Partnership Marketing

How to Reduce Marketing Costs With Partnership Marketing

Boost your business with partnership marketing – a tool to enhance brand awareness and reduce costs, that combined can contribute 20%+ to your revenue.

In the fiercely competitive e-commerce arena, businesses battle against rising advertising costs and fleeting customer attention. Caught in a relentless wave of Meta Ads that are decreasing in effectiveness, many find themselves searching for new solutions.

Cue partnership marketing - your lifeboat in this digital sea storm.

This isn't just another marketing buzzword. It's a fresh approach that focuses on shared growth, strengthening brand narratives, and multiplied outcomes - all while keeping costs in check. 

Don't take our word for it. Consider these benefits of partnership marketing: 

  1. Financial efficiency: Stretch your marketing dollar further when you share a common goal with another brand.
  2. Heightened ROI: Turn a business partnership into shared success.
  3. Pinpoint targeting: Reach your ideal audience more effectively by bundling with complementary products.
  4. Brand credibility: Build faster trust via established partnerships with influencers and others.
  5. Risk diversification: Simple – don’t put all your marketing eggs in one basket.
  6. Creative campaigns: Stand out with unique Collabs!

Ready to Collab? Read on for best practices and get ready to revamp your marketing strategy!

What is partnership marketing?

Partnership marketing is a mutually beneficial strategic collaboration between two or more parties to reach specific goals. That could be winning new customers, reaching a new target audience, brand awareness growth in a particular demographic, cutting marketing costs, and more.

Digital advertising declines have made collaborative marketing an increasingly necessary avenue of business growth.

Several studies show the right partner brands can transform a business's revenues:

  • 54% of companies gain more than 20% of their revenue through partnership marketing alone.
  • 68% of consumers say they can make buying decisions before speaking to sales reps after seeing co-marketed campaigns.

Conceptually, partner marketing is simple. But the biggest challenge is facilitating the partnership (aka finding potential partners). Many solopreneurs and small businesses need help with understanding what characteristics to look for in a partnership marketing partner, and how to get started with the process.

The good news? Subkit makes it easy to find and connect with potential partners

Why established digital marketing channels are hurting businesses

If you're interested in partnership marketing, understanding the challenges affecting digital ads is a good starting point.

Paying for ads on Facebook, Google, and TikTok gets more expensive each year, yet returns have not kept up the pace. Some small businesses are lucky to break even after spending all their marketing budget on ads. Others burn through their marketing budget with minimal or even zero results to show for it.

That puts tremendous stress on business leaders, not to mention the small businesses and individuals who are still coming out of difficult times due to the economic downturn caused by the pandemic.

Reports show that ad prices across advertising and social media platforms have increased year-over-year (YoY):

  • Meta’s Facebook cost per thousand impressions (CPM) is up 61% YoY, reaching an average of US $17.60.
  • CPM for TikTok increased by 185% YoY, reaching an average of US $9.40.
  • Google’s programmatic display ads CPMs increased by 75% YoY. Its cost-per-click (CPC) for search ads is also up by 14% YoY.
  • Amazon’s CPC for sponsored product offerings grew by 14% YoY.

These dramatic price increases are eating away at marketing budgets. Yet, many continue to spend marketing dollars on digital advertising even with reduced ROI. Why?

They don’t have an alternative in place that they trust. 

Brands in that boat are not having a good time.

But you don't have to be.

Instead, you can use partnership marketing to decrease costs while increasing ROI. But before we get to that, you might be wondering, what’s causing the sharp rise in the cost of digital advertising?

The iOS 14.5 update discourages potential customers from allowing tracking

Apple’s iOS 14.5 released a controversial feature called App Tracking Transparency, which is increasing marketing costs for businesses that rely on advertising.

The feature requires applications to ask users for permission to track activities across apps and websites. It also allows users to change their preferences anytime or prevent apps from asking for permission entirely in the settings.

But the App Tracking Transparency feature isn’t a big deal because it drastically changed how iOS handles user tracking. iOS has always allowed users to opt out of Identifier for Advertisers or IDFA-based tracking.

The problem for big tech, developers, and advertisers now is most users choose to keep services from tracking their usage activities. The update puts the choice front and center, making it impossible for users to miss.

So, brands like Meta's Facebook have become less accurate in showing targeted ads, forcing small businesses that use digital advertising to spend more to reach the same customers. Companies are also unable to make certain data-driven decisions about advertising.

Phasing out third-party cookies further increases customer acquisition costs

Consumers generally don't want companies to track their activities because of trust issues, specifically keeping data private and secure. These concerns led to the launch of various privacy-centric solutions, such as the Brave web browser and DuckDuckGo (a search engine).

They don’t track users using third-party cookies (and the Brave browser blocks other tracking technologies by default).

These products continue to attract consumers concerned about their privacy as big tech loses market share little by little.

One revealing survey found that 70% of consumers do not agree with tracking for marketing purposes.


The same study found that 44% of consumers use ad blockers.


In addition, 75% of consumers prefer companies ask for their consent regarding tracking, and 84% say they understand how cookies work.

Further, privacy regulations like the GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) compound the problem. They make it even more risky and costly for companies to collect and or use personal data.

In response to all the above, Apple, Google, and Mozilla are removing browser support for third-party cookies — joining the smaller tech brands that do not track users.

In particular, Firefox has already rolled out default Total Cookie Protection and Safari blocks third-party cookies by default. Google plans to start phasing out third-party cookies in the second half of 2024, which isn’t much time.

This makes it even harder for advertisers to track users, serve targeted ads, and make data-driven decisions. As a result, digital advertising will become even less effective than it is now over time, and customer acquisition costs will increase further.

How to reduce marketing costs with partnership marketing

So, how do you reduce marketing costs with partnership marketing?

The answer lies in the benefits of collaboration.

If you're struggling with digital advertising, it's a good time to try partnership marketing for better results. It can become the most powerful tool for your business, and there are many benefits of partnership marketing to consider.

When two or more small businesses work together, they combine some of their resources to reach business goals. That could be funding marketing campaigns to grow their customer base or sharing team members to achieve a creative objective.

In some cases, one company provides financial support while the other brings something else to the table. But no matter the arrangement, the main benefit for businesses is reduced marketing costs.

Some examples of great partnerships that can reduce costs and amplify marketing efforts include the following.

  • A business coach and YouTuber work together to create bundled subscription offerings.
  • A local hairdresser and nail salon partner to create bundled product offers that allow people to enjoy both services easily.
  • An educator joins forces with a publisher to sell online courses and share the revenue.
  • A coffee shop and book store partner up to offer monthly subscription services that deliver coffee and a certain number of book rentals.
  • Two technology companies collaborate to design and build a new product, sharing the marketing cost.

Many that adopt a collaborative marketing strategy notice the benefits right away:

Affordable audience reach

Reaching the target audience becomes cheaper and easier when you partner with another business. For example, two companies can collaborate on external blog posts or publications to boost revenues, cutting their typical costs.

Also, often the right partners already have an engaged following or a curated audience. That means no need to build an audience from scratch using digital advertising or other methods that require a higher investment.

You can access new customers or segments within the current target audience more easily. This increased visibility can increase lead generation and conversion rates.

Higher conversion rates

People who discover products through partnership marketing channels are more likely to convert. The audience is often highly relevant, provided you choose the right partner – so you can tap into much stronger buyer intent by presenting your offers at the right time.

For instance, many airlines ask consumers if they want to buy travel insurance or rent a car when booking. This approach increases the likelihood that a customer would sign up for those complimentary products.

More value in a cost-effective way

In most cases, all parties involved in a partnership marketing agreement add value to their existing audience. This is because they typically offer solutions that complement each other's products.

Access to a bigger marketing team

Depending on the kind of partnership, you may gain access to more resources, including a bigger marketing team. This can be great for creative pursuits. For example, two companies can create an eBook to help promote brand awareness – one company may work on writing and content, while the other contributes design resources to the project.

With the right partners, a small business can rival the strategic marketing campaigns of global brands.‍ It’s like instantly adding more highly skilled team members to your business.

A cost-effective way to build brand trust

You can piggyback on the built trust of your partner thanks to the “Halo Effect.” This refers to the tendency for positive impressions of something in one area to influence people’s opinions or feelings in other areas positively (or negatively).

For example, an educator who partners with a YouTuber that has an excellent reputation will likely be perceived by the target audience as possessing the same qualities.‍

More efficient product distribution

Even the greatest product will fail if you can't get it in front of customers. Partnership marketing ensures you're getting your solution in front of the right audience efficiently. For example, listing your product or service on a partner’s website can increase distribution. ‍

Cut through the noise

Consumers are shown tons of advertising on almost every major platform they visit, so many ignore ads. Some even install ad blockers, as noted earlier, to do away with ads altogether.

But people don't generally ignore partnership marketing because the information or offer comes from a source they trust and engage with regularly. That means your product can cut through the noise and efficiently reach the consumers most likely to buy from you.

More brand awareness

Your brand may become more known within the target market since you’ll gain access to the other business’s audience. Plus, you'll reach relevant people with high intent who can benefit from your products or services.

Decreased risks

When collaborating with successful businesses, you reduce your marketing risk. It's practically a guarantee that you'll reach the right audience.

How much marketing budget should go into partnership marketing?

Careful planning and allocating the right amount of your marketing budget is essential. Small businesses should avoid digital marketing ads and focus their budget on advertising through business partnerships and other effective strategies.

If you can’t avoid digital ads entirely, you should still reserve some of your marketing budget for partnership marketing. Generally, that should be 10% or more of the marketing budget.

But keep in mind that the kind of partnership marketing opportunities you pursue will influence spending. Collaborating with another small business may require a smaller investment than working with an affiliate marketing network.

Getting the most from your partnership marketing dollars

One thing that should be top-of-mind is maximizing the benefits you receive from partnership marketing. In fact, having that mental focus is a way of reducing marketing costs through partnership marketing. You don't have to over invest when the value you get from each partnership is excellent.

Here are some things that can maximize your marketing efforts:

Offer competitive commissions

If applicable, ensure the commissions you pay to affiliates or for every new customer are fair. It should satisfy the receiving partner and motivate them to help you grow your customer base. But it shouldn't be so much that it leaves you open to losing money in the transaction.

Small businesses that use affiliate marketing pay 10% and up in commissions for each sale typically. Your industry and other conditions will impact affiliate rewards.

Regularly optimize campaigns

Partner marketing campaigns aren't a one-time setup. Evaluating and optimizing your campaigns regularly will put your business in a better place. Consider conducting quarterly audits and making tweaks where necessary.

Monitor conversion rates

The obvious reason to track conversion rates is that they affect your bottom line. But there's another reason: a low conversion rate may indicate poor targeting or traffic quality.

If that’s the case, it’s important to re-assess your partnership marketing strategy.

In contrast, a very high conversion rate is good, except in some circumstances. For example, partner fraud could lead to unnaturally high conversion rates.

Use data to make decisions

Every decision should be data-informed, from finding the right partner to partner marketing strategy tweaks to forecasting.

For example, it’s useful to look at data when your marketing efforts are helping increase the customer base in the short term, or you have too much customer churn. Relying on data can help you pinpoint the cause of churn and mitigate the problem. 

Another example is using data to spot fraudulent numbers. For instance, some YouTubers buy subscribers to make their channels appear more influential. In such cases, ensure all the numbers make sense. Ask questions like, does the amount of engagement on this channel fit the number of subscribers?

Data is essential in partner marketing.

Invest in a long-term partner relationship

Aim to build long-lasting partner relationships, especially with top performers. This is key to a successful partner marketing program, and the process starts when you find your ideal partner.

Partnership marketing is a powerful tool for business growth

It's unlikely marketing costs will come down anytime soon, so the best thing small business can do is to form strategic partnerships for growth.

The key to a successful business partner marketing campaign: both companies must benefit from the partnership.

Combined marketing efforts can amount to meaningful brand awareness, lead generation, and sales at a much lower customer acquisition cost.

Whatever your ideal outcome, when you do it right, partnership marketing reduces marketing expenses dramatically while increasing your growth rate exponentially. Your best chance for success is to form partnerships with brands in adjacent industries, with brands and influencers already engaging with your next ideal customer, and you'll be seeing results before you know it.

And don't worry – starting with Collab Marketing is much easier than you may think. You can find plenty of potential Collab partners by using Subkit!

With Subkit, small businesses, and solopreneurs earn together through Collab Marketing or turn their expertise into recurring, predictable revenue. Start your partnership marketing journey today!

Request your Invite to Subkit.

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