Partnership is an important and growing segment of performance marketing, driving a significant portion of sales and investment from business leaders. With the majority of companies reporting that partnerships now drive more than a fifth of their sales, it’s clear that this highly efficient business channel is now a critical part of many quantitative marketing plans.
Virtually all brands pursue some forms of partnership, and view it as a high priority. As to how people manage and talk about the industry, we appear to be in a period of flux, with no management approach or nomenclature dominating the space. That said, the passion and interest in partnership solutions among business leaders is high.
Research findings pointed to a number of specific key takeaways and potential marketing efforts:
Virtually all companies surveyed are already active in partnerships and affiliate, and most of the people who don't yet have partner programs plan to introduce them in the next 12 months as part of their marketing strategies.
Partnerships are playing a key role in driving revenue for many of the world's leading consumer companies. More than half of our sample (54%) reported that partnerships drive more than 20% of total company revenue. Partnerships are a high priority for companies. 74% report that partnerships are a high or very high priority for their businesses. Just 5% say they will invest less on partnerships this year versus last year.
More than half of respondents say partnerships are driving more sales this year than last year. Just 1% say partnership sales have declined for their businesses. The top brand leader priorities include finding more partners (27%) and strengthening relationships with existing partners (23%,) two key growth strategies for the channel.
Partnerships are viewed as a key potential growth channel. A massive 69% of respondents see additional product sales potential in the channel, and 24% see massive incremental potential. Many leading brands are prioritizing large partners versus forging agreements with thousands of potential partners. The most common number of partners for a brand is 50-99 (34%). 67% of brands report having less than 100 total partners. Just 2% of brands surveyed partner with more than 1,000 businesses.
Many brands report significant revenue coming from "emerging" partnership channels like influencers (14%), and brand-to-brand partnerships (9%). While traditional affiliate-style partners drive more sales than other channels (36% for "traditional" partners like loyalty communities and 10% long-tail publishers), strong sales for these emerging channels proves the theory that the category and definition of partnership is broadening.
Networks and third-party software are commonly used to field and manage partnerships. Because partnership is broader than just affiliate marketing, only about half of our marketers report relying on networks for partnerships. Just over half (52%) of the brand leaders surveyed say they work with an affiliate network to manage partnerships. One third of those who work with a network work with them exclusively, while just over half also work with third-party partner management software like that offered by Partnerize. About a fifth of marketers eschew networks and work exclusively with third-party software
The terminology used in the partnerships arena is in flux. The vast majority of our respondents (84%) are familiar with the term affiliate marketing. Most view affiliate and partnership as related categories. Across the industry, we've seen growing acceptance of the idea that partnership is a broad category that includes affiliate. About four in ten (41%) of respondents agreed with this assertion - the most common POV.
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