Pop Culture Pulls in Major Bucks

By David Lieberman, USA TODAY

Entertainment and sports heroes had only a so-so year in 2007 if you look at traditional
yardsticks such as sales of tickets and discs.

But their appeal as pop culture icons was stronger than ever, judging by sales of clothing, book bags, games, toys, food packaging and other goods emblazoned with licensed names and likenesses.

CHART: List of the top 100 licensing companies

Popular characters and brands including Hannah Montana, Calvin Klein and the New York Yankees helped drive global spending on licensed merchandise up 3.6% last year to $187 billion, according to trade magazine License Global and PricewaterhouseCoopers.

"The emerging markets and middle classes in Eastern Europe, China and India want our brands in entertainment, lifestyle, fashion and sports," says Steven Ekstract, the magazine's publisher. That's one reason he expects sales this year to hit $200 billion, even if the U.S. economy remains in a slump. Another reason: When money is tight, people take comfort in familiar and trusted names.

He and others also are optimistic that kids attending this summer's popcorn movies — including Iron Man, Speed Racer, Indiana Jones and the Kingdom of the Crystal Skull, The Chronicles of Narnia: Prince Caspian, Kung Fu Panda, The Incredible Hulk and Wall-E — will walk out wanting related toys and clothes.

About 44% of cash spent on licensed merchandise in 2006 went for goods linked to entertainment characters, most from movies and television, says the International Licensing Industry Merchandisers' Association (LIMA).

Manufacturers and retailers take a leap of faith when they make and stock products based on entertainment characters. These commitments often must be made a year in advance.

Sometimes, promising films misfire.

For example, sales last year tied to The Golden Compass and Bee Movie "turned out to be somewhat disappointing," says Michael Stone, CEO of licensing consulting firm The Beanstalk Group. Movie-related sales "were primarily driven by evergreen and franchise properties. There wasn't a big new merchandising success."

Still, Disney reinforced its No. 1 position on the License Global company list with a string of successes including Hannah Montana (the TV show with singer Miley Cyrus as the title character), its made-for-TV High School Musical franchise and characters promoted in its Disney Princesses merchandise lines.

"Most entertainment is here today and gone tomorrow," Ekstract says. "Disney creates brands. And they tapped into the zeitgeist of the tween girl marketplace."

If a movie's big enough, it can sell merchandise even when it isn't in theaters. This year, Star Wars fans who own a Nintendo Wii can imagine themselves to be Jedi knights with a game controller shaped like the movie's famous light sabers.

Adults also often take comfort in products with familiar names — which is why several non-entertainment corporations are entering the fray.

"They're taking their brand names that consumers already know and trust, and licensing them into related but not competing product categories," says LIMA President Charles Riotto. "That creates a very nice revenue stream."

For example, Stone says he's helping Purina put its name on pet products, including leashes, collars and toys. Samsonite's brand will go on travel-related items such as diaper bags and electronic equipment. Vespa's looking to become a symbol for Italian design in apparel, footwear and espresso machines. Food companies also want to grow into pop icons. Popsicle has a line of candies, Burger King is putting its name on chips, and Hawaiian Punch is on fruit snacks. Aquafina is licensing a cosmetics line. Starburst candy will be on T-shirts.

The public's craving for good taste goes beyond food: In June, many artists will flock to the Licensing International Expo in New York looking for deals to put their names on lines of merchandise, including wall coverings, bedding and furniture.

"The show has been more responsible for this boom in licensed art than anything," Riotto says. "Ten or 12 years ago, we had maybe a dozen artists exhibiting. Now, there's well over 100 — maybe closer to 200."

Study: Marketers Stink When It Comes to CRM

April 13, 2008

By Kenneth Hein (BrandWeek)

Marketers, who spend millions to gain data about their customers, generally fail to use it properly, per a new CMO Council study.

Only 16% of companies rate themselves as effective or extremely good when it comes to customer relationship management. Forty-five percent said they are deficient or need more work at integrating and leveraging customer data gleaned from customer relationship management software.

The report polled 450-plus marketers globally. The New York-based CMO Council teamed with Computer Sciences Corp., IBM Software and Dun & Bradstreet to conduct the research.

"There is a lack of focus as to how to optimize revenue from existing customers," said Donovan Neale-May, executive director of the CMO Council. "In a year of economic restraints, marketers should be more concerned with cross-selling and upselling."

Too often marketers are enamored with chasing new conquests, said Loreen Babcock, CEO of direct/relationship marketing agency Unit 7, New York. "Let's be honest. It's sexier to bring new customers in, but that whole marketing model is broken because there is no accountability."

Only half of the marketers said they have a strategy in place for further penetrating and monetizing key relationships. Not surprisingly, nearly a third of respondents (31%) reported customer churn rates of more than 10%. Roughly another third (32%) reported turnover of 5-10%. Two thirds said they have no system in place for reactivating lost or dormant customers.

Nortel has made great strides in improving its CRM efforts, said Heidi Lanford, its global leader for marketing analytics. "We've formed more of a partnership with our customers. They help us innovate faster by helping us target what their needs are. Leveraging the customers we have is critical to us."

Still, like many companies, Nortel has difficulties with data collection. "Since we're a business-to-business company we struggle to get data from our channel partners that gives us a true view of the customer," said Lanford.

Integrating a wide variety of siloed data sources across often inadequate IT systems is a challenge for many companies, said Alexander Black, senior partner of the strategic services group at CSC, an IT services company based in Falls Church, Va. "There can be as many as 20 to 25 different sources of data."

Wealth management companies like Charles Schwab and Fidelity are the best at CRM "because they have the biggest risk if they lose their wealthy customers," said Black. Internet retailers like eBay and Amazon are also tops because "they started with a clean slate. They don't have the heritage of all those legacy systems."

For many, however, "the landscape is a mess in terms of how data sources are linked," said Babcock. As a result, 31% of respondents said they don't do any data mining at all. In the end, the number of respondents claiming to have an excellent knowledge of their customers when it comes to demographic, behavioral, psychographic and transactional data: only 6%.

Online Adspend set to overtake TV in 2009

(Brand Republic)
Online advertising revenues will overtake traditional television ad revenues by 2009, as internet adspend jumped 38% last year, according to a report by the Internet Advertising Bureau.

The IAB said that faster broadband speeds and greater ownership of laptops propelled internet advertising spending by 38% on a like-for-like basis last year to £2.8bn, taking its market share to 15.3%, up from 11.4% in 2006.

That represented a slowdown from 41% growth in 2006 and 66% in 2005, but it beat the IAB's forecasts of 35%.

The internet, which is now the biggest medium behind TV and press display advertising, is expected to sidestep the downturn in other media to overtake TV advertising revenues next year, the report said.

Guy Phillipson, chief executive of the IAB, said: "To grow 38% from £2bn to £2.8bn is a very powerful performance.

"It's clear marketing directors now recognise the value of online to drive their business and more and more are using rich media and video to build their brands, just as they do on TV."

The increasing popularity of social networking websites, the availability of cheap laptops, wireless connectivity and TV on demand, such as Channel 4's 4oD, were also cited as key drivers behind growth last year.