Marketing as a subject comprises of everything from digital marketing to out-of-home advertising, including models such as McCarthy’s Marketing Mix and Porter’s Five Forces.

All the while the idea of brand collaborations seems to have been lost within these theories and practices. Why is that? Is it because it is simply not a useful marketing technique? 

It is fair to say that partnership marketing has been simply swept under the marketing rug. Read any marketing text book and you will find chapters on digital, social, strategy and branding, and amongst these you will notice the odd reference to brand synergies between two companies. However, search online and you will find articles, agencies, and job adverts on partnership marketing all under an array of titles; joint marketing, co-marketing, and merchant marketing.

There also thousands of global brands that participate, from Virgin to Google, Pepsi to O2, and Apple to American Express. It is becoming clear then that it’s an emerging subject, and I am sure you will agree it should now be acknowledged as one of the most important marketing techniques to materialise in recent times. 

Over the next decade or two we will see an even faster advancement in technology and greater connectivity but this inadvertently means an even higher rate of competition. Those businesses with common aims should stick together; they must collaborate and share resources. Brand sharing and benefiting from each other’s proposition will start to take more and more prominence. For those businesses that want to not only survive but thrive in the 21st century market, then partnership marketing is the answer.

So firstly, what actually is partnership marketing? 

‘Partnership’ is now the more universally accepted term. It’s been defined multiple times and in many different guises, but in its simplest form it can be described as:

"Where two or more brands collaborate via strategic marketing campaigns to help each other achieve their objectives. It is where a primary brand has the ideal product or service to compliment a secondary brand; utilising target audiences to improve their value proposition." 

What are the 10 types? 

These are the most common forms of Partnership Marketing practiced by small, medium and large businesses. While one model might be successful for one company it may not necessarily fit into the scope of another. Brands may decide to use just one or many of these types, or occasionally combining several to form a hybrid. The 10 types are not fixed; they are fluid and can be interchangeable depending on the partnership in question:

  1. Affiliation
  2. Content
  3. Distribution
  4. Charitable
  5. Joint products
  6. Licensing
  7. Loyalty
  8. Product placement
  9. Shared stores
  10. Sponsorship

In this, part one, we'll cover the first five on the list. 

1. Affiliation

“Affiliate marketing is a performance marketing technique where websites otherwise known as publishers will promote your product or service in return for a monetary reward.”

Affiliate Marketing can be achieved by using any of the methods described below. Both utilise a primary partner, often referred to as an advertiser, and a secondary partner, often referred to as the affiliate or the publisher. These partners work in collaboration; in doing so the primary brand benefits from promotion of their products resulting in sales, the secondary benefiting from commissions earned per lead or sale.

They are three ways brands can work with affiliates:

  1. In-House - when a primary brand is looking for a solution that provides them with the ability to upload all creative banners, allow an affiliate to select the type of campaign with relevant tracking links and display all results in one centralised location, they use an affiliate program.
  2. Networks - a third party where both advertiser and publisher register and utilise its services all through the network’s external portal. A major benefit to brands over an in-house solution is that it provides far greater reach for publishers to find relevant brands to promote, while the advertiser is immediately exposed to thousands of publisher sites rather than having to promote their own in-house programme. 
  3. Agencies - a third option is to work directly with an agency which manages the portfolio of affiliates as well as the operations behind it such as banners and tracking links. An agency can also be a network, or they can manage your own in-house solution, ultimately they should support your requirements in this channel.

Affiliates can promote an advertiser using numerous techniques. Depending on the type of website, unique selling point (USP), and target audience they will promote those with the highest conversion and those offering the greatest commission rates. Promotional formats include: 

  • banner ad - banner ads are one of the more common forms of exposure for a partner brand on a publisher site. Header (728x90) or Skyscraper (160x600) banners are most popular. 
  • text link - a simple hyperlink often found within an article. It is more subtle than a banner ad.
  • dedicated article - a strong partnership between brands can lead to more unique forms of exposure. A dedicated article can engage a target audience and provide a more detailed product description than that of a text link or banner ad.
  • promotional page - exposure of advertisers through specific areas of the publisher’s site devoted to promotional offers. Here promotional banner ads can be kept separate from the core content.
  • newsletters - for those affiliates that require accounts to be created or email addresses to be captured newsletters are a strategic way for them to directly market affiliate offers. 6Groupon and 7Quidco for example are excellent at targeting their segmented database with the latest partner deals.
  • comparison table - for aggregator sites such as Money.co.uk (below) and Confused.com the comparison table is a huge USP, adds value, and attracts customers over other affiliates. It allows them to rank advertisers by pricing, features and benefits to consumers.

money.com

Money.co.uk comparison site

Affiliate marketing is widely considered to be one of the purest forms of partnership marketing. It comes under the umbrella of performance marketing because it can be so accurately measured and the return on investment (ROI) precisely calculated. Affiliation is quantifiable and unlike some other marketing methods can always be proven.

Affiliation refers to the practice of partner websites promoting your brand in return for commissions. An affiliate will be paid depending on the agreement that has been made with the advertiser. It's not always a complete sale, there are many models that pay based on the number of impressions, clicks, or leads. This doesn’t mean that an affiliate will always receive commissions on just one sale, the deal can be on multiples; CPM (cost per thousand impression), CPC (cost per click), CPA (cost per acquisition), revenue share (percentage of the revenue a sale generates), or a fixed fee per ad-spot. There are also amalgamations of these often referred to as hybrid deals. 

An affiliate can range from a successful newspaper brand to a small niche one-man-band website reviewing headphones. Both of these follow the same principle as they contain content, attract traffic, and publish ads. There are a number of affiliate variants out there; voucher sites such as Groupon, cashback sites such as TopCashback, or comparison Sites such as MoneySupermarket.com or Gocompare.

Bringing this back to partnership marketing; when primary brands are looking for specific partners to promote their services, affiliation is seen as a very attractive option. It creates an alliance of brands in a very direct way towards a mutual target audience. LG for example, the popular TV manufacturer, will work closely with renowned TV review sites in order to drive sales. The review site will demonstrate the quality of the brand offering and effectively promote LG’s products to their database. 

2. Content 

“Content Marketing is the creation of relevant content that will be highly engaging to customers. Content partnerships are the development of such content in collaboration with a partner brand that is then shared or promoted to respective target audiences.”

There are two main ways a brand can partake in content partnerships: 

  1. Co-creation - both brands collaborate to create the content. This could be industry trends, market research, product releases or thought-leadership papers. By writing the content together and referencing one another's products it will align both brands for mutual recognition. 
  2. Link sharing - the primary brand creates the content but works in partnership with a secondary to promote it. Link sharing means linking to the partner’s content from their own site. This provides exposure, aligns both brands together, and advances SEO. 

Content partnerships can take various different formats, such as:

  • white papers - presenting the latest industry research, advice, knowledge and trends using thought-leadership. 
  • articles - featuring the latest joint products, opinions or promotions. These can take the form of reviews, how-to guides or case-studies.  
  • infographics - a visual representation of information or data. Extremely effective for the use of joint brand imagery amongst the content. 
  • videos & podcasts - the joint creation of a video or spoken media. Utilising the likes of YouTube to engage with the target audience.  

SEO is now such an important aspect of digital marketing that specialist agencies have arisen, dedicated jobs created, and millions spent. Success in search rankings can literally make or break a business, making it the 21st century's most talked about marketing topic.

The evolution of websites has now reached the point where each page should ultimately evoke an action to convert viewers into paying customers. This means the greater numbers to a site the better chance of conversions and therefore revenues. This is the reason millions are spent climbing the ladder of Google’s rankings. 

Organic traffic via search engine optimisation is governed by a complex well-guarded algorithm made up of a huge number of variables, such as keyword usage, trusted inbound links and subject relevance. This means that your 'content is king' - how it is constructed, who likes it and how it is shared has direct influence on traffic, therefore conversions and ultimately sales.

SEO is not the only means to achieving traffic; social media has a huge part to play too. Channels such as Facebook and Twitter can guide vast quantities of traffic to your site depending on what you have to say and your shared content. 

To ensure traffic remains high from both SEO and social the information that consumers receive must be fresh, relevant, and engaging. It also has to answer their questions, fulfil their needs and attract their attention. So this is where content partnership marketing comes in. 

The fact is, one brand can create appealing content, but by providing fresh material in conjunction with a partner suddenly makes it an entirely new proposition, one that is far more interesting, likeable and engaging. This will attract the attention of both customer bases and affiliated parties. All this means a much larger network that will interact and share it. From an SEO and social engagement perspective the benefits are vast. 

Let’s consider, too, the cost effectiveness of such a partnership; utilising each other's personnel, resources and industry knowledge to produce the content is of huge value to both. While the utilisation of one another’s digital channels and expertise will mean a lower end cost per acquired customer per content piece produced.

3. Distribution 

"Where one partner agrees to cross-market or bundle another partner’s product or services into their own distribution channels to target the agreed customer base."

There are two main types of distribution partnership marketing, each a slightly different way to distribute a partner’s product or service: 

  1. Bundling - including your partners offering as an in-box bundle or package insertion, such as giveaways in packaging, promotion within the product itself or online bundle for a purchase such as buy-one-get-one-free. 
  2. Cross-marketing - achieving the joint marketing efforts of both products through a distribution channel. Rather than the inclusion of the product within the packaging, instead offering a marketing opportunity to a partner brand within the distribution.

Online, offline and mobile all have their own distinct vaue in distribution of a partner brand in order to provide the most effective customer targeting. The more common forms include: 

  • In-store leaflets
  • In-store coupons
  • Magazine coupons
  • In-store live demonstrations
  • In-store TV demonstrations
  • Email vouchers
  • Mobile coupons
  • QR codes

This is widely considered one of the most widespread types of partnership marketing, and one that has been practiced for decades. The reason for its popularity is due to the physical nature of the collaboration. It can physically place a partner brand in the hands of the target audience and visually places the partner brands alongside each other.

Both brands show a strong association and trust, and this resonates all the way to the customer, having a positive effect on loyalty and customer retention. Often the secondary brand will provide a primary brand an 'exclusive' offer or discount. This adds a huge advantage to sales potential.

The act of distributing a partner’s brand within your own store and alongside your own products is one of the purest and most recognisable types of partnership marketing. 

4. Charitable

"A primary brand sponsors or markets itself with a charitable organisation or cause. In turn they seek exposure and promotion via agreed marketing channels."

Benefits can be very fruitful when working with a charitable cause. We have pin-pointed two main reasons why a primary brand would do partner with a charity:

  1. Cultural influence - a brand can primarily work with a charitable brand to offer a moral contribution. This is part of company culture and CSR and often attributable to the attitudes of senior stakeholders.
  2. Brand leverage - some firms prefer to associate themselves due to the benefits it brings to their consumer and public reputation.

Charitable partnerships can take a number of forms, with various ways in which a brand and charity can run such campaigns. These include exhibitions, public events, award shows, sponsorship, raffle contributions and news stories.

As today’s customer is more industry aware and savvy with their purchasing decisions, with abundant comparison and review sites at their fingertips, a brand that upholds a strong public reputation is increasingly standing out from the crowd. Associating your brand to a charitable cause is therefore fast becoming the main method to securing such a status. 

Innocent Smoothies for example, one of the most reputable drinks companies in the UK, stressing the importance of fair-trade production, also associate themselves with a number of charities via their Innocent Foundation. Firms such as this that can leverage a Charitable Partnership for marketing purposes will see their public reputation and brand image vastly enhanced.

5. Joint products 

“When two companies agree to create a new product or alter an existing product in order to provide additional value to the customer. Often the product is an amalgamation of both products aiming at mutual target audiences.”  

For brands partaking in joint product partnerships there are many factors to consider. Bearing in mind the huge impact on internal product departments, they are presented with three main collaboration choices:

  1. Powered by - a partner brand supplying their services to benefit a new or existing product. Often software providers will provide their technologies for a product. Mobile phones powered by a technology provider such as Google or Microsoft is a good example.
  2. White label - many successful technologies also offer white label solutions. This means selling off their services or leasing their technology for a partner brand. The partner brand then utilises it under its own brand name.
  3. Product merger - a merger is where both brands have decided to amalgamate their products together. This too comes in various formats, from full to partial mergers depending on the product line.  

These alliances can be very interesting for an organisation's product portfolio, the result is a fresh line of innovative product solutions. With the breakthrough of digital technologies over the past decade we are now seeing a far greater increase in such partnerships. There are four specific forms that have emerged:

New Product Launch - two firms may decide to launch a brand new product, one that amalgamates both brands under an exciting new concept. Both companies leverage each other's brand image, reputation, resources, and market reach – as shown in the example below with Apple and Nike who combined to create the 'The Nike & iPod Sports Kit'. 

nike ipod

Brand leveraging - rather than a full product merger often just the branding is joined. With such product partnerships it is about utilising the partners design and packaging. 

New markets - by partnering products together a popular firm in the US seeking new customers from Europe might collaborate with a successful European brand to enter this new market, and with this the joint product might have to adapt to the new market.

Sharing costs - occasionally a product partnership will purely be a cost-saving exercise. This is achieved with the sharing of resources and expertise; this in turn reduces cost of production and marketing.

The main consideration with these kind of partnerships is that they are a product and marketing initiative involving the buy-in from both departments. Any alterations to a product would have to be planned for; Sales departments briefed on alterations, with Marketing prepared for go-to-market campaigns.

An effective go-to-market strategy will require a distinct value proposition. The unique selling point of the joint product must be communicated to highlight these new product features and their benefits to a consumer. Branding is also important, getting this right will ensure that the primary brand's look and feel is displayed not only through the packaging but also via all advertising channels effectively.

It is fair to say that this is probably the most innovative type of partnership marketing but one that does not come without its complications. If the product misses the mark and the value proposition fails to resonate with the target audience it would certainly be deemed a very expensive failure.

Read part two of this article, covering:

  • Licensing
  • Loyalty
  • Product placement
  • Shared stores
  • Sponsorship
James Cristal

Published 20 June, 2017 by James Cristal

James Cristal is Growth and Partnerships Manager at Nutmeg. Connect with him on LinkedIn.

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Comments (2)

Richard Fullerton

Richard Fullerton, New River Marketing

Great article, James, very informative. But you should really give more examples for each category and sub-category so that we can fully understand the concepts.

5 months ago

James Cristal

James Cristal, Marketing Manager at Nutmeg

If you are interested in learning more about Partnership Marketing I really recommend this course: https://www.udemy.com/the-complete-guide-to-partnership-marketing-course/

5 days ago

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