This Post is Recently Updated On 23-July 2019.
Co-marketing is a very advantageous marketing strategy that utilizes multiple brands to sell products. Perhaps you are wondering what exactly it is. In the simplest form,co-marketing is a form of partnership between two or more similar but non-competing companies, where these companies jointly market each other’s products. For instance, a mobile phone network provider may partner with a well-known mobile brand to market each other’s products. It’s a general belief that co-marketing strategies work best when two products are related. However, this can also work out as a great option when the products are not closely related.
According to the research by IAB and PwC,there has been significant growth in expenditure on such joint strategies over the past few years. The report says that in 2017, customers spent a whopping £554 million on affiliate marketing and activities related to lead generation.
Co-marketing can be done successfully in various forms through guest blogs, product testimonials, creating infographics, relevant videos, joint advertising, co-sponsoring events, providing freebies of a product sample on the purchase of the other product, joint press meetings, and many more.
Co-Branding vs. Co-Marketing
There’s a misconception where co-branding is taken to mean the same thing as co-marketing. If you wonder how these two differ, you should know what each refers to.
To begin with, these are quite similar.
Co-branding stands for a partnership where two (or more) companies combine their expertise or products to create an even more precious offer or product. Thus, you can say co-branding eventually results in the formation of a new product.However, this is not the case with co-marketing as it doesn’t involve the creation of anew product. Rather, a company using it only leverages the positives of the other products to market its own products.
With co-marketing campaigns, two or more companies get an opportunity to work together to promote a shared offer. In such a partnership, the companies involved promote that offer and share the consequences of that promotion among themselves.
Some of the good reasons to choose co-marketing are:
- You can hit the target audience immediately
- Enjoy greater online presence
- Have a better SEO impact
- Improves the sales
- Cost-effective solution
- Can leverage the position and reputation of the other brand to your advantage
- Reach your partner’s audience and convert some of them into your followers or customers
- People relate more to co-marketing since they can see some benefits while they purchase products
Below are a few guideline questions that need to be answered before choosing a brand as a co-marketing partner.
- Do they have a similar set of audience that my company has or wants to grow?
- How many leads can this partnership bring my way? Will it be adequate to be worth my time and effort?
- Do they have additional (or other) expertise that I lack?
- Does the brand enjoy a good reputation?
- Are they enjoyable to work with?
- How much will this cost me?
- Does the other brand agree on a common topic and the timelines required for co-marketing?
You should remember that co-marketing is difficult to pitch in case the advantages are one-sided. Before you finalize a collaborative agreement, it must make sense business-wise for all the parties involved. So, thinking only about what’s in it for you won’t help. But at the same time, agreeing to a partnership where you just get the scraps while the other partner(s) reap big rewards is a complete no-no. The only way this arrangement will work is when the benefits are proportionate for the parties involved.
The most important thing when choosing your co-marketing partner is to ensure the reason and objective of the project are similar for both the parties involved. In case you are considering a partner that wants leads for its business while your aim is to boost the ticket sales to your annual event, you are likely to be hard pressed to find a common ground that satisfies the needs of both the parties involved.
Types of Co-Marketing
Some broadly classified co-marketing techniques are listed below.
Affiliation marketing is a co-marketing technique where websites otherwise known as publishers will promote your product or services in return for some monetary rewards. In this case, an advertiser and the publisher or affiliate work in collaboration. This is beneficial for both since the primary brand benefits from the promotion of their products resulting in an increase in sales. At the same time, the affiliate benefits from the commission earned per lead or sale.
You can work with affiliates in three ways:
- In-house: This allows you to setup and manage your own affiliate program. The onus lies on you to build and foster relationships with the most appropriate affiliates.
- Networks:This would include a third-party where publisher and advertiser register to utilize services through the network’s portal. This has a benefit over in-house technique as this is more cost saving and provides a greater reach to find affiliates.
- Agencies:This option includes working with agencies that manage portfolios of affiliates as well as all operations concerning it.
The affiliates can promote the products using the banner ad, text hyperlinks, promotional page, dedicated article, newsletters, and comparison table. You can search online to find a list of available affiliate partners.
Few well-known dedicated affiliate sites are-
- Click Bank – http://www.clickbank.com/
- Affiloroma – https://www.affilorama.com/
- Amazon Associates – https://affiliate-program.amazon.com/
- Commission Junction – http://www.cj.com/
- Solo Build It – http://www.sitesell.com/drivers.html
Few of the top affiliate networks are-
- Rakuten Marketing – https://rakutenmarketing.com/affiliate
- ShareASale – https://www.shareasale.com/
- eBay Partner network – https://partnernetwork.ebay.com/
- Avangate – http://www.avangate.com/
- LinkConnector – https://www.linkconnector.com/
A good example of such affiliate marketing can be seen as part of snapsort.com
The site provides a comparison between two well-known brands and an option to purchase either of them. Something worth noting is the affiliate website does not have any additional advertisements.
With affiliate co-marketing, the advantage lies in reducing a lot of pain associated with self-research.
Content marketing is a form of co-marketing that uses highly engaging content to find new customers.A content partnership helps in the development of such content in collaboration with a partner brand. This can be done possibly in two ways:
- Co-creation – Both the brands collaborate to work towards creating a common content. This could be market research, product release, industry trends by referring to one another’s products to improve popularity, etc.
- Link Sharing – Link sharing means linking to the partner’s site from their own site. This provides better exposure to both brands.
Content co-marketing can be in various formats such as links, articles, podcasts, videos, infographics, white papers, through social media, etc. This improves both the brands’ chances of getting new customers. Though there is no hard-coded rule around this, a preferable approach is to search for a similar niche company or a company which is more relevant to your brand.
Some of the top examples of such co-marketing include:
- The Renewal Project – The Atlantic + AllState (http://www.therenewalproject.com/)
- Defy Hunger Together – The Wall Street + Mini (http://partners.wsj.com/mini/defy-hunger-together/)
- Roots: A cultural force that changed the nation – The NewYork Times + History channel (https://paidpost.nytimes.com/history/roots-a-cultural-force-that-changed-the-nation.html)
This is a strategic partnership, where one brand concurs to bundle or cross-market the product of its partner. This can happen in two ways:
- Bundling – This includes one partner offering goodies such as online bundle for a purchase or promotion within the product like give a ways in the package, buy one get one free, etc.
- Cross-Marketing – This is done by marketing both products via a distribution channel. In this case, rather than including the product within the packaging, the brand offers marketing opportunities to its partner within the distribution.
This can be done in the form of freebies, discount coupons, vouchers, in-store live demonstration, QR codes, etc.
A good example of this type of co-marketing is shown in the partnership forged between Coco-Cola and McDonalds.
If you notice, both are not similar brands but are complementary. This is definitely a win-win situation for both brands.
Another example is Dell and Intel co-branding. Both are similar niche products and need each other to survive the market.
A similar example is with Airtel and iPhone. Both are popular brands and use co-marketing to reach out target audience.
Charitable or CSR
In such scenarios, a primary brand sponsors or markets itself via a charitable organization or a cause. In turn, they seek exposure and promotion via marketing channels. These are usually for a social cause and this could be via:
- CSR – This could be a part of the corporate social responsibility (CSR) of the company’s agenda that provides a wider spread across the market owing to the cause.
- Brand leverage – Some brands may specifically like to be associated with a charitable organization due to the benefits it brings to their consumer and public reputation.
This can be accomplished in various forms such as via public events, sponsorships, news stories, giving a part of the profit earned to the charitable organization, etc.
One such example is when you buy P&G products, some portion is given to a charitable organization called ‘Shiksha.’
Another such co-marketing strategy can include providing some additional incentives such as scholarship and free online tutorials. Below Colgate offers Scholarship and Byju’s tutorials.
Another similar strategy is the partnership between Apeel Sciences (specifically its avocados) and Kroger, which marked the latter’s 1-year anniversary of Zero Hunger|Zero Waste initiative.
Another heavily used strategy of co-marketing is by defining joint products. Two companies agree to create a new product or alter an existing product to provide additional value-addition to the customers. Often, this would be an amalgamation of the two products aiming at a mutual target audience.
This requires a lot of market research and a lot of things need to be taken into consideration by both the brands. This can be classified as:
- Powered by – A partner brand will supply its products or features or services to benefit a new or existing product. This is commonly used in the software and technology industry, where one service is being used by another product. A good example of this is mobile phones powered by a technology provider such as Google or Microsoft.
- White Label – Many brands also offer white label solutions. This means selling off their services or leasing their technology for the partner brands. The partner will then use it under its own brand name.
- Product Merger – This is where two brands merge and form their own product together. This could be a full or partial merger, where only a certain part of the brand is merged.
This is especially beneficial for both the brands and allows the involved parties to take advantage of each other’s reputation, brand image, resource, customer loyalty, and market reach.
One such good example is the “The Nike & iPod Sports Kit.”
This is cost effective since both brands share the advertising and marketing costs. Another notable product is “Microsoft and Nokia”
A common powered by example is when a product uses any specific payment gateway. For instance, below you can see Stripe being used.
This is a business arrangement in which one company gives another company permission to manufacture its products using its brand image for an agreed payment or partnership. This can be done in two ways:
- Selling – In this case, the company that decides to license its brands can choose to sell it to its partner for a given price. This allows the other brand to have access to various assets to improve its products or service offerings
- Collaborative – In this case, brands come to a decision to move forward with the licensing partnership and work together with the partner aggressively. This has a close association with joint product partnerships where a company may utilize another’s product and brand image to provide an exclusive or unique offering.
There are many ways a company who licenses another’s brand can utilize it. After purchasing the right to use their partner’s brand, they can work on the logo of the other company or brand images such as colors, fonts, or reputation, or culture, or design, etc. This is a quicker and more efficient way to get hooked on to a popular brand and this is positive for both the brands, in general.
One such example is as shown below where a FinTech company PaisaBazaar uses Experian logo in its advertising campaign.
Similarly, Uber carries the logo of Spotify as shown in the below example-
Another such example is Jet Airways app along with Apple app store. This is primarily a Jet Airways advertisement making use of the Apple logo.
This is a retention marketing method that provides customers with a reward for bigger usage. A loyalty partnership boosts the usual model by offering consumers partner offers to persuade longevity and purchase frequency.
This can be broadly divided into three categories, each of which relates to how consumers are loyal to a brand as mentioned below:
- Frequency– In this, loyalty can be rewarded based on the frequency of customer use; the more a product is bought, or a service used, the more rewards a consumer receives. A reward can be a brand discount offered by the partner.Smart brands take it a notch further by personalizing and providing an offer in conjunction with a partner brand tailored to the consumer needs based on their spending patterns or personal profile.
- Volume– An alternative is to give reward based on the amount purchased; the higher the purchase quantity is, the larger would be the reward. Savvy brands give different levels of reward to those who purchase larger amounts, often personalizing the offer completely.
- Advocate– The third type is often described as advocacy, where customers are so loyal to a brand that they will support and promote it with the brand offering extended rewards to them. It is a type of loyalty that puts emphasis on rewarding those select customers who shout about a brand and even boast of the power to persuade and/or manipulate others in favor of the brand.
This type of co-marketing can be carried out in several ways such as via loyalty vouchers/cards, loyalty scheme/club, one-off reward, seasonal promotions, free money, gifts, etc. All of these present the prospect for partner brand involvement, mostly by including their exclusive products or discounts within the loyalty program. As a procedure, it permits two brands to line up their proposition with each other fruitfully by utilizing their similar databases to boost customer retention rates.
One such example is as shown below where a popular biscuit company (Hide&Seek) provides Paytm (a digital wallet) coupon.
This could just be a flash sale on any of the products-
Other alternatives include incentives such as cashback as shown below in FirstCry
This includes delicate positioning of the product within a media channel. It is a combination of advertisement and sponsorship that works in partnership with high grossing film and TV productions. This can be done in the below mentioned ways:
- Subtle placement– This focuses on the addition of the brand logo, a subtle hint towards the usage of a product, or the product’s background shot, which can be found in film and television scenes.
- Direct advertising– This is more of a direct approach that involves a more noticeable placement advertising within a media program, such as a cooking show giving its endorsement for a product, which is deemed direct.
- Public or celebrity sponsorship – This deal with celebrity endorsements where the stars are encouraged to use a particular product, drive a specific car, or wear clothes of a particular brand, etc. When a brand sends free items to a celebrity,its aim is to get favorable product placement, often via social media, paparazzi shots, and the items’ usage in the celebrity’s daily life.
- Free marketing samples – This involves attaching small samples along with newspapers or magazines. The main intention here is to give people a feel of how the product will be. This is beneficial since it also, in turn, increases the sales of the newspaper or magazine.
Though this is usually a less used co-marketing strategy, there is still a huge market reach one can achieve through this mode.
A good example of this is as shown below, where CocaCola is pitched in a popular reality show “American Idol.”
Similarly, you can see how Nike is being placed strategically in the famous movie “Pain and Gain” as depicted below.
The YouTube video below shows yet another example where Nike’s Air Jordan’s appeared in the film White House Down (2013). The scene where it appears is when the U.S. President (the role being played by Jamie Foxx) gets involved in hand-to-hand combat with a terrorist and the latter grabs the former’s feet, making him shout “Get your hands off my Jordan’s!”
This is when a partner provides space within its own store, as agreed, for the other partner’s brand. In this case, the primary brand rents out, extends, or provides its retail outlet to combine the secondary brand to offer added value to its customers.
Shared stores co-marketing is a growing trend with some of the biggest names joining hands. However, this isn’t just limited to retail outlets, as you can find it online as well. This can be of two types as mentioned below:
- Offline – This is the most common type of co-marketing and refers to the physical world where retail outlets, petrol stations, coffee shops, and supermarkets have all been found to combine stores.
- Online – This is a comparatively new model but is growing very fast and widely. This is where both the brands look to be associated with each other by merging parts of their websites together through IFraming (also called Inline Framing) or by crafting dedicated sections.
Offline shared stores can be further classified as shown below:
- Store with a store – This is a form of shared store partnership and provides a sector of the primary brand’s retail space for another brand. Below is an example with Starbucks and Cine-world. This adds value to the customer base by offering a supplementary proposition to their shopping experience.
- Permanent desk – This is where a partner brand gets a permanent desk provided by the primary brand. Department stores like John Lewis or Selfridges often provide spots like this in their cosmetics sector.
- Promotional stand – Sometimes, a store will offer some of its floor areas as a promotional stand. This will give a partner brand an exclusive space devoted to its products, often managed by the brand’s own employees.
Similarly, online shared stores can be classified as:
- Dedicated tab or page– This includes providing a page or tab for a partner brand within the website of the primary brand. This provides a devoted region for added value.
- Member’s area– In this, a member’s section provides exclusive content or material. Thus, this is a popular space for partner brands to get featured.
- IFraming– This includes exhibiting a partner’s webpage on your own website. IFraming functions as a window that displays a related section of the partner’s webpage on your website.
What’s immensely advantageous about this type of co-marketing strategy, particularly offline, is that it positions the partner brand physically before customers entering a store. It’s the perfect mode to touch, interact with, and assess a partner brand product. By being beside one another, this builds a powerful perception and with the sharing of retail space, it helps attract new consumers, minimizes total costs, and aids in holding onto the existing ones for a longer period.
Sponsorship based co-marketing is a marketing method of placing a brand alongside a specific occasion, showcasing itself as a supporter or partner, with the aim of growing brand reputation and recognition. This is an old form of co-marketing and has been around for long.
This can be done in one of the below mentioned ways:
- Awareness – The key focus here is to line up a product next to an event to get mass exposure, which is the most wide spread category of sponsorship. The aim is to have the biggest possible reach of your brand to both new and existing customers.
- Association – This includes linking the product with a person, cause, or occasion to offer brand association in the eyes of the customer. Every time the customer thinks of that event,s/he will link that with the sponsored brand as well.
- Consumer understanding – Sponsorship can connect a brand proposition with an event in such a way that it offers product education to the customer. Since some propositions are more complicated than others, sponsorship is considered an effective mode to teach a customer what the product can bring to the table.
This can typically be a media sponsorship, sporting sponsorship, event sponsorship, charity events, the seal of approval, etc. For decades, global brands like McDonald’s, Coca-Cola, Red Bull, Pepsi, and British Airways – to name a few, have been pouring billions of marketing dollars into sponsorships, the reasons for which are ample. They boost brand awareness, augment brand reach, improve brand trust, improve product understanding, revolutionize a brand’s image or value proposition, and open new local or global markets.
An example of such sponsorship can be as seen below where VIVO has partnered for IPL.
Another such example is as shown below-
Given below is yet another example which shows ICC’s (International Cricket Council) 5-year global partnership deal with Coca-Cola starting from the 2019 ICC Cricket World Cup.
This completes our different categorization of co-marketing to reach new customers. Before we conclude, let’s look at the common jargons used in co-marketing and understand the significance of each.
- In partnership with – This is the trendiest phrase used to portray the relationship with another brand. This means both the secondary and primary brands will leverage the advantage, which, in turn, will finally benefit the end customer.
- Supported by – This is commonly used for charitable partnerships. This happens where one brand supports or assists the other in a campaign. It depicts a component of comfort towards a customer by showing that the cause is supported by a reputable brand.
- Certified by – This provides a certain level of authenticity to the joint venture. The “certified by” phrase delivers trust to the customers by making them aware that the offering is supported by the supporting brand.
- Incorporating – This generally means ‘together with.’ If a major brand is incorporating the proposition of a secondary brand within its own, it indicates the fact that it’s providing its services as an add-on or supplementary.
- Powered by – This often refers to the existence of a partner brand supplying its services to help other merchandise. An example of this is the Nexus phone which is promoted as being ‘Powered by’ Google. This kind of partnership eventually benefits the customer with a far superior product by leveraging both the technologies.
- In association with – This is generally used when both brands have an equivalent role to play in the joint venture. The term “association” indicates that both brands have decided to work toward a mutual partnership offering.
Finally, to conclude, we have given a detailed walkthrough of the different strategies used in co-marketing. Some of these are in the market for years, while the others are techniques that are relatively newer to the market. All these techniques provide a win-win situation for the brands and have immense potential to reach out to existing as well as new customers. The kind of co-marketing that will work out for you depends on the product, market reach, geographical region, and finally, your own innovative techniques. Click To TweetSo, if you aren’t using this technique yet, get started with your co-marketing campaigns today!
There’s a misconception where co-branding is taken to mean the same thing as co-marketing. To begin with, these are quite similar.
Co-branding stands for a partnership where two (or more) companies combine their expertise or products to create an even more precious offer or product. Thus, you can say co-branding eventually results in the formation of a new product.
However, this is not the case with co-marketing as it doesn’t involve the creation of anew product. Rather, a company using it only leverages the positives of the other products to market its own products.
Do they have a similar set of audience that my company has or wants to grow?
How many leads can this partnership bring my way? Will it be adequate to be worth my time and effort?
Do they have additional (or other) expertise that I lack?
Does the brand enjoy a good reputation?
Are they enjoyable to work with?
How much will this cost me?
Does the other brand agree on a common topic and the timelines required for co-marketing?
Affiliation – Affiliation marketing is a co-marketing technique where websites otherwise known as publishers will promote your product or services in return for some monetary rewards
Content – A content partnership helps in the development of such content in collaboration with a partner brand. This can be done possibly in two ways:
Co-creation – Both the brands collaborate to work towards creating a common content. This could be market research, product release, etc.
Link Sharing – Link sharing means linking to the partner’s site from their own site.
Distribution – This is a strategic partnership, where one brand concurs to bundle or cross-market the product of its partner. This can happen in two ways:
Bundling – This includes one partner offering goodies such as online bundle for a purchase or promotion within the product like give a ways in the package, buy one get one free, etc.
Cross-Marketing – This is done by marketing both products via a distribution channel. In this case, rather than including the product within the packaging, the brand offers marketing opportunities to its partner within the distribution.
CSR – Primary brand sponsors or markets itself via a charitable organization or a cause.
& Many more as you might have already read in the article. If not, please read the full article