Online partnerships refers to the creation and management of long-term arrangements to promote your online services on third-party websites or through email. Different forms of partnerships include link building, affiliate marketing, aggregators such as price comparison sites, online sponsorship and co-branding.
Partnerships are an important part of today’s marketing mix. The same is true online. Resources must be devoted to managing your online partners. Many large organisations have specific staff to manage these relationships. In smaller organisations partnership management is often neglected, which is a missed opportunity. These are three types of online partnerships which need to be managed: link building, affiliate marketing and online sponsorship. All should be involved in structured approach to managing links through to a site. The main and most important from all partnership marketing for transactional e-commerce sites is affiliate marketing. Other forms of digital marketing communications, which are often free in terms of visitors generated, can also be considered as partner marketing, for example online PR, link-building and use of Web 2.0 syndication.
The discussion revolves around the value of affiliate marketing in generating incremental sales. It can generate more sales at a controlled cost, however, the question is: whether these sales would have occurred anyway if a brand is well know. For example: Amazon has an affiliate programme but it could be argued that its brand is so well know and it has such a large customer base that it would receive sales anyway. However, Amazon has run its programme for over ten years and although it has reduced commissions, it is still running and is used to promote new product offerings such as music downloads.
Ryan and Whiteman (2000) define online sponsorship as:
The linking of brand with related content or context for the purpose of creating brand awareness and strengthening brand appeal in a form that is clearly distinguished from a banner, button or other standardised ad unit.
For advertiser, online sponsorship has the benefit that their name is associated with an online brand that the site visitor is already familiar with. So, for users of publisher site, with whom they are familiar, sponsorship builds on this existing relationship and trust.
Paid-for sponsorship of another site, or part of it, especially a portal, for an extended period is another way to develop permanent links. Co-branding is a lower-cost method of sponsorship and can exploit synergies between different companies. Note that sponsorship does not have to directly drive visitors to a brand site – it may be more effective if interaction occurs on the media owner’s microsite.
A great B2B example of online sponsorship is often by WebTrends which sponsors the customer information channel on ClickZ.com (clickz.com/experts). They combined this sponsorship with different ads each month offering the chance to learn about different topics such as search marketing, retention and conversion marketing through detailed white papers and a ‘Take 10’ online video presentation by industry experts which could be downloaded by registered users. The objective of these ads was to encourage prospects to subscribe to the newsletter and to assess purchase intent at sign-up enabling follow-up telemarketing by regional distributors.
Co-branding and contra-deals
Co-branding of sites or emails are closely related to online sponsorship. These contra-deals, as they are sometimes referred to, typically occur where there is an association between two brands and they are complementary but not competitive. For example, one online publisher may offer subscribers the chance to sign-up with newsletters from another company, a process known as ‘co-registration’.
Co-branding can be a cost effective form of online marketing, but specific resources such as ‘online partnership manager’ has to be put in place to set up and manage the relationships between partners. This will often be part of affiliate manager’s role.
Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation and practice (Vol. 5). Harlow: Pearson.
Affiliate marketing is a ‘pay-per-performance’ method. It’s a commision-based arrangement where the merchant pays when they make the sale or get a lead.
The main benefits of affiliate marketing are: SERPs visibility, responsiveness to marketplace changes, generate awareness.
We will review how affiliate networks can be used to improve the results from affiliate marketing and the main controls on affiliate marketing.