This post was co-written by AT New Media with Toy Consultant Steve Reece back in 2012! It still resonates today. Steve also asked AT New Media CEO, Simon Kay his views on the market.
You’d have to have lived under a rock to have missed the massive merchandising success of Angry Birds when it first arrived. To this day, it is still a shining example....
So does this mean you can stick out merchandise on any App and see it fly…? Alas no!
There are several fundamentals to consider:
1. Massive Metrics – if you just launched your App and have about 7 downloads, it clearly won’t be credible for merchandising! Even if you have a couple of hundred thousand it is unlikely to particularly influence anyone. You need to be talking about millions, and ideally tens of millions if not hundreds of millions. Clearly only so many achieve these metrics, but if you expect big merchandising success without millions of App downloads – sorry, but experience suggests you’re probably dreaming!
2.Strong Brand Identity – if you have millions of downloads of a very generic style App you will still struggle to find Licensees. The reason why Licensees pay to use Brands is because there is strong Brand awareness, which will help them sell more products. Without distinctive and strong Brand identity you have next to no chance!
3. Characterisation – characterisation is critical in many Categories – not least of which would be Toys, Gaming & Publishing, which drive a large percentage of the Licensing opportunity. So in the same way as you need a strong Brand, you also need strong characters in order to translate your Brand from the digital world to the physical world.
4. Apps with existing Licensing Programs – the first person to License your Brand takes the most risk – their investment will either pay back, or prove to be wasted if your Brand does not translate into merchandise sales. But once you have your first Licensee on board, you instantly become a less risky proposition for other Licensees.
5. Cross-promotion – traditional media companies would kill (metaphorically, not actually we hope!) for access to the Marketing opportunity offered by massively downloaded Apps. How can you cross promote merchandise within the App experience? Not sure? Well you need to figure it out, as this will make your Brand substantially more attractive as a commercial opportunity!
For sure there are other factors, but consider these carefully before investing time, effort and money in a Brand Licensing program of any type.
If you feel your App Brand meets all 5 factors, or if you want to find App Brands which do, feel free to drop us a line!
Here’s a Q&A session with Simon Kay, CEO of AT New Media directed by Steve Reece of Virtual World Licensing (VWL):
VWL: What makes you think that there is a significant opportunity for merchandising from App Brands?
SK: It is where a growing proportion of the target audience is.
VWL: Why will manufacturers & publishers be missing out if they don’t feature App originated Brands in their License portfolio?
SK: As with any cycle of brands and licensing, gaming is the next new frontier and in all honesty has been for a while. that is where consumers are and more people than ever are playing them. so naturally, you need to look for brands from this sector.
VWL: What extra opportunities come with App Brands that perhaps aren’t there with other media?
SK: Audience interaction, community, ugc and more
VWL: How many App Brands are out there with significant enough presence & following to drive significant merchandising sales?
SK: Well that is an open question. everyone needs to start to recognise key metrics like mau and dau and start to figure it out for themselves including what audience and demographic they are trying to reach.
VWL: Which Product Categories do App Brands most closely fit with?
SK: Apparel, plush, collectibles
If you would like to discuss how you can connect with this ever significant sector why not contact AT New Media and see how we can support you through our network.