Partnership Rising: How Partnership Will Gain a Seat at the CMO’s Table in 2021

Nov 11, 2020
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2020 has been an unusual year, to say the least. There are so many aspects of consumer lives that have profoundly changed in the past 12 months. Owing to its focus on meeting consumer needs, marketing and “what works” have also changed dramatically. In their seminal report, The Quickening, McKinsey showed that consumer adoption of ecommerce actually doubled in just the first three months of 2020. Further, the same report said that 75% of consumers have tried different retailers and websites during the period, and 60% say they will incorporate new brands into their post COVID-19 lives.

 

Sector Differences

The impact of COVID-19 on major partnership sectors has varied. Travel, of course, has faced unprecedented challenges. By contrast, many retailers report significant digital sales gains as shoppers altered their behaviors in light of store closings and social distancing. Further, as brands have faced new distribution and other challenges, many marketers report tighter budgets, making the need to find more effective and lower risk tactics for reaching and converting consumers.

 

Acceleration of Long-Term Trends

Much of the impact of the global pandemic has been to accelerate trends that have been altering the face of commerce for years. eCommerce penetration has been growing for the better part of two decades – it just took COVID to accelerate that rate of change. Similarly, there is growing marketer awareness of their dependence on a small number of tech companies for media access to consumers. Paid Search and Paid Social now capture an enormous share of total marketing spend, and the long term implication has been rising rates. Further compounding this is the challenge of consumer control of their personal media experience.

Additionally, mobile commerce continues to grow its share of total ecommerce, reaching an astounding 70% in 2020 according to Statista.  Even in the US, where ecommerce has historically been less important than in other regions, more than 80% of consumers report using their phones for at least some stages of shopping. What that means for marketers is more media outlets, more audience fragmentation, and the very real need to identify trackable and efficacious contact strategies across a panoply of devices.

 
Partnership as the Alternative

As brand marketers examine their own businesses and investments, we are seeing greater interest and emphasis on partner marketing. The reasons are simple. Performance partnerships are:

  • Highly scalable, and have an uninterrupted trajectory of more than 15 years of increasing sales
  • Diverse, which gives brands diversified revenue streams and reduce their dependency on the big four media companies that control the majority of CPM- and CPC-based media
  • Pay-for-performance, which enables brands to lower their marketing risk profile

Add these advantages to the fact that affiliate and partnership re the most efficient paid digital marketing tactic and you have a recipe for marketing’s greatest asset. These and other channel strengths actually give marketers leverage in a media environment where a lot of the prevailing forces are stacked against them.

As we look to 2021, expect to see partnership continue evolving from a niche tactic to one that is a primary sales driver for leading brands. A 2018 study we fielded with 1,200 digital marketers in the retail, travel and finance industries worldwide showed that 96% of brands leveraged partnership programs. The same study showed that 54% of brands drive more than 30% of their total sales from the channel.

Those statistics point to the ubiquity of partnership, but partnership has traditionally been viewed as a niche channel. Part of the reason for this is that the data available form things like affiliate and influencer programs were limited and delayed, so partnership could not be fully incorporated into marketing decision modeling and decisioning.

But technology platforms are now available to close the gap, and we are seeing more and more companies leverage APIs from these tools to ingest partnership performance data into cross-channel BI and attribution systems. For a growing number of CMOs, partnership data are now just as available as information from any other channel.

 
Change in Marketer Attitudes

That took technological change, but it also was made possible by growing demand for insights into the channel from senior marketers.  Savvy marketers understand the need to focus additional attention on this fast-growing channel, as well as the need for better measurement and optimization. As digital commerce and partnership continue to break sales record, and as other media opportunities become risky and costly, it’s natural that marketers are investing more in partnership and devoting more of their own attention to programs and their success.

 
Conclusion

What’s clear is that a variety of forces are radically changing the role that partnership plays for brands, and their interest in it. In 2020, we’re going to see many companies (finally) give partnership a seat at the CMO’s table.

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