Brand Extension
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The Great Leavening and the Impact on Brand Value – Trend Report

By: Adam Berg, Managing Director, LMCA

An unintended consequence of instant, universal access to “platforming” is the great leavening of brand value, expectation of deliverable brand competency, and emotional brand connection.  These three elements were, and still are, the triad upon which licensing valuations for all brands, corporate and media-based alike, are based. 

However, as avenues of communication explode across all paths consumers use to engage input (the time, place and method) licensing values are being depressed if only because anyone can create a brand, promote, market and sell it.  With important barriers into the hearts, minds and wallets of consumers lowered, so is the amount a brand can charge for that access.

In terms of who and what controls this access, what a change it has been in only 100 years!  History tells us the first radio transmission of the human voice was in 1900.  A more convenient date to use for commercial voice transmission by radio was on August 31, 1920, (A news program broadcast from what would become station WWJ in Detroit, Michigan). We can use that date as the dawn of mass communication of brand messaging. 

Tightly controlled by a handful of companies, all manner of commercial media; radio, print and later television, kept the value of brands very high.  This has completely changed with the advent of the Internet, and it has affected licensing brand valuation like nothing else before it, with the exception of the creation of modern branding practices themselves.

How can anyone affix a licensing brand value when anyone can create a brand?  A quick survey of licensing publications, licensee and licensor websites alike show an ever-increasing number of properties to choose from.  And although “likes” and “followers” are the new measuring metrics for value, they do not necessarily translate into intent to purchase licensed products based on those properties. 

The Licensing Industry’s greatest challenge today if it wishes to grow total licensing income in the future is to either;

  1. Find new ways to limit the number of brands that make it into the licensing arena or
  2. Find new and universally accepted methods of ranking and valuation of brands

 


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