As Karen Raugust explains, sometimes companies get lucky and their commercials become their own licensing phenomena. Anheuser-Busch has such a hit on their hands with their beloved CGI Frogs and Lizards
Anheuser-Busch introduced its computer-generated, brand-name-croaking Budweiser Frogs in a 1995 Super Bowl commercial. The characters struck an immediate chord with consumers, who began to demand merchandise featuring the Frogs. As a result, Anheuser-Busch authorized a range of products, marking the first time since Spuds McKenzie in the late 1980s, that the company-a significant corporate trademark licensor-initiated an ad-related merchandising effort. T-shirts have been the most successful items, but the program extended into accessories, novelties, glassware and sporting goods, among other items.
During the 1997 NBA play-offs, Anheuser-Busch premiered a series of spin-off ads, which still air, starring a pair of wise-cracking Lizards (along with cameos by the Frogs). This campaign inspired a similar range of merchandise. "The demand [for the Lizards] was not as dramatic as it was with the Frogs initially," says Cheryl Pfneisel, licensing manager at Anheuser-Busch. "You can't discount the fact that the Frogs were introduced during the Super Bowl."
The Budweiser Frogs and Lizards represent just two of the many licensing efforts in the 1980s and 1990s that have focused on images and tag-lines from television commercials. (For a list of the most popular campaigns and detailed information on each, please see Selected Licensing Programs Inspired by Advertising Campaigns. Several high-profile merchandising programs have been based on animated campaigns. In addition to the Frogs and Lizards, they include the California Raisins and Coca-Cola icons such as the computer-generated Polar Bears and Bud Ice Penguins.
Live-action advertising, usually containing a memorable tag-line, have also been the basis for licensing programs. Among the examples are the current Taco Bell Chihuahua and its catch phrase "Yo quiero Taco Bell"; Wendy's "Where's the Beef?" commercials; and several Anheuser-Busch campaigns ranging from Spuds McKenzie in the 1990s to Bud Light's "I Love You, Man" and "Yes, I Am" in the 1990s. Still other merchandised commercials feature puppets or costumed characters, such as Nike's L'il Penny and Duracell's Putterman family.
Timing is Key
TV ad campaigns tend to become popular quickly, meaning that merchandise must appear right away to capitalize on demand when it exists. On the other hand, demand can end as soon as the commercials go off the air, which often occurs without warning to licensees, licensing agents and retailers.
In the case of the Budweiser Frogs, t-shirts were the first products available, launching three to four months after the Frogs' commercial introduction. Not only are t-shirts popular with consumers, but screen-printing technology allows manufacturers the flexibility to react quickly to market changes. These qualities make t-shirts, as well as similar items such as boxer shorts and sleepshirts, core categories for many ad-related licensing programs.
"It took us awhile to get out on the market with Frogs merchandise," Pfneisel admits, noting that many non-apparel products were not available until the second year. "We've been improving our systems since then. Ideally, we would like to have merchandise in the market at the same time, or shortly after, the campaign is introduced. We are working with the marketing department to get creative direction around the same time TV storyboards are approved. We have to provide the licensees graphics and direction as early as possible, and continue to keep them updated on new graphics that become available, in order to fully maximize the potential of each ad campaign."
The Lizards represented the first time that merchandise associated with an Anheuser-Busch commercial appeared on store shelves concurrently with the premiere of the ad. "We did not have knowledge of what was coming with the Frogs," says Pfneisel. "Now we can go to licensees with a tight creative direction and give them ample time to get the products on the market."
How long a life span will Frogs and Lizards merchandise have? "This is something we, the licensing department, do not have control over," Pfneisel remarks. "We will continue to leverage the popularity of the Lizards [and Frogs] through licensed merchandise as long as the brand marketing group continues to develop and air the commercials."
Laurie Ann Goldman, director of worldwide licensing for Coca-Cola, points out that it takes two weeks to three months to develop a commercial, but 12 to 18 months to develop and ship a product line. "It's not an ideal situation," she says, noting that temporary compromises are sometimes necessary. Coca-Cola's live-action "Holiday Caravan" ad, for example, featured a group of lighted tractor-trailers decorated with Christmas graphics. Lighted die-cast trucks represented a natural product category, but development time was too long for them to be introduced in conjunction with the first commercial. Instead, licensees used existing molds from other Coca-Cola die-cast trucks and added new graphics; the next season, the line was expanded.
Fitting Ad-Related Merchandise Into the Brand Effort
Brand licensors whose programs already incorporate appropriate categories for ad-related graphics such as t-shirts, gifts, novelties and collectibles usually offer advertising-related opportunities virtually exclusively to existing licensees. Forty percent of Anheuser-Busch's 100 Budweiser licensees are involved with the Frogs and Lizards, while 50%-75% of Coca-Cola licensees sell Polar Bear merchandise.
The short window of opportunity and high sales levels associated with ad campaigns present a far different situation from traditional brand-licensing efforts, which generate relatively steady sales over a long period. "You need to hit the market while the commercial is receiving maximum visibility," says Pfneisel. "This is not the case with our core line of merchandise."
One danger perceived by brand licensors is that a hot advertising character could oversaturate the market and dilute the core brand, the company's greatest asset. "With Spuds McKenzie, Anheuser-Busch reacted to an opportunity without much planning or tactical strategy," Pfneisel remarks. "With the Frogs, Lizards and other more recent ad-related graphics, we have been more selective about choosing the proper product lineup and licensees with the most appropriate distribution channels, to maximize our potential while still protecting the integrity of the brand image. With Spuds, the primary objective was to maximize revenue potential. With the campaigns of the '90s, the emphasis is more on enhancing the brand image, while still maximizing revenue potential."
In the case of companies without existing brand-licensing programs, licensors or their agents must create ad-related licensing efforts from scratch. The same is true for licensors with existing programs that involve very different product categories than would be relevant for commercial icons. For example, Taco Bell had previously licensed products to be used for cooking and serving Mexican foods--categories that are not a natural fit for the Chihuahua.
Susan Eisner, vice president of licensing for Leisure Concepts, Duracell's licensing agent, says, "It's a challenge working with a packaged goods company. Their focus is really on getting their products out." She adds that while a corporation may want to catch the wave while its ad campaign is popular, its attention is focused on other aspects of its business, especially if it does not have in-house personnel dedicated to licensing.
"At Taco Bell, licensing is still new," remarks Bill O'Rourke, director of brand licensing at Hakan & Associates, the company's licensing agency. "We are in a hothouse type of environment. We have to get their comfort level up."
"No one creates a campaign for its licensing potential," says Seth Siegel, co-chairman of The Beanstalk Group, licensing agent for Wendy's during the "Where's the Beef?" craze. Siegel points out that the overall objectives for the brand do not necessarily match licensees' objectives. When Wendy's discontinued the "Where's the Beef?" campaign after four months to avoid burnout, licensees were left with excess inventory. In retrospect, however, Siegel believes that the decision to end the commercials was the right one from the point of view of the brand. "What business are you [the corporate licensor] in?," he asks. "The business of creating a new cultural icon or of advertising your brand?"
Some licensors consider advertising imagery to be part of their overall property portfolio. The commercial icons are used as additional graphics over time, rather than licensed separately as short-term phenomena. For example, Pillsbury extensively merchandises the Pillsbury Doughboy, and Campbell's Soup the Campbell Kids as components of their overall licensing strategies.
Goldman reports that, while Coca-Cola incorporates most ad graphics into its broader licensing strategy, there are occasional exceptions. A Diet Coke ad in the early 1990s, which starred a hunky construction worker named Lucky, became popular among women aged 25 to 35. "This was not going to become a long-term enduring icon of the Coca-Cola company," admits Goldman. Still, the company authorized a select line of products, including mouse pads and calendars. Despite the challenges, there are benefits to licensing commercial images. Licensing ad-related graphics and phrases generates ancillary revenue for the company. It also spreads awareness. "Licensed products are a means to extend the brand advertising message beyond the :30-:60 TV commercial spots," says Pfneisel. (Licensing may also be necessary for trademark protection.)
The popularity of ad-related images can boost the success of corporate-logoed products as well. "We feel that the overall awareness of Budweiser licensing has risen in the consumer's mind as a result of the popularity of the ad-related licensed merchandise," Pfneisel reports, noting that in 1995, after the introduction of Frogs merchandise, the total Budweiser licensing program grew more than 50%, with 21% of total revenue coming from Frogs merchandise.
Broadcast Schedules Determine International Potential
Rarely does a company use the same advertising campaign throughout the world. Even in cases when a similar campaign is broadcast in different countries, popularity varies. Therefore, ad-related licensing efforts are typically limited to one or a few countries, rather than being extended worldwide.
Coca-Cola has established merchandising programs in 40 countries and licenses some of its commercial campaigns internationally. The Polar Bears are merchandised in some territories, as is the Coca-Cola Santa. Products based on Coca-Cola's football-(soccer-)themed advertising--which takes advantage of the popularity of the World Cup but is not officially tied to that event--is more popular abroad than in the U.S., particularly in Latin America, Europe and Asia.
Licensing for the Budweiser Frogs and Lizards is centered in the U.S., although satellite spill-over into Canada has led to some merchandise sales there; some demand also exists in Canada for "I Love You, Man" products. Anheuser-Busch is looking into the possibility of extending the Lizard commercials into international territories.
Karen Raugust is the author of several books and reports on licensing and entertainment, including The Licensing Business Handbook,International Licensing: A Status Report (both available from EPM Communications, New York) and Merchandise Licensing for the Television Industry (available from Focal Press, Newton, Mass.). She also writes about licensing, animation and other topics for publications including The Hollywood Reporter, Publishers Weekly and Animation Magazine, and acts as a consultant to the licensing and entertainment industries. She is the former executive editor of The Licensing Letter.