Partnerships are now the go-to customer acquisition channel
The end of cookies is a good thing. People are over advertising and performance-based partnerships are arguably far more powerful. Partnership management platforms are delivering more than 219 per cent revenue growth for Booktopia and other brands and retailers are piling in. Advertising in its current form is broken.
Advertising in its current form is broken.
For customers, intrusive, slow to load and unengaging ads are a turn off, with half of Australians having used an ad-blocker or deleted their cookies, not to mention concerns over privacy fuelled by last year’s ACCC enquiry (with an update due this month) and documentaries like the Social Dilemma.
If this wasn’t enough of a problem for brands, customer acquisition costs have gone through the roof thanks to privacy changes from Apple and Google, market saturation and increased competition. Further, even for brands with deeper pockets, almost half (48 per cent) of marketers1 doubt they can provide key performance metrics without cookies – a real issue given they are being phased out by Google.
Whether as a consequence or as a causation, consumer buying habits have also changed. Faced with distrust and dislike of advertising, the fragmentation of media and the sheer volume of choice, consumers are increasingly turning (back) to recommendations, reviews and word of mouth to make purchase decisions.
Except in 2021 this means heeding advice from an array of people and entities with whom brands enter into commercial partnerships. But perhaps the biggest difference is that these partners can now be effectively rewarded for driving sales (or for the part they play in the sales funnel) from these referrals.
That means performance-based partnerships are rapidly becoming the modern pathway to customer acquisition. As such, they are pivotal for many brands when it comes to launching and growing their business.
The customer zeitgeist
Given 69 per cent of Australian consumers2 have said they no longer trust in advertising, partnerships are able to deliver the authenticity and credibility that ads are no longer able to – if they ever could. Carefully selected partners build trust by association and can introduce a new service or product to an established audience.
Banks such as ANZ are increasingly taking this approach. Meanwhile Binge launched its streaming service in 2020 with a partnership with The Iconic to launch a range of ‘inactivewear’. Equally, small(er) scale partnerships with influencers can also serve to shape the type of word of mouth recommendations that drive buying decisions.
This was certainly the case for alcohol-free online retailer, Sans Drinks which launched early this year. “Building relationships with businesses who align with Sans Drinks is powerful because there is already an audience who speaks our language that we can tap into,” said Founder Irene Falcone. “We were running ads through social platforms, but still there was a desire to speak to people in the environments that they are spending their time outside of these platforms. Partnerships offer a unique ability to reach these people in a way that suits them.”
The new partnership ecosystem
The modern partnership ecosystem has its roots in the traditional affiliate marketing industry, but the difference is the sheer variety and size of possible partnerships out there – from B2B partnerships, content, mobile, influencer partnerships, charity and beyond.
But what’s really changed the game is that all of these disparate types of partnerships can now be managed by a single partnership management platform – allowing brands and their agencies to manage, optimise and report across all partners at scale.
Don’t take our word for it. Sans Drinks Founder Irene Falcone can do the talking: “Partnerships was something that we were already doing organically as a business within our community on a small scale, and so adopting a technology that allows us to build authentic partners at scale was a natural step for us.”
Technology also means brands can more quickly diversify their partnership programmes, tapping new trusted relationships and unlocking powerful network effects.
Booktopia, Australia’s largest online book retailer, has created more unique ambassador partnerships since deploying Impact’s platform due to its flexibility around commercial conditions.
For example, it incentivises authors to promote their own books by harnessing their social media reach to drive sales on Booktopia. Impact allows Booktopia and the authors to track their performance and pays them an agreed commission.
Similarly, tech design unicorn Canva, has been using Impact to find and recruit new types of partners such as microbloggers and podcasters over the last 18 months and Sans Drinks has formed numerous content partnerships, for example with popular review site DrybutWet.
Proving partner value
Now the technology exists to easily and efficiently scale partnerships, it's fast becoming a distinct customer acquisition channel for brands. Canva deployed Impact’s technology to launch a partnership program from scratch. It now manages over 25,000 partners globally and the year-on-year revenue generated from this channel is significant.
In fact, in 2019 Forrester conducted a global study for Impact which found partnerships are critical to growth with companies with the most mature partnership programs driving revenue growth nearly twice as fast as companies with less mature programs. It’s no wonder Deloitte listed partnerships as one of its seven 2021 Global Marketing Trends (under the term ‘Fusion’).
It’s a trend that can be embraced by all sizes of organisations, from the global enterprise to the smaller local start-up.
Last year, A Total Economic Impact (TEI) study by Forrester Consulting released after in-depth interviews with some of our customers showed that the average organisation experienced a remarkable 314 per cent return on investment with the solution paying for itself in under six months.
This means a smaller start-up like Sans Drinks was able to implement Impact a few months after launch. Irene Falcone is happy to help do our job once more: “The value of finding a business that aligns with yours and creating a mutually beneficial partnership is something you don't get anywhere else,” she says. “You've really cracked the code when you can leverage technology like Impact to do this at scale.”
Our tech, your creativity
We’ve made the technology the easy bit. But while tech is the enabler of the partnership economy, the reality is that the partnership channel is more human and relationship-orientated than any previous growth channel.
We are seeing some truly creative and innovative partnerships drive exceptional results for clients because if it can be dreamt of, it can be managed, optimised and measured at scale. That’s the true promise of this new customer acquisition channel – the combination of performance and creativity at scale.
So far, results for Canva, Booktopia and Sans Drinks are delivering treble digits all round.
1Source: Jane Ostler, “Media in 2021: Tough cookie,” Kantar
2Source: When trust falls down, Ipsos MORI, June 2017