How are endorsement fees calculated?
November 16, 2007 5:36 PM Subscribe
Scoobie Doo endorses Mac&Cheese by allowing his likeness to appear on the box. Question- how do his master and the folks at Kraft decide on his price?
posted by IndigoJones to Work & Money (5 answers total) 3 users marked this as a favorite
Or say Mr Bandaid sells a ten million units a year. He sees the popularity of, say, Spongebob Squarepants. He decides that slapping SBSP on the bandaid might boost sales a bit among the hip set. He approaches the owner of SBSP with an offer to do just that.
Where do they begin? Where do they end? Royalties on a portion of the sales increase year over year? Flat fee, and if so, how is it put to Mr Bandaid so he'll think he's getting a good deal? How do they judge between a unisex hero like spongebob vs an alienates-half-the-audience heroine like Barbie? Might not a bold Mr Bandaid assert that he's doing SBSP a favor by giving him, in effect, free advertising?
No doubt each negotiation is different, but there must be some general scenarios. Interested to know what's worked in the past. Thanks in advance