Why Australian brands are embracing the partnership economy
The core tenet of marketing is pretty simple and set in stone: brands must generate awareness to attract new customers and prompt existing customers to make additional purchases to drive sustained growth.
What isn’t simple for marketers in 2022 though is finding effective (both performance and cost wise) ways to do this with privacy regulations and changing customer behaviours making things increasingly tricky.
Well documented changes to Apple’s identifiers and the phasing out of third party cookies are making it challenging for marketers to reach new audiences, which in turn is pushing up customer acquisition costs as more brands have to rely on walled garden Alpha publishers like Facebook and Google where (unsurprisingly) costs are rising.
Cost issues aside, customers themselves are turning their back on traditional forms of digital advertising – overwhelmed by the volume and the tenacity of ads following them around the internet and decidedly underwhelmed by poor creativity, clunky load times and lack of relevancy. Importantly, the poor experience and concerns around privacy is serving to undermine consumer trust – one quality that’s essential for building meaningful customer connections and growing long-term revenue.
The good news for marketers is that there’s a booming channel which meets the brief of attracting new and existing customers in a trusted and authentic way – it’s called partnerships.
The Partnership Economy
Partnerships have their roots in the world of traditional affiliate marketing but todays’ modern partnership economy is much broader. It encompasses a myriad of diverse partnerships including premium publishers, social influencers, content creators, mobile apps, charities, brand to brand and more – essentially if two entities share similar values, aspirations and have complimentary audiences then a partnership can be formed based on agreed outcomes.
We’re seeing brands of all sizes expand their partnership programs not only because it’s an efficient customer acquisition channel, but because partnerships are perfectly in tune with today’s consumer environment.
Partnership and the new customer paradigm
With consumer trust in brands continuing to nose dive, purchase decisions are increasingly being driven by authentic, third-party recommendations such as trusted influencers and content-rich sites that inform choice. This is why savvy marketers are aligning with partners who have already created a trusted community to benefit from the halo-effect of alignment.
Further, we are now firmly in the era of values based marketing. Consumer activism is becoming an increasingly powerful force in shaping demand, as recent pressure on corporations operating in Russia have brought to the fore. This means brands must be authentic and genuine in their communication with customers – something that partnerships do incredibly effectively. It’s a return to the era of the soft persuasive sell vs. the hard ‘in your face’ intrusiveness of a pop up banner or interruptive video ad.
Technology is unleashing the power of partnerships
We’re seeing partnership programmes really beginning to take off. Partnership management platforms like impact.com allow workflows to be streamlined and automated across the entire partnership lifecycle. Whether finding and recruiting partners, onboarding them, setting up and managing contracts and payments or finessing productive, revenue-generating partnerships, technology has removed many of the traditional burdens of partnership management.
Crucially, this can now be done at scale which means the ability to include as many types of partners as can be imagined, as well as allowing brands to manage partners across multiple territories, languages and currencies. And it’s not just a channel for the big brand guns as the SaaS-based technology breaks down barriers to entry – at impact.com we have a number of small to mid-size businesses including Sans Drinks, JS Health, LVLY, True Protein as well as larger enterprises like The Big Red Group, Coles, Canva, Virgin Australia and Westpac as customers.
The beauty of partnerships is that as well as being a very strong performance play that can become a significant revenue opportunity they can play a role at all stages of the funnel and help support critical branding, acquisition and retention strategies – with partners being rewarded depending on desired outcome.
The Big Red Group, for example, achieved an impressive 117 percent year on year increase in its return on ad spend (ROAS) and a 32 percent increase in partnership revenue in just five months after implementing impact.com’s partnership management platform.
In the shifting sands of today’s marketing ecosystem, partnerships are emerging as a way to develop long-term relationships which drive more value than just focusing on short-term marketing activities. It’s an opportunity that marketers can’t afford to miss.
By Ayaan Mohamud, RVP Marketing, APAC at impact.com