Co-marketing seems to be the up and coming trend in the business world with more and more companies adopting the strategy. Many companies have already been successful, like the collaboration between Virgin America and Netflix which demonstrates the positive effect it can have on your businesses brand. This article explains what co-marketing is and its effects on the business world.
What is Co-Marketing?
With many different interpretations of co-marketing, it is ultimately a term used to describe the collaboration of two companies on a promotional project through co-branding. In a co-marketing relationship, both companies promote a piece of content or product and share the results of the promotion. Co-marketing is a way of reducing the work and expense of a marketing campaign while sharing the reward. Companies tend to go to this option if they are looking to reduce costs while also building awareness of both brands involved.
Co-Marketing vs Co-Branding
While co-marketing and co-branding are very similar, they do differ slightly. Co-branding uses two (or more) brand names on a single product or service while co-marketing does not involve the creation of a new product, instead the brands look for ways to effectively share their customers and build awareness for both brands. For example, Uber and Spotify recently worked together in a co-marketing ploy by combining their services allowing users to control the drivers sound system from their phones. While giving both of their brands more exposure, this collaboration has also added value to the customers’ experience.
As previously mentioned, co-branding operates in a slightly different way by altering the visibility and sentiments associated with each existing brand while also including unique brand identifiers separating the two from each other. It combines their market reach while brand partners have the chance to engage the public more into their brand. A well-known example is the partnership between GoPro and Red Bull whereby Red Bull sponsored events that use GoPros. By establishing themselves as lifestyle brands, both link well together as they share the same values making them a good pairing to adopt the co-branding strategy.
Why do Companies do Co-Marketing?
Many companies long term goals involve company growth as well as raising profits. Therefore many businesses view co-marketing as a way of reaching these targets. Additionally, companies may link co-branding with a new product release as the companies can work together to develop a strong advertising campaign neither could afford on their own. Nevertheless, a business has the possibility to benefit from co-marketing at any point in in its life cycle. Additionally, partners do not have to share the same goals as it may even allow them to reach a different customer base.
This technique may also be beneficial for a struggling brand. If one brand is really struggling, but the other in a co-marketing situation is really successful, then the struggling brand can get a boost to their reputation from this marketing effort. Each brand is also able to invest their best people in this type of marketing strategy, this reduces the need for additional employees and well as cutting costs. It also eliminates the need for outsourcing, making the business more efficient across many levels. Although co-marketing can bring about many benefits for a business, it is important for them to consider some factors that may affect their success. For example, it is important that both companies are clear on the agreements made as the complex relationship between the two firms can result in unnecessary costs
Waitrose and John Lewis
Most recently, John Lewis and Waitrose have collaborated their marketing campaigns while rebranding themselves. This is designed to boost both of their brand exposure and increase the value of the brand. Until very recently, both brands operated as separate businesses. By slowly integrating their services by starting with the service to pick up John Lewis click and collect items in Waitrose stores, eventually, both brands established a joint marketing campaign. This means they should now need only one creative platform for both brands. The result of this recent partnership is unknown at the moment, however, many marketing experts are viewing the move as a smart strategic one. Marketing Week columnist Mark Ritson stated that “no consumers would have drawn a link between Waitrose and John Lewis, to an endorsement structure in which the two companies’ linked names ensure that the brands are now more closely and explicitly aligned in the minds of target consumers.”
This business trend, although used before, many new and small companies are also adopting co-marketing as a way of putting themselves of the map and increasing their brand value.