Optimising partnerships can mitigate the challenges of today’s ad market, says Owen Hancock, Marketing Director, Impact
Businesses that effectively optimise the partnership channel are growing twice as fast as competitors that do not, according to new research by Forrester. These companies are turbocharging growth, with over half of the many hundreds of companies that Forrester surveyed generating more than 20 percent of their revenue in this way – and mature partnership programmes growing twice as fast.
Indeed the study found that mature programmes, some of which manage thousands of diversified partnerships at once, are driving 28 percent of their total revenue through partnerships, and growing 50 percent year over year.
While partnerships may be nothing new, the modern partnerships that increasingly exist today are providing a much-needed response to a crisis in digital advertising, not to mention a very exciting area of growth – both filling a void and driving opportunity.
Advertising in crisis
Advertising is seen by many as being in something of a state of crisis thanks to a lack of consumer trust; big tech firms enacting privacy changes; and saturated and often expensive marketing channels. All too often the reality is that not only can you not reach the target audience but, when you do, they’re not interested. The marketing landscape is changing before our eyes, with the majority of digital ad spend continuing to go to Facebook and Google, while advertising prices skyrocket and cost-effectiveness plummets.
Partnerships are immensely valuable for growing revenue in this context largely because they are based on authenticity and advocacy. Consumers have a circle of trust. Because of their authenticity, the partners on the supply side (the influencer, the publisher, the technology) sit inside the consumers’ circle of trust. Through creating partnerships between the advertiser on the demand side, the publisher (or influencer or technology or charity etc) can bring the advertiser inside that circle of trust, rather than simply pushing messages out; and given that the communication is based on an existing relationship, the consumer tends to be listening.
What is a modern partnership?
This receptiveness to messaging is more critical than ever, given that recent research showed that 84 percent of millennials say they don’t trust traditional advertising. Add to that the challenge of tracking individual behaviours online, it’s very welcome news that partnerships can help redress the balance. Plenty of opportunity lies there, but what is a modern partnership? It’s an area that is undoubtedly tricky to define.
One approach is to look at examples of what’s working to bring the potential to life. Take the relationship between Spotify and Ticketmaster, in this instance – a B2B software integration whereby an individual on the music streaming service is able to see when their preferred artist is on tour nearby and seamlessly tap through to purchase a ticket. This partnership was so successful that Ticketmaster saw 32 percent year-on-year growth. Beyond this, the integration offered a far superior user experience than traditional advertising would have done. It was non-interruptive; indeed, it added to the experience. It’s hardly surprising, perhaps, that it was so successful.
And then there are strategic brand-to-brand partnerships. One example of this is when LetsGetChecked – a home testing provider – partnered with the likes American Airlines and British Airways, driving 40 percent of total orders in Q1 2021 by offering discounts through its partners, with the help of reassuring, relevant messaging around something consumers were already looking to buy. It saw great success largely thanks to that aforementioned circle of trust that had already been created before the provider entered the space.
Finding the right partners
Another great example of partnerships in practice is Revolut incentivising their own customer base to sell their products. Revolut built a network of over 6000 active partnerships through asking their customers to sign up to promote the Revolut brand to friends and family. After all, who knows the product better than existing customers, and who could be further inside the consumer’s circle of trust than someone with a personal relationship? Of course the outreach was a success and Revolut saw 700 percent customer acquisition growth.
Modern partnerships take a variety of forms, but they share one thing in common: they are based on advocacy, trust and authenticity. Done well, they also generate a substantial return.
Add to this the fact that, today – thanks to increasingly finely tuned technology – modern partnerships are enabling teams, supporting workflows, and freeing us up from manual, labour-intensive tasks. If that wasn't enough, automation is helping with discovery, contracting and payments, tracking, performance and optimisation – clearly it makes sense to include modern partnerships as a key component to any response to today’s advertising crisis.