To illustrate the effectiveness of partnership marketing, let’s start with a simple question. Would you rather:
- Pay $100 for an ad placement that yields 1000 advertising impressions but only 5 sales?
- Offer a marketing partner $10 per completed sale, leading to 10 sales for $100 each?
It doesn’t take someone with an MBA to know you should choose the second option. This is the crucial advantage partnership marketing has over similar data-driven models under the umbrella of performance-based marketing. With many forms of performance-based marketing, you can measure the effectiveness of your advertisement only by analyzing campaign data retroactively, rather than paying for only the outcomes you seek. The structure allows you to make small adjustments and smarter decisions in the future, but you still end up paying for poor results if a campaign underperforms. Brands don’t have any guarantees in many channels of performance marketing—they can only learn from their mistakes.
In contrast, in partnership marketing, you only have to pay for what works best according to your definition of success. Rather than investing upfront and hoping for the best, you pay an agreed-upon percentage or fee billed only after you have obtained the desired outcome. And because partners get paid according to those same metrics, it is in their best interests to deliver the best outcomes. The incentives of brands and partners are aligned.
Key takeaways: - Partnership marketing is a powerful, scalable, sustainable channel brands can use to grow their business
- Partnership marketing creates an incentive alignment between brands and partners driving mutually beneficial, agreed-upon outcomes
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