Why Golden Gaytime and Vegemite are setting the partnership economy bar
From Vegemite uniting with Arnott’s to Golden Gaytime inking a Krispy Kreme deal, never before has the power of partnerships been more prevalent. Adam Furness explains the shift and why focusing on partnerships should be a business’ number one goal.
This year seemed to mark the year of the booming partnership economy as a wide variety of weird and wonderful businesses – friends and foes – came together for various exploits.
A glance into FMCG land and we saw some big brand ventures including biscuit and snack giant Arnott’s partnering with Australian spread Vegemite to create ‘Shapes: Vegemite & Cheese’, as well as popular ice cream Golden Gaytime and doughnut behemoth Krispy Kreme teaming up to morph the Aussie favourite into a revamped ice cream-inspired doughnut.
In October, rival ice cream outfits, Australian independent Gelato Messina and iconic Peters Drumstick, which is owned by European food firm R&R, surprisingly united for a limited edition partnership to create Drumstick X Messina. On the global stage, Italian confectionery company Ferrero partnered with Coca-Cola to combine the flavour of the soft drink with the popular candy.
Beyond food and drink, Aussie airline Qantas is another brand that has been prolific in securing partnerships. Not content with already adding Uber and Airbnb to its partnership slate, in September it also secured a new customer loyalty partnership with oil and gas giant BP Australia, allowing customers to earn Qantas Points on fuel.
Looking to the B2B media world we saw Sky and Channel 4 in the UK broaden their partnership to permit Channel 4 to use Sky’s AdSmart technology to deliver fully-targeted, addressable ads across Channel 4 Sales’ linear channels for the first time.
Closer to home, the TV Upfronts season saw news emerge in October of fierce broadcast rivals Nine, Seven, Ten, SBS and Foxtel commit to develop a demand-side buying platform (DSP) for media holding groups and independent agencies. While it won’t be in action in agencies until 2021, the move to give agencies one interface for buying television marks a major shift in the landscape and shows that even the most savage competitors can put differences aside if it makes financial sense.
While there is nothing new about partnerships, these types (and quantity) of deals mark a shift. Rewind 10 or even five years ago and some of these deals would have been laughed out of the board room.
What has changed?
Put simply, the need for growth.
Partnerships have emerged as the fastest-growing revenue channel for organisations, and necessarily so. It’s becoming harder and harder to reach new audiences via direct marketing channels. Businesses are having to step outside of their comfort zones to explore new paths, regardless of competition and rivalries.
Technology has undoubtedly been a key enabler of driving this partnership economy. Innovation in technology, systems, tools and platforms to allow these businesses to explore new partnership avenues as the digital revolution has opened up a whole treasure chest of business capabilities.
While sales and marketing have long been viewed as the primary sources of growth, they are no longer enough to sustain it. Today’s consumers typically avoid salespeople, and are numb to many marketing messages.
Building out a partnership-focused revenue stream no longer seems a mere one-off dabble as we see businesses like Qantas and Arnott’s going back for more. Why? Dividends. And once there’s a partnership in place, partnership automation software can help manage, track and optimise performance.
According to a Forrester study commissioned by Impact in June, there is a direct correlation between a businesses’ partnership program maturity and their ability to meet and exceed revenue and growth goals.
The study found that companies with the most mature partnership programs are driving revenue growth nearly twice as fast as companies with less-mature programs and 77% of those surveyed said partnership development was central to their 2019 sales and marketing strategy.
What’s around the corner for 2020? I predict much more of the same. Not just big brand, shiny FMCG deals, but more of the smart B2B-rivals-uniting style deals, as well as an increasing amount of companies looking to add more partner strings to their bow.
Adam Furness is APAC managing director of Impact
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Image credit:Chris Liverani