Cute, cuddly and commercial
By Tim Bradshaw
Published: June 21 2010 22:10 | Last updated: June 21 2010 22:10
Aleksandr Orlov, a heavily accented Russian aristocrat with a penchant for velvet dressing gowns, has become one of Britain’s most recognisable faces over the past 18 months.
His social networking scores speak for themselves: about 730,000 Facebook fans and some 40,000 Twitter followers. Tens of thousands have downloaded an iPhone application that plays his catchphrase “Simples” and other such quips. His autobiography – A Simples Life – is due to be published by Random House later this year, while Harrods has been stocking his limited-edition incarnation as a children’s toy.
Not bad for a computer-animated meerkat.
What is even more remarkable is that Aleksandr and his long-suffering sidekick, Sergei, do not come courtesy of Disney, DreamWorks, Pixar or any other silver screen stable of cute, animated characters. Instead, they were developed by advertising agency VCCP to promote Comparethemarket.com, an insurance price comparison website.
Aleksandr is one of the more prominent examples of the trend for animated characters or puppets to act as brand ambassadors. US consumers have long been charmed by the frogs that feature in Budweiser’s advertising or the cockney gecko that stars in Geico’s campaigns. Meanwhile, Domo, the saw-toothed mascot for Japanese broadcaster NHK, has gone on to appear in video games and comics, and spread virally online.
But the proliferation and popularity of these creations and the merchandising they have spawned raises questions for both brand owners and advertising agencies hoping to capitalise on the value of the intellectual property.
For brand owners, the appeal of creating characters is that they are cheaper and more reliable than the celebrities often enlisted to star in campaigns.
“Quite often celebrities do things outside of your advertising campaign which can reflect badly back on your brand,” says Charlie Herbert, director of e-commerce and marketing at Travelodge, the budget UK hotel chain that has just launched a campaign featuring Mr Sleep and the Zzz Squad, a group of gangster teddy bears with a vendetta against night-time noise. “With puppets, you can control your iconography.”
The Zzz Squad was developed by London-based agency Mother, which insists on sharing profits from future merchandising with the client. “In these last few years, the consideration of how we retain IP on our characters has been at the forefront when we create them,” says Stuart Outhwaite, a creative director at the agency.
The parent brand is paramount
Comparethemarket.com’s meerkat adverts first aired in January 2009. In each instalment, computer-generated Aleksandr Orlov berates viewers for confusing the insurance price comparison website with his own Comparethemeerkat.com website.
He has proved so popular that, for some months, traffic to the fictional meerkat site exceeded that to Comparethemarket.com itself. But, in spite of all the spin-off merchandising, Kal Atwal, managing director of Comparethemarket.com, denies that the meerkat franchise is becoming overextended. “If we wanted to, we could do a lot more on merchandising,” she says. “But we have this asset that we need to protect and we don’t want to have overexposure.”
Ms Atwal also insists that any tie-ins are meant to promote the car insurance site, not generate revenue themselves. “We have been strict at focusing on elements that are important to the campaign,” she says. “It would be too short term from our perspective to do it as a revenue driver.”
Mother’s stance follows its experience with Monkey, a cuddly character it created in 2001 for the UK broadcaster ITV Digital. When ITV Digital went into administration, a row erupted over who controlled the intellectual property rights to Monkey. After a legal battle, the rights to the character were donated to the charity Comic Relief. In 2007, Monkey was revived for Unilever’s PG Tips brand of tea under licence from the charity, working with Mother as part of the deal.
In spite of not holding the rights, Mr Outhwaite says the agency remains Monkey’s legal “carers” and “creative guardians”.
“Monkey and Mother are intrinsically linked,” he says. “As a creative property, he has been fantastic. Beyond any significant financial gain, he has won us two or three awards and brought in enough business. He’s earned his fair share over the years.”
Nonetheless, proceeds from Monkey merchandise – from toys to babywear – go to Comic Relief.
By contrast, VCCP, the agency behind Aleksandr and Sergei, does not receive any direct proceeds from meerkat merchandise. Kal Atwal, managing director of Comparethemarket.com, argues that the absence of revenue-sharing arrangements is fair because, as the client, her company has taken the bigger risk by investing in it. “There were a number of pitches and the brief was quite specific,” she says. “You work in partnership.”
Chris Satterthwaite, chief executive of Chime Communications, VCCP’s parent company, points out that a successful campaign creates more work for that client and attracts new ones. “Lots of agencies have talked about creating their own IP and I really haven’t seen any who have succeeded in doing it,” he says. “They are in the services business. You produce it to a brief and [the IP] belongs to the client.”
But, with the advertising industry’s traditional business model under pressure from moves towards time-based remuneration, sharing in the upside of creative work through IP ownership could unlock a new form of revenue for agencies.
Moreover, the guarantee of a 10-year royalty stream would be very welcome for agencies as long-term retainers become scarcer.
Some agencies have set up dedicated brand licensing units in response to the new challenges. M&C Saatchi established one such division earlier this year.
“Traditional advertising is becoming less important, new ways of communicating are growing, yet no one was really doing licensing,” says Matthew Conrad, a former IP lawyer who leads the unit. “The way we look at licensing, it’s a response to a specific marketing challenge. By doing that you’ll mitigate the huge risk of brand [dilution].”
He also hopes to incorporate licensing into more agency contracts for traditional marketing work to avoid missing out on meerkat-like opportunities.
Another unit has been set up by BBH, the agency behind Flat Eric, the orange puppet who shot to fame 10 years ago in adverts for Levi’s Sta-Prest jeans. As well as T-shirts, toys and other merchandising, Flat Eric even topped the charts with the techno anthem Flat Beat . But BBH shared in little of the upside, prompting it to create Zag, its own brand invention business.
“It’s a challenging model that requires a long-term commitment but if you get it right it will be game-changing for you as a business,” says Neil Munn, who runs the unit.
But for all the valuable merchandising opportunities they generate, the main purpose of all these cute and cuddly characters remains to promote the brand.
“I almost don’t see it as brand extension,” says Comparethemarket.com’s Ms Atwal. “It’s more about how we’ve broadened the communications platform that we have.”
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