Shaking Things Up in the Ad World

This article in Ad Age about Coke and other companies demanding "results" before paying their ad agencies more than expenses got me to thinking.

When we pitch a new client, we usually say "unlike your ad agency, your p.r. firm or your graphics house, we'll both build your brand and pay you royalties from the work we do." Ad agencies have a very cosy business model in comparison to licensing agencies: they bill for services and don't have to worry about cash flow unless the ad campaign is a flop. But even then, the client may simply ask for a new campaign before risking the hassle of starting over with a new agency.

In licensing, we market your brand, negotiate the deal, and monitor the account. The licensee is required to pay royalties every quarter, so our clients have a steady income stream. Licensing rarely can rival core sales, but can reach significant dollar amounts.

Ad agencies like to talk about brand impressions. Our philosophy at Broad Street Licensing Group is that without sales of licensed products, there are no brand impressions. And our track record shows we know what we're doing.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)