The concept of “partnerships” has been part of doing business since, well, just about the beginning of any type of commerce—for example, producers teamed up with distributors such as shipping fleets to get products to consumers. We’ve come a long way from those days. Like everything else in commerce (and beyond), the internet took partnerships into new territory.
In the web’s early days, partnerships based on traditional affiliate marketing emerged—and thrived—because they gave brands the ability to pay for actual sales vs. just impressions or clicks. With no upfront marketing cost, affiliate marketing promised big returns with little investment because publishers would promote products and services in exchange for a cut of the sale price. But as affiliate networks boomed in the late 90s and early 2000s, online brands began to lose control and visibility into their partnerships.
Since then, the digital age has ushered in new partnership models that focus more on referrals than transactions. For example, social influencers, ambassadors, and media houses now enable brands to reach any target audience in the moment of need. These partners boost not only awareness but also drive big revenue for a brand through referral traffic.
With success came diversification
At Impact, we witnessed this trend grow quickly and organically as our customers began spontaneously to use our platform to manage partners that didn’t fit neatly into the affiliate category.
In the last few years, this trend has accelerated, with brands telling us how they were using our platform to track all sorts of lucrative partners under the affiliate payout framework. And it wasn’t just the nature of the exchange that was shifting. Relationships between partners and companies using technology for partnership innovation also seemed richer and deeper than typical—more like true partners than a transactional relationship. Realizing that the world of traditional affiliate marketing was capped, they no longer limited their roles to traditional discount-based tactics common to coupon, reward, cashback, and loyalty affiliate sites.
Director of Partnerships role emerges. What’s next? Chief Partnership Officer
The revenue-driving value of this new model was undeniable, and it was manifesting in very fundamental ways. For example, we noticed that more and more of our clients were taking on titles such as “VP of Growth” or “Director of Partnerships & Affiliates” because they were driving unprecedented growth by going after partnerships outside their original roles. When the C-suite welcomes a new member, you know there’s money being made.
Today, these key relationships are so entrenched in the online economy that we simply call them partners, and the ecosystem they inhabit is now known as the Partnership EconomyTM.
In this environment, a successful partnership channel can contribute up to 28% (on average) of overall corporate revenues—more than what paid search contributes (about 18% on average). For the average company, it’s worth about $162MM more revenue annually versus companies that don’t focus on their partnership channel.
The challenge ahead
While the benefits are clear, partnership success demands that companies think outside the box to attract and retain a diverse portfolio of partners. It also requires investments in technologies to support the partner management life cycle, which just 25% or fewer companies feel they have optimized across any given phase, according to a commissioned study conducted by Forrester Consulting on behalf of Impact*.
The study surveyed 454 customers from major markets all around the world, many of whom see their top priority as implementing technology to optimize partnership program execution and measurement.
You can learn more about the emergence of the Partnership Economy and the powerful forces driving its growth in Forrester’s report, Invest in Partnerships to Drive Growth and Competitive Advantage. (Want to talk now? Contact us at firstname.lastname@example.org.)
*Invest in Partnerships to Drive Growth and Competitive Advantage, a commissioned study conducted by Forrester Consulting on behalf of Impact Tech, May 2019