks and candy (22%), beverages with milk (10%) and very fresh products (9%).

70% of promotions have coed targets in order to reach the broadest audience possible. Movies alone represent 35% of properties used for promotions during the 4-year period of the survey! Family audience blockbusters such as Shrek 4 for instance can be chosen by up to a dozen major licensing partners to set up big marketing campaigns. They are closely followed by comics, publishing and toys that represent 17%, 14% and 8% of properties used for licensing! Clearly children brands are the ones that are most interested in sales activating schemes.

• On pack property visibility
• Period: From January 2009 to June 2012
• Markets surveyed: CPG and fast food.

Classic or event-related properties: two paradoxical points of view!

The classification of the properties chosen for the whole of the promotions scrutinized since 2009 shows quite a good balance between event-related properties and classic licenses (*): promotional event properties represented 53% of promotions in 2010, pushed by lots of big film releases (Shrek 4, Toy Story 3, Arthur, etc.) whereas the agenda was less favorable in 2011 and 2012.

Indeed, the advantage of appealing to a very large co-ed audience is one of the reasons that partner brands insisted upon. For instance, Uhu insists on the need to choose a property that is based on an event and well recognized as well as being attractive to children 6 to 14 years old and their mothers. « Over the past few years we acquired expertise and experience in the choice of our licensing partners, confided Pierre Fargeux, Marketing Manager in charge of licensed promotions worldwide. We wish to capitalize on major events that have a worldwide impact to boost our sales in over 60 countries. If other major partners follow suit, the buzz around the event will be that much louder, just as the potential sales impact ».

Potential partners are looking for security, noted Mr. Antoine Erligmann from Nelvana Enterprises: « For instance negotiations for Beyblade only started at the beginning of 2011 while the property’s relaunch in September 2010 was a huge success.» The property has proven its capacity to get established on the long-term and the first promotions yielded excellent results that reassured the chain store partners, which are already committing for 2013 and 2014. The brands and chain stores involved are offering more promotions based on direct price incentives to trigger immediate sales impact and also sometimes to help some chain stores that are suffering from an image deficit.

This strategy of seeking properties that are making the news and/or represent security therefore seemingly shies away from more classical properties. Sophie Moreau from Les Fées Existent regrets it: « at the moment advertisers and agencies are unfortunately acting very conservatively that is leading them to focus on a small number of events and oversee originality and differentiation possibilities. Agencies aren’t taking risks any more». For instance French movies have difficulty in finding licensing partners, as was the case with mega blockbuster Bienvenue chez Les Ch’tis. There is an exception however: Playmobil has been continuously growing for over 40 years and turns down numerous promotional deals each year to remain in synch with its strategy that focuses primarily on quality and image.

Mascot or property: two very different marketing choices!

Over the past few years there has been a tendency for children’s brands to create mascots or to capitalize on existing characters to consolidate the bond with kids who often are the ones who prompt the purchase: Prince, Danonino, or Pepito for instance. This marketing strategy can include different levels, the simplest to implement being the product’s packaging. In order to develop a global strategy, the mascot must be universal and culturally acceptable in every country. Furthermore this approach represents a long-term investment whereas the brand can prefer to react rapidly for example via a licensing deal. That is Pierre Fargeux’ stance for Uhu: Uhu means ‘owl’ in German so Mr. Fargeux doesn’t wish to emphasize on the bird that has a negative or scary connotation in some territories and prefers to rely on established properties that will have strong development impact whatever the country.

However, creating a children’s property isn’t easy to do: it’s a very long-term endeavor and a completely different job, feels Antoine Erligmann. The entertainment content must provide the child with a very large amount of imagination and already be very well established before the associated products are launched because if not it will only be perceived as a mere addenda intended solely for the promotion of an existing product (food).

(*) Event-related properties: mostly film releases, seasonal TV programs, and sports events.
Classic properties: brands or programs that are already well known, and established or perennial. Generally they are based on animated programs or publishing hits for example.
(**) see www.prince.fr/bdinteractive/