The partnership industry evolution: 6 ways partner marketing has changed

Partner marketing can be traced back in some form or other to way back before the internet was even invented. We’re serious! 

Shakespeare’s First Folio, which was published in 1623, contained a preface written by his friends. In it, they asked people to buy it and tell their friends to do the same, receiving a dedicated poem in return. Now that sounds pretty similar to a referral agreement to us!

Similarly, in 1760, the Queen of England had a tea set made for her by a potter named Wedgwood. The Wedgwood brand still trades off her Royal approval today – the effects of influencer marketing hard at work!

Okay, okay, so we know these examples are far from the partner marketing that we now know. But that’s kind of the point – the partnership industry is constantly evolving. And you’ll need to make sure you’re keeping up with it if your partner marketing activities are going to be successful. With that in mind, here, we’ll look at the partnership industry evolution and how partner marketing has changed.

How has partner marketing changed?

Digital partner marketing as we now know it all began with an early form of affiliate marketing. There’s a well-known rumour that Amazon invented affiliate marketing, but in reality, the first to conceptualise it was William J. Tobin, founder of PC Flowers and Gifts.

In 1989, Tobin started using Prodigy, the first online information service, to sell his products, paying Prodigy a commission for every sale. By 1993, PC Flowers and Gifts was generating $6 million per year in sales on the Prodigy network – and the rest was history (check out our guide to when affiliate marketing started for the full story)!

Since those early days, partner marketing has gone from strength to strength. The arrival of new technology has driven many of the changes we’ve seen. For instance, it wasn’t until after computer cookies were invented in 1994 that affiliate marketing really took off. And the arrival of social media and new social media platforms have also played their part.

But the partnership industry is evolving all the time. And even in recent years, partner marketing best practices, trends and technologies have shifted massively. In fact, being a successful partnership manager is all about keeping up-to-date with these developments, whether that’s by listening to podcasts, reading blogs or attending events, and accepting that you’ll never stop learning! Which brings us onto…

6 key marketing partnership changes

Here are some of the main marketing partnership changes you’ll have seen recently, which will be shaping the partnership and affiliate marketing landscape in 2022.

1. It’s all about partner ecosystems

Partner ecosystems is a term that refers to cross-industry players collaborating to create solutions. It’s a fairly new concept but one that’s quickly changing the partnership landscape. In fact, according to McKinsey, nearly a third of global sales are predicted to come from ecosystems by 2025!

Ecosystems can look very different depending on the brands and industries involved. An ecosystem could be an app, for instance, or a comparison site. Or it could literally just be a list of companies that a brand collaborates with.

For this reason, we usually prefer to see them as more of an ethos than a tangible thing that’s set in stone. They’re all about acknowledging the vast range of benefits that partnerships can bring to brands, and recognising that they won’t all fit neatly into your existing partner programs.

This is a concept that’s quickly gaining traction – Accenture has predicted that ecosystems could bring $100 trillion worth of value to businesses and wider society over the next 10 years, while Demand Gen’s 2022 Partner Marketing Benchmark Survey revealed that 96% of B2B leaders expect to increase revenue directly attributed to their partner ecosystems this year.

Ultimately, developing a robust partner ecosystem strategy will be key to making sure that you don’t fall behind your competitors in the months and years to come.

2. The arrival of new partnership SaaS 

If you thought that partnership technology had already done most of its evolution when cookies and tracking links were invented, think again. The world of tech is fast-moving and it pays to be on the ball if you want to avoid falling behind your competitors.

In particular, a plethora of new SaaS designed to hone and streamline the relationship between partners has sprung up. While you could once have been forgiven for thinking the partnership industry was largely made up of partner brands with the odd affiliate network thrown in here and there, it now consists of a whole range of entities that are designed to support brands and their partners.

This can be easily seen by looking at Forrester’s Channel Software Tech Stack for 2021 (sadly, no Channel Software Tech Stack has yet been released for 2022). The list includes 183 companies, up from 159 in 2020. But most striking of all is where that increase has taken place.

Between 2020 and 2021, the ‘ecosystem management’ section saw an addition of 18 new companies (including Breezy!) – a 50% increase, accounting for nearly a third of the overall Channel Software Tech Stack Growth. The companies listed in this section also collectively nearly doubled their revenue during this time. Considering the category ‘ecosystem management’ didn’t even exist before 2020, this is certainly a fast-growing part of the industry that’s worth keeping an eye on in the near future!

3. Micro-influencers take the spotlight

Influencer marketing must be one of the oldest forms of partner marketing still going – we’re no history buffs, but if we’d been around in Bridgerton times, we can definitely imagine switching seamstresses because we saw the Queen’s favourite debutante there (or something like that!).

However, influencer marketing has absolutely thrived since the dawn of social media. Influencer Orchestration Network recently revealed that a whopping 49% of consumers depend on influencer recommendations, with 40% having purchased a product after seeing it on Twitter, YouTube or Instagram. Perhaps it’s no wonder then that a whopping 75% of marketers now use influencers as a marketing tool (according to Chief Marketer).

Far from being restricted to traditional bloggers and comparison sites, partner marketing has found a thriving hub in social media. And of course, there are new social media platforms emerging all the time.

Having said that, the rapid rise of influencer marketing has led to a bit of an oversaturation of content, making it harder for influencers (and therefore the brands they work with) to cut through the noise to reach consumers. That’s why we’re seeing 2022 as the year of the micro-influencer. These individuals with smaller, hyper-targeted audiences and niches will be better placed to connect authentically with their followers, driving consistent results for their partner brands.

4. A move away from coupon and cashback sites

Traditionally, affiliate marketing has been dominated by coupon and cashback sites (and many affiliate networks still are!). This meant that well-meaning affiliates would all-too-often promote a brand’s products, only to lose out on the commission they deserved when a coupon or cashback site pipped them to the post using suspect methods to claim the ‘last click.’ 

To put it simply, a consumer might see an affiliate’s promotion, head to the brand’s website, decide to purchase the item and then search online for a discount code. They’d then come across a coupon site which would encourage them to click to get a discount and voila! The last click would be awarded to the coupon site (whether or not they actually gave the consumer a valid discount code).

However, attribution models have since become a lot fairer. Rather than giving the whole commission to the affiliate who wins the last click as brands so often used to do, more complex attribution models have become commonplace – such as linear attribution (where every affiliate involved in a conversion gets rewarded equally); time decay (where every affiliate involved gets rewarded but those involved towards the end of the customer’s journey get a higher percentage); and u-shaped (where every affiliate gets rewarded but those that achieve the first and last clicks get the highest percentage). These fairer attribution models mean affiliates who put in hard work creating quality content are more likely to get rewarded justly for their efforts. 

At the same time, Google has contributed to a move towards higher-quality, long-form content, by placing websites that offer users the most valuable content at the top of the SERPs (search engine results pages). This means that affiliates are now being incentivised to put user experience first, and those who create well-researched, authentic, authoritative content are likely to be well rewarded for their efforts.

5. Partner marketing is recognised as its own channel

In 2019, reports from Wolfgang Digital and Forrester revealed that partnerships actually exceed paid search as a growth channel. While the average business generates 18% of its revenue from paid search, high-maturity partnership programs generate 28%.

In the early days, businesses often lumped partnerships together with other marketing activities, to be looked after by a wider marketing or growth team. However, with so many activities and responsibilities to juggle, partnerships would often become an afterthought.

Now the power of partner marketing is becoming clearer, partnerships are becoming more central to business strategies. This year, 82% of B2B business leaders will be adding to their roster of partners, while 70% will be boosting their channel program budgets (according to Demand Gen’s Partner Marketing Benchmark Survey).

Accordingly, as time goes on, more and more brands are hiring partnership managers or growing a partnerships team, to really allow them to make partnerships a priority. It feels like brands have recognised the importance of having a head of paid search for a while now, so it’s about time that partnerships started garnering the same level of attention and focus in-house! 

6. Brands focus on reputation

As our understanding of partner marketing has matured and evolved, so have brands’ partnership strategies. The focus is no longer on simply using partnerships to boost sales and increase revenue. Instead, brands are thinking outside of the box and using partner marketing to help them improve their top-of-funnel metrics or reach longer-term goals – like boosting brand awareness and improving brand reputation.

Brand reputation is a particularly big focus right now, as Accenture has shown that more than half of customers in the UK – and 75% of Gen Z – want companies to take a stand on issues they’re passionate about. Not only that but six in ten consumers under the age of 30 consider a brand’s ethical values carefully before buying its products. And, according to Cone Communications, 64% of millennials would refuse a job from an employer without a strong CSR policy.

With that in mind, brands are relying on impactful charity partnerships to shape how they’re perceived by the public – moving away from simply presenting a yearly cheque to a charity of their choice, and getting more creative. For instance, one recent charity partnership example saw Brewdog printing dog adoption ads on Punk IPA beer cans, in partnership with dog adoption charities Dogs on the Streets and All Dogs Matter. While the partnership was a great way to raise awareness of homeless dogs and help them find forever homes, it was also a fantastic chance for Brewdog to shout about its ethics!

And it’s not just partnerships with charities that fit the bill. There’s been a rise in brands using other partnership types to draw attention to their ethics too – like when Ben + Jerry's Canada teamed up with online writing platform Wattpad on a 'pen your pride' campaign. Writers were encouraged to post stories on the Wattpad platform about moments where they felt proud to be a member of the LGBTQ+ community, boosting the perception of Ben + Jerry’s and their involvement with the LGBTQ+ community by 142.8%.

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As you can probably tell, the world has changed a lot since partner marketing first began. And partner marketing has changed with it!

In fact, the partnership industry evolution is still ongoing, as new technologies, trends and schools of thought are coming to fruition all the time. With that in mind, it’s important to develop a robust partner marketing strategy, so you don’t get left behind. Enter Breezy!

Our unique partner intelligence and discovery platform will help you level up your partnership game now and long into the future. Just book a no-obligation demo to see what it’s all about (you’ll even get some free leads out of it!).