Partnerships for ecommerce brands result in greater reach, lower cost, and more revenue
Brands hit many roadblocks with advertising. Browsers continue tightening regulations, more retailers pop up online daily, and users ignore ads. According to ad filtering technology company eyeo, 225 million people worldwide filter ads.
But how do you regain the trust of consumers? Thought leaders like David Yovanno, CEO of impact.com, believe partnerships are the key to establishing trust with customers: “Partnerships hinge upon garnering a trusted, positive reaction from audiences, which is key to the beginning (and maintenance) of any impactful relationship.”
Partnerships are a promising revenue channel for ecommerce brands. Once you understand how they work, you can use these relationships to tap into a wealth of growth opportunities.
Why are people on the internet to begin with?
Unsurprisingly, people seek three basic things online — entertainment, information, and connection. Consumers don’t want to see ads online. They prefer to discover new and exciting things on their own. The top five reasons people use the internet are:
- Finding information
- Staying in touch with friends and family
- Keeping up to date with news and events
- Watching videos, TV shows, and movies
- Researching how to do things
Almost half of the respondents use the internet to search for products and brands. These behaviors show consumers want more control over online experiences. For this reason, brands need to rethink how they reach and attract consumers on the web.
The buyer’s journey has evolved
In the past, consumers became aware of a product from advertisements or PR placements on television, radio, newspapers, and magazines. With the advent of the internet came digital pop-up ads that were often disruptive and intrusive. A whopping 96% of people say they don’t trust ads.
With the increasing use of the internet, the way consumers find, research, and buy products has changed completely. Shoppers can access many more channels to discover products,
Someone looking to purchase an expensive fitness watch doesn’t just click an ad to purchase. They check review sites and social media platforms to see what others say about the gadgets. They may even hunt for discounts and deals. Roughly 70% of online shoppers read between one and six reviews before purchasing — and 40% buy a product after seeing it on social media.
As a brand leader, you want to showcase products authentically. Digital advertising campaigns don’t always reach a target audience with the right messaging. Enter partnerships — an innovative and less invasive model for driving business growth.
Gain a competitive advantage with partnerships in your marketing mix
What is partnership marketing?
Partnership marketing is a strategic collaboration between two parties — typically two businesses or a business with an individual. This relationship introduces a brand to a partner’s customers or audiences. Both parties benefit by reaching shared business goals.
The top benefits of partnership marketing
A study by impact.com and Forrester asked over 400 professionals about the benefits of a partnership program. Here are a few insights:
- Increased revenue. According to Wolfgang Digital’s 2019 KPI report, the average business generates 18% of its revenue from paid search, while high-maturity partnership programs contribute 28% of overall company revenue.
- Increased brand awareness. Partnerships with highly influential publishers and brands allow companies to build awareness and equity.
- Improved customer retention. Partnerships allow brands to reach customers more frequently, stay top of mind, and encourage repeat purchases.
- Higher market share. Unique partnerships give companies first-mover advantages that capture market share faster than the competition.
- Increased conversion rates. Partnerships often drive highly relevant, high-intent visitors who are more likely to convert than on other channels.
Another advantage of partnerships is the low customer acquisition cost (CAC). Partnerships take advantage of existing connections with customers — which makes acquiring customers more cost-effective. For instance, the investment banking app M1 Finance achieved a 50% lower cost per quality user with partnerships versus paid search.
Types of partnership marketing that work for ecommerce brands
Affiliate marketing boosts sales and return on ad spend (ROAS)
Affiliate partnerships involve two parties:
- The affiliate. This can include coupon and loyalty sites, shopping and comparison websites, product review sites, blogs, and niche or mainstream content sites.
- The advertiser. This is the brand or merchant site that pays the affiliate to promote its services.
Steps in the affiliate process:
- An affiliate joins a brand’s affiliate program.
- The brand provides the affiliate with unique tracking links.
- The affiliate promotes the brand using these links.
- The affiliate can add links to their email campaigns, website, social profiles, and other promotional avenues.
- Consumers click on these links, which direct them to the brand’s website to make a purchase.
- The brand pays the affiliate commission for any consumer purchase.
The power of affiliate marketing continues to gain momentum. For instance, plant-based meal kit service Purple Carrot created an affiliate program that soared. The program reached a 68% increase in orders and a 30% increase in return on ad spend (ROAS) compared to the previous quarter.
Influencer marketing — small audience equals better engagement
Influencer marketing refers to brands collaborating with influencers and creators. Influencers can be celebrities, authors, speakers, or someone who impacts decision-making or sentiment. A creator is simply someone who creates content — whether written, image-based, video, or a combination.
The majority of surveyed influencers (54%) identified as “content creators,” and only 32% identified as “lifestyle influencers.” Working with creators and influencers can send qualified traffic to your website, boost brand awareness, and impact purchasing decisions through product placements on social media.
Influencers with smaller followings are more popular than big-scale influencers. Here’s the breakdown:
You don’t need expensive celebrities to build great influencer campaigns. Small-scale creators also bring in increased revenue, online clicks, and conversions at a fraction of the cost.
Take Ellos, an ecommerce site for fashion and home furnishings. The brand partnered with micro-influencers to gain a revenue increase of 78% for its Swedish branches. In Norway, online clicks rocketed by 475%. Ellos also reached over 2 million impressions for its entire website.
Source: @kine.tholm, Instagram
Since small-scale influencers have fewer followers, they have more time to engage with audiences. Micro-influencers drive 60% higher campaign engagement rates than macro-influencers.
Vita Clausen, global PR and influencer director at Pandora, explains, “If you work with micro-and nano-influencers, you have a higher engagement than when working with a mega- or macro-influencer. The higher you go in the influencer pyramid, the more awareness you get, but the engagement goes down.”
Clausen further explains how influencers with smaller followings appear more genuine than big-scale influencers: “Nano-influencers bring that extra authenticity to the brand because consumers can see how much they love the brand.”
How partnerships help brands drive more revenue
According to a Forrester study, brands with high-maturity partnership programs drive revenue growth two times faster than companies with low-maturity programs. The same companies said partnerships gave them a competitive advantage, and 76% stated partnerships were vital in reaching revenue goals.
Cristy Garcia, CMO at impact.com, highlights the advantages of partnerships for businesses: “From a business point of view, working with referral partners helps to capture demand, enhance customer experience, enable innovation, yield high ROI, allow brands to acquire new customers and crucially, to create competitive advantage.”
Ecommerce businesses can thrive with a partnership program
The partnerships channel offers a real opportunity to grow your business. By investing in partnerships, you gain customers’ trust, increase revenue, and meet customers at the right stage.
That said, it may feel overwhelming to implement and manage partnerships. Where does your team find the time? Fortunately, partnership management platforms streamline partnership workflows across all partnership types, including affiliate and influencer marketing.
With partnership management platforms, you can quickly scale your program. This opens more opportunities to make partnerships the fastest growing revenue stream within your business.
If you’re ready to kick off a successful partnership marketing program, check out impact.com’s app listing on Adobe Commerce. Integrate the Adobe Commerce platform with impact.com’s platform to make facilitating partnerships a breeze.
Blaire McClure is a product marketing manager at impact.com, where she focuses on product-led growth, ecommerce, and technology partnerships.