The computer is "a significant marketing tool that gets consumers to incorporate our brands into their lives," says Phil Bockborn, the Chrysler group's senior manager of global event marketing. "That person is a walking billboard for your brand. You can't buy that kind of exposure."
The Chrysler group sifts through more than 5,000 proposals a year for product licensing. The Chrysler brand has 200 products from about 50 licensees, Bockborn says. Its licensing revenue has risen 40 percent since 2004, he says. He would not cite dollar figures.
Jeep has 600 products and 150 licensees. Its licensing revenue has increased 20 percent in the past two years. Dodge has 400 products and 100 licensees. Its royalty revenue has jumped 20 percent since 2004, Bockborn says.
Brand Sense Partners, a branding company in Los Angeles, handles Dodge's licensing deals. Company President Robert Hollander estimates that Dodge-licensed products totaled $450 million in retail sales last year.
In one example, Dodge dealerships are promoting a new line of Dodge Hemi power tools on sale at hardware chain stores.
Determining the royalties that automakers collect from licensing is difficult. Fees vary from 3 percent for mass-market small toys to 15 percent for larger offerings by luxury brands, said Steven Ekstract, publisher of License magazine.
"With the competition being pretty fierce out there, licensing is a way to extend advertising and extend the brand and bring in revenue," Ekstract says. "Carmakers can also bond with consumers emotionally via their licensed goods."
This year, the magazine ranked GM the top automaker for U.S. retail sales from product licensing and ninth among all marketers, with about $3 billion in sales in 2005. Ford Motor and its brands ranked No. 22, with $1.32 billion in sales. DaimlerChrysler came in No. 32, with $1.1 billion.
Nissan was No. 71 on the magazine's list, with $165 million in retail sales of licensed products last year. Toyota and Honda did not make the top 100 list.
Fries with that Hummer?
In the first five days of Hummer's promotion with McDonald's, which began last month, the fast-food restaurants gave away about 10 million of the first two of eight Hummer models. Some stores ran out of the toy SUVs, says Hummer General Manager Martin Walsh.
Hummer also licenses other toy versions of its vehicles, including remote-controlled and die-cast models.
Walsh says: "Anytime you get your brand in front of people, that's an extension of advertising."
You may e-mail Jean Halliday at [email protected]