Facing the new digital environment of ecommerce, a lot of brands and advertisers have realized that a majority of their old sales and marketing techniques are no longer effective. What’s more, the many different mobile devices and media platforms now used by consumers worldwide have fragmented the marketplace significantly, which has made it harder for advertisers to reach their audience at the right time and in the right place.
Gone are the days of appointment television and regular radio listening schedules. The on-demand environment of new media also reflects how consumer go about purchasing their products online.
Instead of spending more and more money on wider marketing campaigns, brands have realized that it might be beneficial to collaborate with other brands – especially if target audiences and interests seem to be a perfect match.
David K. Williams, a Forbes contributor, put it best when he said that collaborative marketing “is the process of aligning your company’s interests, resources, and marketing muscle with other like-minded companies to accomplish much more than you might be able to do on your own.”
Most importantly, it allows marketers to combine advertising budgets and, as a result, get much more “bang for their buck.” Collaborative marketing strategies can be established between as little as two partners, or as many as a hundred (or more) if they are open to the coordination challenges that might come with it.
The Impact on the Ecommerce Business
The most interesting development of collaborative marketing in the online ecommerce environment is that partnerships are no longer restricted to same-size brands. Now, large brands like Coca-Cola are looking beyond their big partnerships with media giants like “American Idol” and are starting to build relationships with smaller companies and social media influencers.
These new partnerships have a very unique value proposition, which is credibility – on both sides! Getting a large brand partner is, without a doubt, a huge upward push for the credibility of small companies; because if a big corporation is interested in doing business with them, they must have something that is valuable to consumers.
On the other end, large brands might not always have the “street cred” that smaller, independent companies enjoy. So a small business partnering with a large brand can act like a reverse endorsement, and help big advertisers tap into a niche audience they, until then, were not able to reach through any of their existing marketing channels.
In short, collaborative marketing can help increase brand recognition, customer value, and customer retention on both sides.
This type of “credibility exchange” can happen especially on ecommerce sites like Etsy, where there is an abundance of niche artists and small businesses.
Both partners in a relationship between a small and big business have different interests. While the larger company is oftentimes more concerned about the “street cred” factor, the smaller company is first and foremost interested in gaining exposure and getting more visibility in the mainstream market.
This is exactly what David K. Williams was referring to when he described the process “of aligning your company’s interests, resources, and marketing muscle with other like-minded companies.”
These types of partnerships, which give smaller companies more exposure through a bigger company’s established network, have become possible – and more realistic – in the age of the Internet and ecommerce because all companies find themselves on the same level playing field. Now, geographical distances and the resulting distribution muscle of larger brands are no longer a deciding factor.
In some cases, larger brands or distributors can act as sort of an umbrella merchant that helps all of its small brand partners gain credibility, reach larger audience segments, and create a better customer experience.
Amazon is a great example. The online retailer’s massive customer base, stable merchant processing technology, global customer service, well-oiled customer feedback machine, and sheer size of its infrastructure are all things that small businesses could not afford on their own.
However, Amazon could not be as big as it is today without all of its business partners – large or small. Not only do they contribute to the size of Amazon’s product catalog, but every single seller is interested in promoting their products to their individual markets, which in turn provides Amazon with even more exposure.
Collaborative marketing, it turns out, is the perfect marketing tool that came at the right time for a new, global ecommerce economy.