It is is often said that a person can be judged by the company they keep, and this is equally applicable to brands.
This is one reason why American Airlines has chosen to create long-term relationships with five promotional partners: Bose, Morgan Stanley, cahoot, Sony Pictures Releasing (formerly Columbia TriStar) and MasterCard (Marketing, 19 January). Each brand was selected on the basis that the demographic of its target market complements the image of the airline, which has been having casual flings with various promotional partners, but is now seeking more meaningful liaisons.
The link-up with studio Sony Pictures Releasing enables more detailed brand support for American. The airline supports selected films with free flight offers and makes its choices with care. Last year, in a promotion preceding the current contract, American tied up with Spider-Man 2. 'It was perfect for us,' says European sales promotion manager Chris Taylor.
'Spider-Man is a long-running and popular US character, which reflects what American Airlines is about.'
Joint promotions have a long history in the UK, which is regarded as one of the most advanced markets in this area. The proliferation of promotions, however, has led to a degree of apathy among consumers, who are increasingly passing up the chance to redeem coupons or send away for free gifts.
Camilla Mair, managing director of Mediator, one of a small number of agencies that have sprung up to match-make long-term relationships between brands, says average coupon redemption rates have fallen from 0.4% to 0.04% over the past two years. As a result, marketers are seeking ways to bring more resonance to their strategies.
Increasingly, this means striking more lasting brand partnerships, which can yield more than a one-off promotion. 'It is far easier to plan our promotional calendar with partners we know,' says Taylor. 'If both sides are in it for the long term, we can be much more flexible with each other, and do so much more than if it were a simple transactional deal.'
There is a cost to this higher level of tie-up. It takes careful management to make sure brands hook up with an appropriate third party, and that both feel they are benefiting equally.
Mediator and Touchdown, the affinity marketing agency that arranged American Airlines' deals, have software that matches client brands to those with customers that share their demographic and attitudinal profile. This helps bring some quantification to the process.
However, many marketers rely on gut instinct to select partners. One marketing chief of a major brand admitted that his technique for selecting brand partnerships was to 'go with the ones I like the sound of'.
'Many times clients tell us they would like to work with a certain company,' says Mair. 'But when we run the brand through the database, there is often a much better fit with an unexpected potential partner.'
Once a deal is struck, it is essential to maintain transparency and equal benefits between partners, says Touchdown managing director Gavan Stewart.
'If one side seems to be getting more from the partnership, the whole thing will implode,' he says.
Brands do not always have to offer reciprocal deals to the other's customers, however. While American Airlines offers flights to partner brands' customers, the carrier benefits only from additional opportunities to promote itself to a wider audience.
Honesty is key. 'It would be easy for American to offer off-peak seats that otherwise would be empty,' says Stewart. 'But it has committed to offering something of value so there are peak-time flights and upgrades available.'
The practical benefits offered by a partnership can sometimes outweigh the fact that the two brands' images are not entirely complementary. Mobile phone operator 3 tapped into its parent company's network at its launch in March 2003, setting up concessions in 60 Superdrug stores (both companies are owned by Hutchison Whampoa).
'I am not going to say our brand values are aligned,' says a spokesman for 3. 'But the Superdrug deal gave us a great way of getting prime high-street presence within a respected retailer.' He believes Superdrug benefited too, with 3 enhancing stores by luring extra traffic from its high-spending customers.
Marketers seeking to improve promotions or gain a higher profile are not the only ones looking more closely at which brands to get into bed with. Over the past couple of years, marketers working for high-profile or fashionable brands have been inundated with approaches from suitors.
American Express' UK marketing department generally receives one approach a day from potential pro-motional partners lured by its high-spending cardholders. A spokesman adds that as most people have a good appreciation of the upscale nature of the American Express brand, it tends to attract companies similar in profile. 'The brand fit is very important to us,' he adds. 'We wouldn't partner with anyone that didn't match us.'
DATA FILE - BRAND ALLIANCE CATEGORIES
- American Airlines offered two-for-one flight deals to those watching Sony Pictures Releasing film Big Fish at Odeon cinemas.
- Choice Hotels offered Littlewoods mail-order customers the chance to book hotel rooms at £19.99 a night.
- Starbucks sells copies of The Times.
- Mobile phone brand 3 set up concessions in Superdrug stores.
- Apple has worked with car marques including Nissan, BMW and Volvo to put an iPod dock in some US models.
- BT and Yahoo! came together to create a broadband service.
Vertical market alliances
- Hotpoint and Ariel back each other's home-laundry brands.
- Small Luxury Hotels of the World and Hertz offer discounts to one another's customers.