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E-commerce Link: Mutual Benefit

The advantages of online cooperative marketing partnerships

June 2006 By Peter Figueredo
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Would you like other non-competitive marketers to drive highly qualified traffic to your Web site at little to no cost? Are you interested in exchanging customer eyeballs with businesses whose products complement yours? Would you like to grow your online acquisition channel by 5 percent to 10 percent within a year? If you answer yes to any of these questions, you should consider structuring online cooperative marketing partnerships.

A cooperative marketing partnership exists when two companies work together to promote their products or services. These partnerships can take many forms. Some companies simply promote a partner to their customer base, while other examples are more complex and involve co-branded messaging and consumer offers. For example, in a simple reciprocal promotion, Marketer A may place a link on its online confirmation page promoting Marketer B; Marketer B does the same for Marketer A. This type of exchange usually is viewed as equitable if the delivered impressions are comparable.

A more complex arrangement might involve Marketer A including an insert in its customer mailing and Marketer B including a promotional link to Marketer A in its customer e-mails. In this example, the exchange is not the same for both marketers, but they have worked out a deal where the end result is viewed as fair.

Somewhere in Between
In the online realm of performance-based marketing, these relationships fall somewhere between affiliate programs and business development alliances. Cooperative marketing partnerships typically require more work to set up and manage than an affiliate relationship, but they are not as complex as large business development deals. The differences between these types of deals are illustrated in the Online Relationships chart shown below.

Reap the Benefits
Our experience has shown that just one cooperative marketing partnership can account for an estimated 3 percent to 5 percent of a marketer’s online revenue. In many cases, this revenue is from new customers, which only increases the value of this channel. However, these types of deals can yield many benefits beyond the acquisition of new customers. The three biggest benefits to direct marketers are:

1. Efficiency. Most of these co-op deals are set up as barter relationships, so they can be extremely efficient. Typically, the only costs involved are staff time for program set-up or performance marketing agency fees.

2. Third-party Endorsement. By partnering with a strong company, you reap the rewards of a positive brand association.
 

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