Brand royalties and licensing branded content, revenue streams for the future

Beyonce Commercial

Check out this award winning campaign based on branded content, where the American Express brand links card holders to their passions. The content was designed to generate digital connections by introducing card holders, to events and experiences.

There is no doubt that, in this world of multiple platforms, social media, and user generated content, branded content will only increase its place in the marketing mix of brands.

It all sounds great, but good intentions alone are not enough to make a brand successful in the branded content business.  Before you move forward, a roadmap is required to map value, creative approvals, Intellectual Property ownership and performance outcomes. This is quite a complex process and the support of an Intellectual Property lawyer is highly recommended.

Given a red hot issue that has arisen for a client of mine over the last few weeks, I decided to take a look at world’s best thinking and found this great briefing by the Chief Marketing Officer for Bacardi and top international Intellectual Property lawyer.

Here are the highlights of the briefing:

In order to find a match between content and brand, one needs to look at how well the branded content hits the sweet spot of the customer and the brand.

To get the deal between brand and content right, to become branded content, it is wise to develop  a road map from the ‘get go’ to ensure that deal does not come off the rails.

The best deals acknowledge payment around milestones so content creators carry some part of the risk, this means percentage royalties over flat fees for use.

The proliferation of channels to market, increasingly means unlimited media clauses are critical for success today. There also needs to be a clear allocation of roles, with accountabilities, warranties and indemnities spelt out up front. While these are not covered off, unpleasant surprises can mean a brand may be held to ransom in the future.

When calculating the value of the content, use industry benchmarks like those used by Gaffney to value their licensing properties, such as their management of Disney. Figures I have read suggest Gaffney charge somewhere between 10 and 20%.

When finding the value of the final figure, think what is the value to the brand of the data, content and revenue. Also look at payments based on outcomes, including KPI’s around sales results, exposure and customer engagement.

A roadmap session is recommended to form a deal prior to any contracts being formed. At the roadmap session all the stakeholders need to be brought to the table. The session outputs include critical pathways and responsibilities with specifics around: co branding issues, sector exclusivity, creative approval issues, warranties and indemnities.

Most importantly always ensure that the content that is being developed is consistent with the values of your brand and your branded promise.

Louise Kelly

Managing Director

Hearts and Minds

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