Why Now? The Rise of Licensing

• Author: Michael Sanford Stone
• Profession: B.A. from Hamilton College and a J.D. from Emory University School of Law
• Pages: 1-16

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CHAPTER 1

Why Now? The Rise

of Licensing

Are Brands Dying?

Contrary to what you may have heard or read, the answer to that

question is “no.” But the marketing environment has changed so

radically in recent years that it can create the illusion of brands

in decline. To understand the new reality, let’s start with another,

more relevant question and find our way back to answering

whether brands are really dy ing.

Why are corporate marketing leaders and others turning to

licensing as never before? Or if they aren’t, why should they? Well,

anyone who doesn’t live under a rock knows that in recent years,

the Internet and everything associated with it has diminished

the eectiveness of traditional advertising and complicated how

brands (and retailers) engage with consumers and drive consum-

ers to make a purchase. Technology has enabled the accelerating

changes in marketing and reta iling. Consumers now have multiple

entertainment and information platforms with which to engage

brands, learn about products, and comparison shop. ey also

The Power of Licensing

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have multiple options with regard to purchasing. And brands pos-

ses s mul tiple plat forms to us e in r each ing c onsu mers, freq uent ly in

genuine ways. Not so long ago, we received much of our product

information from traditional advertising—television, print, and

rad io. e purp ose of bran ds, a er a ll, is to a ssur e us o f the q ual ity

of a product and to make our buying decisions easier. It’s all about

trust. Consumers are generally confused about what to purchase

(in virtually every product category, particularly a rst purchase

before they develop brand loyalty), and they want their buying

decisions to be made easier and faster. Moreover, they want to feel

safe in making their purchases. Advertising was their source of

information; it was what drove trust in brands, loyalty and, most

importantly, buying decisions. And that’s where brands, under-

standably, devoted the majority of their marketing and commu-

nications resources.

In many respects, advertisers had a monopoly on the infor-

mation that consumers received about brands and products.

If anyone wanted to take a deep dive into brand and product

research, that person purcha sed the relevant edition of Consumer

Reports. at wasn’t so long ago. Now, however, that monopoly

has been broken apart. e Internet and technology has turned

everything on its head. Consumers have all of the information

at their ngertips about products they could possibly want (actu-

ally, much more than they really want). With a click, they can

obtain this information from experts, from “inuencers,” and

fro m each othe r, shar ing w hat t hey k now in onli ne rev iews , pos t-

ing and blogging, and from referring to all sorts of other avail-

able content. And it’s all free (in the old days, we had to pay

for an issue of Consumer Reports). ey don’t need to rely on

advertising as they once did. Increasingly, they don’t even need

to see , touch, and feel the pro duct, order ing onli ne sight u nseen.

But the requirements, expectations, and needs of consumers have

also become more robust, driven by all of this information, and

brands (to be successful) must address those elements of the con-

sumer’s connected shopping journey.