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Licensed: Magazine titles circulate their brands
Source: Brand Channel - by A.K. Cabell
When John H. Johnson first started Ebony magazine in 1945 in Chicago, he had trouble getting advertisers to promote their products in his monthly African-American publication. Convinced there was a viable market among the black community, Johnson solved the problem by forming another company called Beauty Salon, and advertised his own products in the magazine.
This year, the Ebony brand celebrates its sixtieth anniversary, and the still private, family-owned Johnson Publishing Company, Inc., (JPC) is the Number One African-American publishing company in the world. Ebony magazine boasts a circulation of 1.6 million, and JPC claims annual overall sales of US$ 490 million. With global operations in South Africa and offices in London and Paris, JPC also owns several successful subsidiaries including Jet, a newsweekly magazine, Fashion Fair Cosmetics, and the JPC Book Division, and produces several network television shows. Johnson is still the publisher and chairman, but now his daughter Linda Johnson Rice, is the president and chief executive officer.
JPC is now seeking to enhance the Ebony brand even further by continuing to tap into the $773 billion dollar African-American consumer market. Although not a mega-brand, Ebony is already a trusted magazine brand in a niche market of a specialized consumer. The question dangles in the air—why would an established brand step into the cutthroat licensing arena now?
"We want to branch out into other avenues of growth," says CEO Rice. "Whether those opportunities are in technology, or apparel, or even stationary greeting cards—right now, we are exploring these opportunities to see what else we can do with the 'Ebony' name. Ebony is historical, and the name has brand equity and brand loyalty, but now it's time to extend that name into other avenues."
Charles M. Riotto, president of the International Licensing Industry Merchandisers' Association (LIMA), explains the appeal of licensing. "Licensing is one of the most powerful and cost effective forms of marketing and brand extension. Even the most well-established brands need to maintain a presence before their loyal customers, and try to reach out to potential new loyalists." He continues, "Licensing generates recognition, maintains ongoing brand awareness and can also reinforce brand image by bridging the brand and its message into different segments of the retail environment. It's primarily a means of multiplying viewer impressions and expanding consumer association."
According to Riotto, brand owners cannot afford not to investigate the benefits of licensing. "In this highly competitive age, even well-known brands need to be as visible as possible. They are a valuable asset that must be maintained and kept up-to-date. A strong licensing program can accomplish these objectives while driving sales of the core product and creating a significant royalty revenue stream."
As magazine publishers, JPC stands in a long line of predecessors who have seen their brands flourish through licensing. Just three years ago at the L!CENSING 2002 International Show in New York City, more than ten magazine brands made their debut at seeking licensing opportunities. The brands included such powerful publishers as Seventeen, Food & Wine, and American Baby.
According to a 2003 study commissioned by Riotto's organization LIMA and conducted by researchers at the Yale School of Management and Harvard Business School, more than 5.8 billion in royalty income was generated from licensed products. About 45 million was generated from publishing alone, with the strongest showings coming from entertainment/character licenses (about 43 percent share of market), and trademarks/brands and fashion a close second and third (18 percent and 14 percent respectively).
Magazine branding may be one of the most effective ways to strengthen the relationship between the consumer and the brand. A regular reader is exposed to the lifestyle and editorial vision of the magazine, thus creating a recognized, trusted brand. It appears to be an almost seamless transition, as publishers already know their readership's psychographics and demographics.
Hot Rod magazine licensed Hot Rod brand products, concentrating on the auto accessory side and including t-shirts and leather accessories. Those products are now available with mass-market retailers such as Walmart, where the publishers know their readers shop.
Better Homes & Gardens offers household brands that run the gamut from building and remodeling to entertaining and family travel. Fashion magazine Marie-Claire also jumped into the licensing realm with a debut appearance at Brand Licensing London 2004. Teaming up with UK brand licensing agency, the Copyrights Group, Marie-Claire's merchandise licensing program will span across the UK, Australia and North America.
But although magazine brands see high revenues from royalties, there have been some misses and low moments in licensing as well.
Sometimes the fault lies with synchronizing the actual product with the brand's existing image. "I think Playboy in the 1980s developed a line of air fresheners that ended up being so iconic that it decreased the value of the brand," says Ross Misher, CEO of Brand Central Group LLC, a brand licensing consulting firm in Los Angeles. "It was not until the late nineties that the brand was able to make a big comeback in licensing by focusing on sexy, fun fashion."
A miss like this can result from an ill-fitting relationship between the licensor and the licensee. The licensing agent has to understand the brand's vision.
JPC teamed up with multicultural licensing and marketing agency TurnerPatterson to explore licensing opportunities for the African-American marketplace. CEO Debra Turner says she grew up reading Ebony, which presumably offers her a unique vantage to understanding the brand.
"We are in the process now of putting together our strategy and identifying our partners," says Turner referring to her work with JPC. "We're looking at our partnerships in the market with women, with families, and teens, particularly children. We feel that the Ebony brand equity really transcends into a lifestyle, so we're looking into developing lifestyle products."
"Licensing opportunities can certainly help drive brand loyalty, but only when those licensing opportunities match and leverage the true essence of the brand," cautions Jill Griffin, CEO and brand loyalty expert of the Jill Griffin Group. "For example, it's unlikely that Harley Davidson's 'rugged, individualism' brand attributes would marry well with a low-carb, health-conscious line of food products. Such an alliance would be an 'off strategy' for both products. Likewise, Ebony's licensing success will be dependent on two things: 1) a clear vision of what Ebony as a brand stands for in the minds of its franchise of customers, and 2) choosing licensing partners that can share and/or complement that essence."
"The best licensing arrangement are strategically planned with retailer and licensor," says Carole Spieckerman, a self described "retail readiness coach" and president of New Market Builders. "When Parenting magazine made the decision to go into licensing, everyone said, 'Parenting magazine?' But they produced a strategic marketing plan and came up with educational products that really spoke to parents' needs. Publishing licenses are a huge growth area because the fan base is already there. So if the parents are reading Parenting magazine and getting the best parenting information, it is only natural that they will want their products."
Ebony hopes to appeal to consumers who hold companies accountable for their marketing approach to multicultural markets. Ebony CEO Rice doesn't think there is a lack of quality products but rather a lack of products with the African-American population in mind. "I think there are no products serving the needs of the African-American community," she says. "We are giving our readers what they want. They want to know about success; they want to know about achievement. Yes, we have made our publication more contemporary over the years, but we really haven't weaned from that philosophy."
If all goes well, it will be an opportunity for Ebony to broaden its relationship with the reader.
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