Adam Furness is managing director APAC at Impact.
Marketers and brands mapping out their customer acquisition strategy have more than a couple of roadblocks to navigate this year.
Firstly, it’s finally time to say goodbye to the cookie as Google phases them out by the end of the year (and has just confirmed it won’t be building alternate identifiers) and Apple is effectively set to block them altogether by giving consumers more control when iOS 14 is introduced. Like them or loathe them, digital advertising has largely been built upon them so it means a reasonable amount of pivoting for most brands.
And on the subject of ‘like them or loathe them’, the Facebook and Google duopoly continues to dominate and control digital advertising. Last year’s Australian Competition and Consumer Commission report found that in 2019 for every $100 spent by advertisers, $53 went to Google, $28 to Facebook and $19 to all other websites and adtech. This means there’s few alternatives to the walled gardens when cost per click and customer acquisition costs soar. The recent stoush between Facebook and the Morrison government, along with News Corp’s deal with Google, further illustrates their current omnipotence.
However, the biggest problem is the general attitude of consumers towards digital advertising. Which is that they pretty much hate it. And who can blame them? We’ve all been followed around the web by a pair of trainers we looked at once, or ‘enjoyed’ slow page load times thanks to an intrusive home page takeover ad campaign. At best digital ads are tolerated in return for free content but more and more people are choosing to block them altogether. Concerns around the use of consumer data have risen after being thrown into the spotlight by things like government enquiries and Netflix’s documentary The Social Dilemma. Trust is most certainly on the wane and consumers are increasingly being turned-off by digital ads – or in fact turning them off.
Faced with these challenges, brands are seeking new ways to acquire customers with many turning to performance partnerships. So much so, Deloitte’s Global Marketing Trends report listed partnerships (under the heading ‘Fuse’) as one of their key seven trends for 2021.
This is because performance-based partnerships - whether they are strategic brand-to-brand partnerships or partnerships with social media influencers, premium publishers, third-party referrals or charity collaborations - can help brands build authenticity, better customer experiences and incremental revenue.
Declining trust in traditional advertising means consumers are searching for authenticity and connection. Word-of-mouth and real-life conversations have a significant impact on purchase decisions. Nielsen’s recent Syndicated Real Life versus Digital Life Report noted 58% say real life conversations make an impact on their purchasing decisions and almost half (46%) said social media made an impact on purchasing decisions. This has helped fuel the influencer industry who are seen as trusted friends and advisors by their audiences. When they recommend a brand or product that seems authentic to the influencers lifestyle, consumers have similar levels of trust to that of a personal friend. It’s the same story when complimentary brands work together. If a customer is already a fan of one brand they are likely to be more receptive to the partner brand; it’s a halo effect that can raise brand equity and awareness for both. Streaming service Binge is a great example of a new brand using innovative partnerships to establish credibility. In the peak of last year’s COVID-19 lockdown, and only a few weeks after the service launched, they partnered with online retailer, The Iconic to offer a collection of ‘inactive wear’. A smart and witty way to grab attention.
The Binge example also demonstrates how partnerships can help brands deliver genuine moments that matter for customers, whilst addressing specific needs and wants. In the Deloitte Global Marketing Trends report it is observed that “organisations have an opportunity to completely reimagine partnership strategies that open the aperture for solutions for the people they serve.” Uber and Dettol’s partnership during the pandemic did just this, benefiting customers and employees alike by thinking outside of traditional industry boundaries. The right partnerships can create an enhanced customer experience and keep customers loyal and engaged.
Critically, partnerships are beginning to have a real impact on a brand’s bottom line – as well as providing additional revenue for their partners. Put simply, brands are leveraging someone else’s audience to drive acquisitions. It’s also incredibly easy and transparent to manage, contract and reward partners at scale using partnership automation technology which offers marketers the ability to immediately see which partners are performing and make the necessary adjustments. One of our customers, Canva, for example, used Impact’s technology to build a 12,000+ diverse network of referral partners in just six months from a standing start, with its new partnership programme set to contribute five percent of total revenue after just one year.
Getting the right technology in place at the back end is absolutely vital to manage and optimise a programme, but the partnership channel is actually more human and relationship-oriented than any previous growth channel. It requires imagination and creativity from marketers to seek out symbiotic audiences and brands, but the rewards for those who get it right are there to be had.